What Is a Demand-Side Platform & What Role Does It Play in Programmatic?
First Published: 05
If you have investigated programmatic advertising, you’ve likely seen the phrase Demand Side Platform (DSP) floating around, but what does it mean? We break down the basics of demand-side platforms and explain their role in programmatic advertising.
What Is a Demand Side Platform?
A demand-side platform (DSP) is a programmatic advertising platform used by advertisers and digital media buying agencies. This platform offers a range of opportunities, allowing advertisers and agencies to streamline ad auctions and bid on a wide variety of digital ad inventory, including but not limited to display, video, mobile, search, native and social across a wide range of reputable publishers.
An essential feature of demand-side platforms is the ability to reach select audience segments based on DSP targeting capabilities. This feature is achievable across many publisher sites at mass with speed and efficiency.
What Are the Advantages of Using a DSP?
1. Streamlined, Real-time Bidding (RTB)
Real-time bidding (RTB) automates and streamlines the negotiation process for sellers and buyers of media. Through RTB, the process of evaluating ad impressions offered and bidding on impressions (considering value, target, and budget) takes place in about 100 milliseconds (a 10th of a second), all while the user loads the page. To put that into perspective, that’s 200 milliseconds faster than the blink of an eye.
2. Improved User Targeting
A demand-side platform captures user behaviour data to improve targeting, optimise ad rotation, and enable audience remarketing capabilities. This targeting functionality means advertisers can reach their target audience across any digital inventory they visit, wherever they are consuming their online activities.
3. Inventory Reach and Selection
Through DSPs, advertisers gain access to a diverse and global ad inventory; they can reach a broad range of publishers from a single platform. The range of characteristics within this ad inventory also enables brands to choose where they want their ads displayed. This feature is especially vital for brands focussed on brand safety, prioritising placement of ads across reputable environments.
4. Reporting, Analytics, and Optimisation
The ability to view ad campaign performance in a single platform is another feature appreciated about DSPs. Agencies and advertisers can leverage the information visible here to finetune campaigns, increase relevancy, and offer greater value to their target audiences. In addition, key metrics from DSPs reporting sources can be pulled into reporting tools, like Data Studio Reports, to help provide clear overviews of digital media performance across all channels to support strategic digital planning.
How Does a Demand Side Platform Work in Programmatic Advertising?
DSPs allow advertisers to swap out manual ad buying, replacing it with efficient, automated bidding in real-time via a platform with RTB capabilities. Below is a summary of this process:
Advertisers first choose their target audience and upload the ads they’d like published.
Publishers make ad inventories available on the DSP (via ad exchanges and supply-side platforms).
The DSP receives the ad impression from these ad exchanges and SSPs and sets pricing for buying the impression.
Advertisers then place bids in real-time, competing for the ad impression buy.
Once the impression is won, the publishing website displays the ad.
This process is started and completed incredibly fast, in the milliseconds when a viewer first enters the publisher’s site.
Maximising Conversion with a Data Management Program
What Is a DMP?
As a unified and centralised technology, demand management platforms (DMPs) collect, sort, and activate large data sets from diverse locations.
The increased prioritisation of audience analysis and targeting across multiple platforms, media channels, and devices gave rise to DMP usage within media and advertising for both sell- and buy-side.
Collection, unification, organisation, activation, and analytics are the five pillars of data management programs. All DMPs should be able to unify first-, second-, and third-party data within their one platform.
When data has been collected and organised within a DMP, companies can leverage this information in various ways to inform their business decisions. For example, through audience profile reporting, audiences created within the DMP can be defined and examined; companies can gain a complete 360 view of an audience through these analytics reports. The valuable information gained through these reports can help businesses contextualise the who, what, where, why, and how of their customer segments or target audiences.
How are DMPs Used?
Data management systems are used for various reasons, from data collection and audience building to audience insights, profiling, and more.
Data Collection: Through first-party data, you can better understand who your ideal customer may be. This first-party data can be gathered from any source and aggregated into transparent, easy-to-understand data.
Audience Building: Aggregated data in your DMP can also be combined with second and third-party data to build target audiences.
Audience Profiling and Insights: Audience profile reports available through DMP can offer marketers and publishers insights into their audiences’ patterns, trends, and intent online. Through this, companies can understand the composition of their audience at a deeper level. They can then use audience insights and profiling to personalise messaging and content to align with their audience and increase overall conversions.
DMPs and Programmatic Advertising
In programmatic advertising, your DSP works with a Data Management Program (DMP) to determine the best match for your ad based on more detailed and specific audience information. You can maximise conversions by targeting people based on their demographics, interests, location history, recent online activity, and many other valuable details relating to their online behaviour.
As a programmatic agency in NZ, we know how effective demand-side platform and data management platform collaboration can be. Using DSPs and DMPs collaboratively in programmatic advertising allows your brand to expand its reach to a larger, more relevant audience. Their remarkable targeting capabilities make purchasing valuable, high-quality audience data possible. These targeting capabilities help to drive traffic and conversion to a relevant audience interested in your ads.
If you want to learn more about DSPs and grow your brand and business with programmatic advertising, get in touch with the team at This Side Up today!
About the author
Pure SEO is a Google Premier Partner, which means it's in the 3% top performing agencies in New Zealand.