Demand side platforms, or DSPs, are an important part of programmatic advertising. This technology allows advertisers and agencies to buy ads across multiple ad exchanges in multiple sources through one interface. However, each DSP has its own strengths, inventory sources, and characteristics. How do you know which DSP is right for your campaign?
But to truly understand which DSP is best for you, we first need to take a step back and understand the programmatic advertising landscape. So we’ll start with the basics.
Table of Contents:
What is a DSP
Benefits of using a DSP
List of DSPs we use
Which DSP is right for your campaign
DSP vs Trading Desk
What is a DSP?
Demand-side platforms, or DSPs, are platforms that are used by marketers and agencies to buy display, mobile, video, audio, and search ads. (Marketers and agencies are generally on the “demand side” of the industry – as they have the demand to buy advertising, whereas publishers are on the “sell side” – because they are selling the ad space.)
While this process of buying ads was historically done by humans involving insertion orders, DSPs automate the process of negotiating ad rates and submitting IOs. The marketer buys impressions across a range of publisher sites, rather than going directly to one publisher to make a direct buy, allowing the marketer to target their advertising to an audience based on a variety of behavioral, demographic, or geographic criteria.
Programmatic is a term that can apply to many industries outside of just advertising. “Programmatic” refers to technology-enabled workflow automation, and in advertising refers to two computers talking to each other to execute campaign operations. Rather than needing multiple people to carry out these functions, technology does the hard part. Programmatic advertising delivers benefits such as:
Increased reach: Using online data, you can define your target audience easily and reach the websites your audience visits.
Variety of channels: Programmatic advertising allows for multi-channel marketing that helps you reach your audience in multiple formats.
Efficient advertising: Thanks to automated advertising, you can save time and effort on buying and displaying ads.
What Is Real-Time Bidding (RTB)?
You can’t talk about programmatic advertising without someone mentioning RTB, but these terms are not interchangeable. Real-time bidding (RTB) is a technology mechanism for automatically bidding, buying and selling display impressions via an auction format. It is inherently programmatic and uses algorithmic or artificial intelligence (AI) technology to make informed media buys to serve a specific ad to a particular in nanoseconds.
RTB is the bidder technology on the other end of ad exchanges, recognizing every single impression opportunity that comes through and analyzing that opportunity for that marketer.
This technology asks questions like: Is this the right audience? Is this the right context where I’ll find the audience? Is it the right time of day to engage the audience? Are these consumers likely to purchase or move towards that performance goal that I’m optimizing against? That’s RTB. That’s that real-time bidding.
Real-time bidding is not just, “Hey, this is what I’m willing to pay for a specific placement.” And you can go in and say, “I’m going to pay up to 50 cents per click” or “I’m going to pay up to five dollars per conversion.” RTB analyzes multiple data to evaluate and value a placement, and to understand what the likelihood of conversion is.
RTB is efficient and cost effective, because not only can you target the right audiences now, you can pay what that audience is worth in that moment.
The converse of RTB would be making a publisher-direct buy. When you go direct, you’re probably paying a flat CPM. But when you are dynamically bidding in that individual opportunity instance, you’re allowing yourself to only pay what it’s worth to you. And that’s how you can back out and see these conversion goals and performance goals that move the needle and grow revenue for your company.
Benefits of Using a DSP
The advantages of using a DSP in your advertising strategy include:
Real-time bidding across ad exchanges: Sophisticated RTB technology will adjust to current data to expand your reach to more internet users. A DSP’s RTB process happens in multiple ad exchanges, enabling you to maximize your potential impressions. These exchanges manage ads across platforms and devices to help you advertise to potential customers who use different apps and devices. DSPs also monitor the available space offered from supply-side platforms (SSPs) in real time to identify ideal ad opportunities as they appear.
Easier cost control: DSPs provide cost optimization by empowering you to define your costs and get the most impressions out of your investment. You can specify a budget for your DSP to reap the benefits of automated bidding while controlling costs. Depending on the platform, you might pay a set monthly rate or specify the amount you want to spend on bidding. Since DSPs bid for ad space based on its relevancy to your audience, they will also help you get the best return on investment possible.
Transparent data:In advertising, knowledge is power. DSPs provide transparent data and metrics on ad performance so you can understand your campaign’s performance and adjust your strategy as needed. You’ll get an in-depth look at key performance indicators like click-through rate, page view lift, and website traffic. When you manage your DSPs through a trading desk like tdX, you’ll also get guidance on using those statistics to create a smart campaign strategy.
Powerful features: DSPs offer many value-added features such as day parting, creative content management, and frequency capping. Day parting defines the time of day that your ads will run, such as in situations when you need people to see your ad when your business is open. Creative content management offers a central system where you can manage your ads’ designs. With frequency capping, you can limit the number of times that someone will see your ad to avoid overexposure.
Advanced targeting: Thanks to advanced targeting features, you can focus on quality over quantity. Advanced DSP targeting can narrow down your audience by location, context, and behavior. DSPs can also retarget your audience as you adjust your campaign approach.
To help you on your quest, we have identified six key areas to focus on when choosing the right DSP for your campaigns.
Contrary to popular belief, not all DSPs have access to the same inventory. Some platforms focus on desktop, whereas others are more focused on mobile. In addition to the channel focus, each DSP has a unique global footprint, which will affect overall inventory as well.
To make sure the DSP is right for your campaign’s goals, request a list of countries and the available inventory in each to find out what the coverage is for the areas your campaigns will be targeting.
As your campaign’s size and scale grows, it becomes more important for the DSP to have the capacity and scale to support those requirements. One of the key indicators of capacity is queries per second, or QPS. If your campaigns are larger, you may also want to find out how their QPS compares to the competition. As an example, Forrester’s DSP evaluation criteria previously required vendors to support at least 1 million QPS.
Beyond the available inventory of a particular DSP, you also need to understand the technology it is relying on. The first question is whether their technology is built in-house, or if it is white-labeled from another platform. Believe it or not, there are quite a few companies who claim to be DSPs, and are actually just white-labeling someone else’s.
In addition to the question of proprietary or white-labeled technology, other technological factors to consider include capacity and scale, technical caliber, and the availability of an API. Asking how many developers the company employs is a quick way to learn more about the company’s commitment to actually building technology. And if you’re still suspicious, you can verify this number by researching the company on LinkedIn.
3. Media Buying Methods
The availability of different media buying methods and creative support is another category of consideration, and refers to the options available for procuring inventory. Can inventory be purchased in a real-time fashion (via RTB)? What about guaranteed direct deals that allow advertisers to reserve inventory in advance (i.e., futures-based buying)? Or are the buys blind, as is common among ad networks?
What formats of creative does the DSP support beyond standard static banners? You may also be looking to include formats like rich media ad units, video, native, and audio, or example.
Video support is in high demand and growing quickly, but video ad serving has unique technical requirements, especially on mobile.
Some DSPs also offer creative design services, to help building ads and/or landing pages. If that is something you are looking for, make sure to ask and see what their creative offerings are.
5. Targeting Options
How sophisticated are the targeting options, and do they match your particular goals? Can you target specific websites or mobile apps? Can you target by specific first- or third-party audiences?
Language? Location? OS? Device type? The list of targeting options can vary greatly, so make sure it works for you.
6. Reporting & Analytics
What reporting options are available? Can you access reports in real-time? Are you looking for a specific report to receive every so often? Make sure you understand what reports are available to you out of the box vs what will require custom dev work from the DSP (at an additional price).
Fortunately for our clients, AUDIENCEX offers unified reporting and analytics, including a customized dashboard. This gives visibility into the performance of each campaign, regardless of how many DSPs, platforms, or channels you are using.
What Is a Trading Desk?
The idea of a trading desk is somewhat elusive. Some people think of it as the technology that drives real-time bidding (RTB) technology or media buying, while other people think of it as the managed service layer above that.
While there are various definitions, Forrester Research describes an agency trading desk as: “A centralized, service-based organization that serves as a managed service layer, typically on top of a licensed demand-side platform (DSP) and other audience buying technologies; manages programmatic, bid-based media and audience buying. Works as an agency’s internal “center of excellence,” supporting agency teams wishing to tap into this new buying model on behalf of agency clients.”
This media and audience buying generally encompasses many the different channels – including things like display, audio, video, TV, native – in which you’re going to serve programmatic ads. While a DSP is a platform, a trading desk includes a team of people offering a managed service. It’s not just about the tech.
DSP vs Trading Desk
Navigating your way through the DSP landscape can be daunting. How do you know which one is right for your campaign? Unfortunately, there isn’t a simple answer to this question.
Each DSP has different strengths and weaknesses. And when a trader is optimizing a campaign on an individual platform, they need to understand the strengths and weaknesses of that specific platform, and how to optimize campaigns within it.
At the same time, many DSPs have large minimums that almost immediately disqualify many brands without $100K to spend every month.
Trading Desks on the other hand, work with and offer access to multiple DSPs, so you can get the best of each, without the monthly minimums. And you also get access to managed services, including campaign optimization, to drive performance.
As a marketer, you may not have the time or expertise to go through 200 different evaluation criteria to understand if a certain tactic in a specific DSP will actually move the needle for you. If you’re working with a trading desk, however, you tell your account manager the campaign goal, and they will work with the available technology to help you realize that goal.
We are focused on sharing this enterprise-level technology to brands and agencies of any size, because we believe that everyone should be able to take advantage of these capabilities. It shouldn’t be that only the Fortune 500 companies of the world get to utilize technology that helps growth revenue.
What Is an SSP?
Just as DSPs automate the media buying side of the equation for marketers, Supply-Side Platforms (SSPs) are used to automate the other side for publishers. An SSP is basically the publisher equivalent of a DSP for marketers.
Every single publisher on the web has ad inventory they need to sell. You might have a direct sales team that sells a portion of that directly, but generally, if you’re The New York Times, you have billions of impressions that need to be filled every month. You don’t have a sales team that can sell at all.
It’s not necessarily efficient to hire a huge sales team and pay that overhead when you can just give that inventory to an exchange, where it will be bought and purchased in real-time, much like stocks in the stock market. This is when a publisher gets involved in an SSP to automate the sale of their inventory.
What Is an Ad Network?
Ad networks were one of the first pieces of AdTech that appeared in the ‘90s when digital advertising first appeared. The concept is pretty simple: an ad network is a platform that served as a broker between publishers who had advertising inventory to sell and advertisers who wanted to buy advertising inventory online. Ad networks filled a gap in the world or programmatic, by aggregating a fair amount of inventory across multiple sites, and giving access to that inventory to marketers who otherwise wouldn’t have a place to buy it.
Because each platform has its own unique strengths, we present 24+ industry-leading DSPs, search and social platforms in one place, without limitations. This means increased reach and seamless access to premium inventory, without the huge monthly minimums that come with working with these DSPs directly. Curious which platform is best for your campaign?Connect with us to find out.
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