A demand-side platform (DSP) is a system that allows buyers of digital advertising to manage multiple ad exchange and data exchange accounts through one interface. Real-time bidding for displaying online ads takes place within the ad exchanges, and by utilizing a DSP, marketers can manage their bids for the banners and the pricing for the data that they are layering on to target their audiences. Much like Paid Search, using DSPs allows users to optimize based on set Key Performance Indicators such as effective Cost per Click (eCPC), and effective Cost per Action (eCPA).
DSPs are unique because they incorporate many of the facets previously offered by advertising networks, such as wide access to inventory and vertical and lateral targeting, with the ability to serve ads, real-time bid on ads, track the ads, and optimize. This is all kept within one interface which creates a unique opportunity for advertisers to truly control and maximize the impact of their ads. The sophistication of the level of detail that can be tracked by DSPs is increasing, including frequency information, multiple forms of rich media ads, and some video metrics. Many third parties are integrating with DSPs to provide better tracking.
First and foremost, data is driving this new trend toward buying platforms.
Data - with technology's help - is bringing insight into media buying such that buyers can understand the value of impressions before they ever consummate a buy which in turn eliminates waste. Eventually, as real-time bidding takes hold, advertisers will be able to:
- Buy per impression
- Target using key advertiser data points
- Map to ROI goals
- And all in real-time eliminating waste as never before
Efficiency in the digital marketplace only gets better from here - assuming that the heavy hand of regulation does not drop down too forcefully from above.
Extent of Reach
Reach is one of the major differentiators of DSPs. When you are dealing with audience targeting (retargeting) or contextual targeting, reach (or the number of sites and impressions available) is crucial to achieving scale.
The reach of the RTB ecosystem is unparalleled in the history of online display advertising. DSPs centralize access to inventory from well over a dozen supply-side platforms (SSPs), enabling access to a pool of over 15 billion impressions per day and rising. With the relatively recent addition of the Facebook Exchange (FBX), there is no question that DSPs have the upper hand in terms of reach. This means that with the right targeting data, you can basically find your audience anywhere on the web (whether or desktops, tablets, or mobile devices) and show them your ads.