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.
Power your entire partner payouts operations
How a Demand Side Platform (DSP) Uses Algorithms
“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.”
Examples of DSPs: Popular Demand Side Platforms in 2024
Four examples of popular demand side platforms (DSPs) include:
- Amazon DSP
- DoubleClick Bid Manager (Google)
- The Trade Desk
- 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.
- 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
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
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.
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.
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)?
Supply side platforms (SSPs), also known as sell side platforms, are also connected to digital ad exchanges. But they have a “mirror image” relationship to DSPs, so to speak. SSPs allow publishers (websites, blog owners, and other digital entities with ad space to sell) to procure the highest possible rates in the quickest possible way for their inventory of advertising space.
Publishers leverage SSPs for many of the exact same reasons that advertisers use DSPs, but from the opposite vantage point. They’re looking to get the maximum amount of revenue for their ads in an automated fashion. And in just the same way DSPs and ad exchanges help advertisers reach their goals, they’re the perfect tool for publishers as well. Here’s why.
Ad exchanges and SSPs have become known among digital publishing sites as yield optimization platforms. This is because they’re uniquely suited to help publishers maximize their revenue through real-time bidding or automatic digital auctions in which the highest-bidding advertiser is awarded the impression. The SSP is programmed to accept the highest possible bid on behalf of the publisher, with zero reliance on human negotiation (not to mention bypassing the issues of salespeople…errors, negotiation time, and of course their price markups).
SSPs also allow publishers more control over their inventory of impression space. Publishers can connect their SSP to multiple ad exchanges, which gives them access to more potential buyers (advertisers) than ever before. This allows them more freedom to strategize. They can establish “price floors”, or minimum prices for which they’ll sell their inventory. They can also choose to target specific types of advertisers and not others, depending on the type of website or blog they run. This is hugely important from a strategic vantage point because certain ad categories will reliably bring in more revenue than others, based on what’s being advertised and to whom.
What’s the difference between demand side platforms vs. traditional ad networks?
Three main distinctions between traditional ad networks and DSPs are (1) human vs. automation, (2) their pricing model and (3) offering features like automated ad campaign tracking. Whereas ad networks operating with human employees usually mark up the prices of their services, DSPs either charge a flat fee for carrying out a digital transaction or take a percentage of the ad spend. DSPs also receive some hidden fees, according to AdExchanger.
As the concept has progressed, many DSPs have also opted to specialize, catering specifically to video or mobile ads, for instance.
A “human touch” will always be necessary for creating and carrying out a successful ad campaign. Human creativity and strategies still count, and DSPs and ad exchanges don’t replace those vital elements of campaign-building. But in terms of reducing manual waste in the process of buying impressions from publishers, they’re second to none. They also give advertisers the convenience of managing and tracking a campaign with a conveniently centralized tool, as opposed to interfacing with numerous companies and individuals.
Besides using a demand side platform and traditional ad networks, your company can use affiliate marketing management programs. Affiliate marketing selects affiliates and makes commission payments to affiliates and influencers to attract new customers. Specialized affiliate software will track affiliate marketing actiivities and provide metrics.
Many advertisers also claim that choosing a successful ad placement is a totally objective and data-driven matter. And it’s simply a statement of fact that automated tools like DSPs are better equipped than humans for processing large amounts of data and rendering objective decisions from them.
Who uses demand side platforms?
Advertising buyers, including companies or their marketing agencies, use demand side platforms (DSPs). They are seeking real-time programmatic automation for buying and managing online and mobile advertising or digital out-of-home (DOOH) display advertising from several integrated seller ad exchanges accessible through a single DSP.
When should I use a demand side platform?
You should use a demand side platform when your business or media buying agency wants to automate buying different types of digital ads from several ad seller platforms that are available through real-time bidding on one unified software platform.
What types of targeting can I do with programmatic marketing on a demand side platform?
Programmatic advertising targeting through a DSP goes beyond demographics which include gender, age, and household income. According to Adelphic, the Viant DSP provider, “programmatic ad targeting includes:
- Audience targeting
- Contextual targeting
- Behavioral targeting
- Cross-device targeting”
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.