What is a Demand-Side Platform (DSP)?

The demand-side platform is a big player in the programmatic advertising (or programmatic ad buying) system. It plays on the side of the advertiser, while the supply-side platform plays on the side of the publisher.
In case you have missed our previous article about what programmatic advertising itself is, it means buying ad space using artificial intelligence technologies while minimizing human participation.

DSP is an automated ad buying program. It is a technological system for organizing an auction for advertisers. Almost without human intervention, DSP performs trading with SSPs, platforms for RTB bidding on the websites’ side. With the help of demand-side platform software, advertisers are able to manage several ad networks and ad exchanges at once, making the whole ad buying process much more effective. DSP exchanges ad prices and other data with SSP in the interests of the advertiser in the RTB digital ecosystem.
The DSP itself, as a rule, does not have an interface for buying and managing ads. Such interfaces are available for products-add-ons over DSP-retargeting systems, Trading Desk, etc.

How the DSP works

The main goal of the Demand-side platform is to buy impressions of the audience that best meets the advertiser's requests. And, of course, to buy them at the most favourable price: as cheaply as possible. In fact, the DSP allows advertisers to buy an audience that fits the most, not any specific ad space to place their ads.

How does it work exactly? When the user clicks on the link, the SSP (publishers’ supply-side platform) system starts trading on the DSP platform. Then DSP has to very fast automatically gather and combine the following parameters: data based on the SSP, information about the offer provided at the advertiser's website, and purchased information from DMP (Data Management Platforms — a provider of user profiles and management systems). After that DSP forms bids and conducts an RTB auction among a number of advertisers with similar requests.

Different campaigns may require different DSPs: for full-fledged advertising activities, it is necessary to exchange data with several platforms, plus interact with other RTB system operators. For this purpose, a DSP manager (Trading Desk) is used, which centralizes work with several DSPs and manages data through its own or third-party DMP (Data Management Platform).

Through the Trading Desk, an advertiser and/or an advertising agency set the bid sizes, the required volume of impressions or clicks, collects audience data and uploads all this information to the DSP. The platform analyzes this information, compares it to information about the audience available at the auction and makes bids, trying to buy impressions at a price as low as possible, and select the audience in the most accurate way. The most important and impressive thing here is that all these events take a fraction of a second while the site page is loaded.

DSP features

Using DSP, advertisers manage requests for different ad formats placement and prices for displaying advertising messages to the target audience. As in contextual advertising, the system based on key performance indicators helps to optimize such indicators as eCPC (effective Cost per Click) and eCPA (effective Cost per Action).

Demand-side platform software today is unique in a way that it has absorbed the features of the advertising exchanges of the previous generation. Thus, it has brought a lot of new things to the advertising industry:

— Unprecedented speed of work — DSP allows agencies and advertisers to make transactions in real time mode;
— Wide audience targeting opportunities: direct (or vertical) targeting — by socio-demographic, geographical, temporal, behavioral characteristics, interests, etc. and lateral targeting, which identifies target groups for a specific task with dynamically changing criteria during an advertising campaign;
— Formation of detailed reports for each impression, reflecting all the websites involved and the results of their work;
— Real Time statistics: the campaign progress report is reflected with a delay of only a few seconds, which allows you to quickly reduce the cost of inefficient traffic sources. For comparison: the delay of the report in Google AdWords can be more than 18 hours;
— Interaction with dozens of SSPs that put up for sale advertising inventory of networks and independent platforms, which means unprecedented media coverage;
— The ability to optimize the DSP budget, automatically as well. This is especially interesting in the case of buying up "residual traffic", when the advertiser receives a penny of traffic, and the site — at least some sales.

All these features are collected in a single system, which gives advertisers a unique opportunity to fully control the course of an advertising campaign and maximize its impact on the audience.

Pros of using a DSP

  • 1. The RTB universe is now yours. DSP and SSP platforms help to participate in real-time data exchange. Constantly receiving fresh information, your advertising messages are likely to find their audience.
  • 2. A well-thought-out investment. Most DSP platforms work on the terms of a fixed monthly payment. DSPs also have a built-in function for selecting the optimal place to display your ads. So your advertising costs will not be in vain.
  • 3. Targeting at a new level. As soon as you buy your advertising space, the DSP selects the most productive ways of displaying. You can also use the platform for retargeting to a specific user, since the consumer's behavior in the network is often chaotic, and attention is dispersed.
  • 4. A lot of useful tools. Creative content tools will help you change the ad settings for the site configuration so that it is displayed correctly. Dayparting is a function that you can use to select the exact time and period for displaying your ads. Frequency capping helps you determine how many times your message will be shown to the same person. There are many more.
  • 5. Analyze 24/7. After the successful launch of an advertising campaign, do not rush to relax. Constant monitoring and analysis of any changes in the reaction to your advertising will make it possible to react and make changes in time. The DSP gives you complete freedom of action in this area.

You must have one question at this point: where does Galaksion stand in this long DSP-SSP-RTB-Ad exchange chain? Happy to remind all our partners here that we have our own Supply-Side Platform (not to be confused with the Self-Service Platform) that works via OpenRTB protocol. In case you or your advertising team are looking for a reliable RTB-traffic source and have all the necessary DSP equipment, we are always open for cooperation!