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What is a DSP?

The goal of this blog is to help the “new to ad tech” person/publisher/marketer get a simple understanding of how supply and demand is bought and sold. For all you industry vets out there, this will be a review! Don’t worry, we’re happy to have a more in-depth conversation as well!

Before the widespread acceptance of the internet, print, TV and even web ads were bought and sold offline. The process was conducted entirely by humans, with buyer and seller representatives negotiating the prices for various ad spaces.

Today, online ad spaces are bought and sold through an automatic, digital process- making digital media buying faster and more transparent than ever before. Real-time bidding makes it possible for the entire negotiation and buying process to happen in a fraction of a second! Think about this, as you visit and click through various websites, there are multiple transactions to render the right ad from the right advertiser in the amount of time it takes to load the page.

For an advertiser to succeed in the digital marketplace, they must understand what demand side platforms (DSPs) are and how they work.

How it Works

DSPs are web based technologies that connect ad buyers (agencies or brands) to ad suppliers (publishers of sites or apps). With an infinite marketplace of apps and websites, -DSPs allow brands to filter through the clutter to find the right type of publisher for their campaign and provide transparency into the costs associated with them. DSPs permit buyers to scan thousands of site and app properties and only buy the ad placements that align with their campaign goals. Most of this is done through algorithms and through a series of real-time call and responses. No human interaction is needed between the buyer and the seller as billions of these transactions occur at a given point of time across a wide array of publisher networks (SSPs) and buyer networks (DSPs)

In a nutshell, DSPs are the technology advertisers and media buyers use to bid on and buy ads in real time.

The Benefits

DSPs make the digital ad buying process more efficient and cost-effective. By removing individual representatives and negotiators (the middle man) from the media buying equation, advertisers are able to make the most of their marketing budgets and directly interact with the ad inventory they’re bidding on. Allowing the market to act freely and dictate prices allows for broader competition and ensures no single group can monopolize the media buying market, guaranteeing a financial benefit for all buyers and sellers.

DSPs also make it possible for advertisers to serve their ads to a targeted audience segment. By using data, advertisers are able to target specific users based on their location, previous browsing behavior and a range of other factors. Most of current marketing theories revolve around serving advertisements to the individuals most aligned with your brand, and DSPs make this easy to do.

DSPs and the introduction of programmatic ad buying have revolutionized the way companies and brands advertise today.

To learn about the role of publishers and their Supply Side Platforms in the digital media buying process, click here.