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Demand Side Platform (DSP): Everything You Need to Know


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The world of digital advertising is constantly shifting to reflect new advances in adtech. Demand side platforms (DSPs) are quickly taking center stage in the realm of modern advertising. 

This guide explains demand side platforms and provides examples of top DSPs using adtech that your business should consider. 

What is a Demand Side Platform? 

A demand side platform is software used by advertisers and agencies to buy online ad space through a digital marketplace. Publishers list their available advertising slots on digital ad exchanges integrated into the demand side platform. DSPs enable programmatic advertising by letting advertisers automatically buy and manage ads across multiple real-time bidding networks or ad exchanges. 

DSPs in 2024 

Automated DSPs are widely used for global advertising, and their adoption is growing rapidly. 

“The global Demand Side Platform (DSP) System market size is projected to reach USD 38480 million by 2027, from USD 5558.1 million in 2020, at a CAGR of 31.3% during 2021-2027,” according to a survey report from GlobeNewswire / 360 Market Updates

As part of the current trend, demand side platforms must keep up to date to provide a safe platform with strong identity validation and fraud prevention and provide supply chain trust, according to DSP provider, MediaMath.

Benefits of Using a Demand Side Platform

Demand side platforms (buy side platforms) are powerful tools that let advertisers buy advertising from different integrated ad networks and supply side platforms, using automated transactions. DSPs help modern businesses streamline their online advertising efforts and workflows. 

Demand side platforms let your company automatically buy targeted ads from available ad inventory and eliminate many business pains associated with manual tasks. Your company can also achieve precision retargeting of ads through a DSP to reach desired customers in the target audience that may have previously indicated an interest in your ads. 

How Does a DSP Work? 

A DSP (demand side platform) lets advertisers or media buyers purchase and track ads using programmatic marketing through a real-time automated software interface. A demand side platform provides real-time media buying with automatic audience targeting capabilities and bidding with multiple available ad exchanges through the DSP. The demand side platform also offers data management platform functionality to track and manage advertising campaign performance. 

Advertisers buy these types of advertising through a demand side platform:

  • Online display advertising
  • Native ads
  • Video ads (including YouTube)
  • Audio ads 
  • Mobile in-app ads
  • Digital out-of-home (DOOH) ads (using computerized display screens)

DSPs sell ad impressions to advertisers on a wide variety of publisher sites. An impression is when a single browser on the web clicks on a single ad from one ad network (essentially, it’s one interested person pursuing one particular web ad). These impressions are then targeted to users on the basis of their location, their interests as determined by previous web searches, and other individualized criteria, to heighten the potential effectiveness of a given ad and secure more business from advertisers.

The impressions are made available to buyers through digital ad exchanges integrated into the unified advertising platform. DSPs automatically decide in a matter of milliseconds which ad impressions will be most effective for an advertiser to purchase. 

The ad purchase is then automatically executed by the DSP on behalf of the advertiser in a process known as real-time bidding (RTB), in which the impression is sold to the highest bidder on the exchange within milliseconds as the webpage hosting the impressions is loading. The winner’s ad will appear on the site once the page loads.

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How a Demand Side Platform (DSP) Uses Algorithms

According to a Quora post from Alexey Bilichenko, the CMO at Markpoint DSP, demand side platforms use algorithms in a variety of ways:

“A demand-side platform uses algorithms for grouping rates of different networks together on one platform allowing advertisers to purchase media sold programmatically and manage advertising across several real-time bidding networks on the market.

DSP analyzes each inventory and then determines if it’s valuable for the advertiser and fits their needs, requirements, and targeting settings. If the inventory fits, a DSP automatically computes the maximum cost of that inventory, then sends a bid response back to the relevant exchange.

Furthermore, thanks to the convenience of machine learning algorithms and various prediction mechanisms, it takes milliseconds to analyze ad impressions.

Apart from algorithms related to bidding and determining ad inventory, a DSP may have, for instance, built-in anti-fraud algorithms, aimed to identify and filter out low quality and fraudulent traffic.”

Four examples of popular demand side platforms (DSPs) include:

  1. Amazon DSP 
  2. DoubleClick Bid Manager (Google)
  3. The Trade Desk
  4. MediaMath
  5. Amazon DSP

Amazon DSP is a demand-side platform for programmatically buying advertising with real-time bidding for placement on  Amazon and other advertising opportunities outside Amazon. Amazon DSP also provides ad performance measurement and metrics. 

  1. DoubleClick Bid Manager (Google)

Google acquired DoubleClick, which offers digital marketing and DSP software. DoubleClick Bid Manager is a demand side platform (DSP) within the set of DoubleClick software products integrated into the DoubleClick Digital Marketing (DDM) ad tech platform. 

DoubleClick Digital Marketing includes these products:

  • DoubleClick Digital Marketing Manager
  • DoubleClick Bid Manager
  • DoubleClick Search
  • DoubleClick Rich Media
  • DoubleClick Studio
  • Google Analytics
  1. The Trade Desk

The Trade Desk has a high net promoter score from customers using its demand side platform. The Trade Desk self-service DSP includes programmatic digital ad buying for these types of advertising:

  • Display ads
  • Native
  • Video
  • Audio
  • Social

These ad formats can be implemented on computers, mobile devices, and connected TVs. 

The Trade Desk offers an advertising campaign manager in its software platform.

  1. MediaMath

MediaMath is a pioneer in the demand side platform. It offers modern omnichannel DSP advertising software. MediaMath DSP functionality includes integration of IBM Watson Advertising Weather Targeting, which uses machine learning. MediaMath partners with HUMAN to identify and prevent fraud in its DSP, ensuring brand safety. 

Besides its self-service DSP, MediaMath also offers Professional Services, including programmatic advertising consulting, customization including advanced analytics and reports, and campaign management consultation at an additional cost. 

FAQs 

Is Facebook a demand side platform?

Yes, Facebook Ads Manager is a demand side platform for buying targeted ads only for programmatic advertising on Facebook, Instagram, Messenger, or Audience Network. It also manages your ad campaigns. 

What’s the difference between supply side platforms (SSPs) vs. demand side platforms (DSPs)? 

What’s the difference between demand side platforms vs. traditional ad networks?

Who uses demand side platforms? 

When should I use a demand side platform? 

What types of targeting can I do with programmatic marketing on a demand side platform?

Importance of Demand Side Platforms

Using demand side platforms for buying digital advertising is a way that marketing organizations can use automation software to significantly increase efficiency and improve results. 

Advertisers will streamline workflows for buying advertising without using manual business processes. They gain access to more available ads targeted to their business through automated programmatic advertising. This higher advertising supply accessible through demand side platforms can increase their advertising ROI

DSPs (and SSPs) are ushering in a new era of cost-saving for advertisers, revenue optimization for publishers, and heightened speed and convenience for both. Real-time bidding on advertising inventory eliminates the need for human salespeople on the publisher end, and cost negotiators on the advertisers’ side. This allows both parties to reach their goals in an elegantly streamlined way.

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