Today’s evolving technology has drastically transformed the processes of ad buying and selling. These procedures did not used to be as easy as we know them now, and with this new advancement and powerful automation tool, demand-side platform (DSP), has revolutionized the online advertising landscape.
Top Demand Side Platforms
Marketers are able to invest their time and energy into more valuable areas of their businesses, and leave it up to DSPs and marketing automations to retrieve the best ad bids within 0.1 milliseconds.
In this guide we lay out the advantages of implementing DSP advertising and suggest the top demand-side platforms out there that will take your ad campaigns to the next level so that you can focus on your business’ big break.
What is a Demand-side Platform?
A demand-side platform (DSP) is a web server based software system that allows brands, agencies and app developers that buy advertising inventory from publishers to manage multiple ad exchange and data exchange accounts, all through a single unified interface.
Essentially, with a DSP advertising solution, advertisers can bid on ads (e.g. banners, video, native and other types of formats) and optimize ad performance based on effective key performance indicators (KPIs), such as effective Cost Per Clicks (eCPC) and effective Cost Per Miles (eCPM).
However, DSPs do not work completely on their own and the system that it operates in can be slightly more complicated, especially when you are fairly new to the game of programmatic advertising and marketing automation.
But we are here to make this way simpler for you.
In order to understand the inner workings of DSPs, their related components, SSPs and DMPs, and how they function collectively to create more efficient advertising processes, let’s first discuss what programmatic advertising is.
Programmatic advertising
Did you know, programmatic advertising is an epic business, with data predicting its spend to hit $48bn in 2018, and rising to $69bn by 2020?
So we know that this form of marketing is here to stay – for a long time.
Programmatic advertising describes the entire process of buying and selling of adverts, which, in today’s digital landscape, happens in the form of online advertising.
So instead of spending countless hours contacting several publishers offering to advertise, this marketing automation management tool allows advertisers to receive the best results through digitized audience targeting and real-time bidding.
In essence, through the concept of programmatic advertising, marketers are able to automate purchasing and efficient managing of their digital ad campaigns, which includes media buying, ad placements, performance tracking and campaign optimization.
Remember we mentioned SSPs and DMPs earlier in the guide? Well these components all belong to the programmatic advertising process.
Now you may think we are throwing all kinds of terminology at you at this point. So let’s dive straight into these definitions so you get a better picture of how they work together.
Top DSP Companies
Mobile DSPs
So what are mobile DSPs?
Well, this category of demand-side platforms is one you really want to know about, as mobile platforms are growing to be marketers’ go-to tool for generating top level ad campaigns.
Mobile DSPs are the next step in the evolution of advertising networks. They are designed to tackle many challenges of mobile advertising. These include precise targeting and the need to deliver a message that is relevant to users and does not ruin their experience of using a mobile app or visiting a website.
Recent advances in technology now enable mobile DSPs to track smartphone and tablet models, operating systems, screen size, location and more.
The past couple years have seen a huge shift towards mobile programmatic buying, as advertisers begin to reap the rewards of sophisticated targeting and measurement capabilities.
Video DSPs
Just when you didn’t think DSPs could get any more complex, there is video DSP.
For the last several years, video has been the fastest growing medium for advertising, with companies like Facebook, Google, Twitter, Snapchat, and TikTok leading the field.
This growth led to the development of multiple ad formats in order to meet requirements of both desktop and mobile platforms. For example, vertical video ads on Snapchat are radically different from pre-roll, mid-roll and post-roll video ads on Google’s YouTube.
How does DSP advertising work?
So how do demand-side platforms tie into the infrastructure of programmatic advertising and marketing automation?
And to make matters even more complex, how does DSP advertising work in conjunction with SSPs and DMPs?
Think of DSPs as a software, a system if you will, that buyers in the online advertising inventory realm can use to manage not one but multiple ad and data exchanges as well as their bids through one interface.
Everything from purchasing, analyzing to managing ads across many networks take place within DSPs.
So DSPs generally refer to the buying of ads, hence providing demand for advertising inventory.
Supply-side platform (SSP)
Supply-side platform (SSP) should then be the opposite of a DSP, right? Correct.
SSPs allow publishers to sell advertising in the form of automated marketing. While DSPs let marketers buy, SSPs therefore let publishers sell their ad inventory across ad exchanges.
Just as DSPs guarantee the best value and offer of ads to marketers, SSPs ensure the best possible offer to publishers, allowing them to maximize revenue.
So they are both part of the same ad marketplace, they just operate on opposite ends of the transaction.
The illustration of the overall system below should be more clear to you now:
Demand-side Platform as a part of online advertising system
What is a data management platform (DMP) then?
DSPs provide advertisers with essential information that informs which advertising is worth buying from publishers. In other words, they provide data that defines various audience segments and informs ultimate ad buying decisions.
So where do DSPs retrieve this data from? Yup, you guessed that right: from a data management platform (DMP).
DMPs are used to store and utilize crucial data more effectively, to ensure that advertisers include elements to their digital ad campaigns that are truly relevant to the consumer.
Marketers can store all of their carefully researched data in one platform – that is the DMP – to which they can always refer back to when running an ad campaign.
Real-time bidding
Let’s go back to the term ‘real-time bidding’ we threw at you earlier.
So you have now got the valuable data from your DMP and have decided on an ad to purchase. In this case, the SSP will communicate with the DSP the details of an impression. Based on the value of this impression, your DSP will likely set a higher bid for said impression.
Whether or not you win the bid you placed accordingly will depend on how valuable this impression is to other marketers and their DSP as well as their budget for their bid.
This bidding happens in real-time and is automated by the SSP, DSP and the ad exchange between advertisers and publishers.
In the process of real-time bidding, you specify your target audience for your ads and how much you are willing to pay. A so-called bidding war takes place between you and other fellow advertisers who are targeting the same audience.
As the page loads, the algorithm automatically examines browsing history, date and time, IP address, allowing it to display the most relevant ad. The DSP and SSP meet halfway, referring to data from the DMP, and the algorithm finds a match.
Whichever advertiser bids the highest for that particular ad and impression earns the ad placement.
The ad gets served and, if it’s your lucky day, you have your ad on a relevant blog site attracting the right consumer.
Source: Instapage
Why should I use DSP marketing?
The value of the best DSPs lies in its transparency. It is the platform’s capacity to empower advertisers to manage multiple ads, bid in real-time as well as efficiently track and optimize ad performance that makes it worth the investment.
Using a demand-side platform comes with many advantages: The automated platform allows marketers using a mobile DSP in particular, to buy mobile ad inventory through a single interface.
DSPs enable a quick and easy set up of ad campaigns and management, so you don’t have to waste countless of valuable hours on the slow process of manually contacting hundreds of publishers directly.
And it does not end just there.
Advertisers can see the market rate for every impression they buy, control the ad exchanges they want to buy and realistically decide how much they want to bid.
So not only do DSPs make campaign creation and management simpler, but they also make sure you get your money’s worth from your placement bid, securing a solid foundation for those conversions to skyrocket.
But let’s not get too ahead of ourselves just yet.
While we can list several advantages of using a DSP, we also don’t want to sound like a pro-DSP guide.
We promised a detailed guide so you can make an informed decision on how to choose the best DSP companies. And that is exactly what we will give you.
So before you go investing loads in a demand-side platform software, take a quick look at this pros & cons list to get an unbiased overview of the advertising tool:
Pros
Transparency
Most DSPs offer full transparency of what types of ad placements you are buying, tracking substandard offers and looking out for any fraud ads.
Time efficiency
If you commonly manage ad campaigns across more than one network, DSP dashboards ensure a great overview and easy management of everything, which can save a lot of valuable time.
Precise targeting
Thanks to DMPs, marketers are able to gather valuable user data. The more data, the more precise the targeting. And accurate targeting allows for more personalized ads and messages, resulting in higher conversions.
Best value
Not only do DSPs give you the best suitable ad placement, but they also allow you to buy impressions on platforms with quality audiences. With DSPs you don’t have to worry about wasting your money on empty traffic.
Performance tracking
You can analyze ad placements and their performance directly on the demand-side platform. This allows you to spot any errors immediately and fix it without wasting your budget.
Cons
Hidden costs
The process may be budget-friendly, but a lot of DSPs with various cost models can be rather pricey as a whole. Some may require monthly fees, or even include hidden costs, increasing your ad spend overall.
But we will expand on this, including the complexities of a DSP in the next part of the guide.
Ad fraud risks
When using such an automation marketing tool, there is always a risk in buying fraudulent impressions, and not all DSPs have sufficient ad fraud detection features in place.
So you want to be aware of any potential financial losses that may result from this.
How do I choose the best DSP companies?
We understand the struggle in deciding which DSP to go with.
In fact, the table below shows the level of confusion among advertisers when it comes to what DSP companies to choose to spend their advertising budget with:
Widespread confusion over platforms and their services
Source: AdvertisingPerceptions.com, Bidease
As you can see less than one of four advertisers knew exactly what a DSP was and, hence, had a more difficult time choosing the right platform to work with.
Now being more familiar with the programmatic advertising concept, where should you start in the selection process?
When choosing a DSP, here are some key questions to consider:
Once you have outlined your marketing objectives for your business, and how you want to achieve them with programmatic advertising, the questions above are a useful guideline to help navigate your selection process in recognizing and choosing the best DSP.
But let’s dissect the questions and elaborate on them a little more.
Inventory
The type of inventory the DSP offers can be a good indicator of whether or not the platform is suitable for your campaigns.
In general terms, you want to choose a DSP with an inventory that includes video, mobile, display and tablet placements. This means they offer a diverse ad creative, allowing you to reach a wider audience.
Reach
A DSP’s reach is as important as inventory quality. So make sure to look for a DSP provider that has connections with high quality exchanges as well as access to global traffic.
That’s why it can be also useful to ask about their traffic sources when choosing your DSP.
Efficiency
A DSP with efficient and flexible tools and technology is key to running successful ad campaigns.
You want a platform that is easy to navigate through, accurate with real-time reporting, simple to set up and manage your campaigns, and one that offers a variety of targeting options.
Another deciding factor is a DSP’s technology.
Is the DSP leveraging and continuously evolving its technology to improve targeting, bidding and overall functionality methods? The answer will give you a clear direction for your decision.
If its tools are complicated and more complex, going for that particular DSP may result in difficulties surrounding campaign setup and management, on which you really don’t want to waste your valuable time and resources.
Cost model
While every DSP will charge for its services, the costs will vary significantly.
For most DSPs, their fee is included within an advertiser’s CPM bid. However, some providers also slide a sneaky hidden fee into the CPM.
Many DSPs also request a monthly or annual spend, or even a commitment agreement. So while management and tech fees are standard across DSPs, you want to make sure you are aware of how much of your spend is going towards maintenance of the platform and ad exchange fees to avoid long-term overspend.
It is also important to know what a DSP’s minimum fee is to avoid any surprise expenses along the way when you do eventually partner with them.
Available data
You know how much value data can hold when running ad campaigns. The more relevant data you have access to, the better you can optimize real-time bidding campaigns, expanding reach for a wider audience that are most-likely to convert.
Analytics
Having access to accurate, real-time reports are integral features of a good DSP. Like we discussed earlier, you may require particular data and reporting to identify further enhancements according to your unique marketing goals.
Remember, customized report builders are not always included in standard DSPs. So make sure to choose a DSP provider with those capabilities that will allow room for accurate optimizations and guaranteed campaign success.
Support
Lastly, you should definitely look for a DSP that provides a great level of support, especially when you will be setting up your first ad campaigns. While your experienced team may be well equipped to work independently, technical assistance directly from the platforms is always helpful.
Find out whether your DSP has a limit to their support or if any costs are associated with their offer.
Choose the best of the best DSP providers
The bottom line to choosing the best demand-side platform for your unique marketing goals is to get full transparency into each DSP provider before partnering with them.
Understanding the ins and outs of how DSPs operate should avoid any disappointments and errors in the future that can hurt your campaigns long term.
To help you to make an informed decision of choosing the right DSP for desktop and mobile ad campaigns, we’ve put together a list of the top DSP companies and their key features.
Along with the guide, the list should hopefully assist you in your selection process to ace programmatic advertising with this revolutionary automated tool.
