In our previous post, we mapped out for you what the digital advertising ecosystem looks like, and showed you just how complex it is. However, it is worth taking a moment to explain exactly what a Demand-side Platform and a Supply-side Platform are.  

 

What is a Demand-Side Platform?

In simple terms, a DSP is a technology platform that enables advertisers to evaluate and bid for online media using the vendor-neutral RTB ecosystem.

 

Traditionally, digital ads were bought and sold by ad buyers, which was a costly and unreliable system. DSPs have helped to make the process cheaper and more efficient through automation i.e removing human interaction from the transaction part of the process. According to Jack Marshall, many advertisers would rather purchase ads using DSPs as it is a more cost efficient way to do so.

DSPs started out as a way to facilitate digital ad transactions, they now allow advertisers to buy, serve and track the success of their ads using only one tool. They also enable advertisers to optimise their campaigns more easily as a result. DSPs also have the upper hand in terms of reach as they centralise access to inventory from a multitude of supply-side platforms (SSPs), allowing them to reach more people - allowing advertisers to scale up their campaigns. DSPs also allow for more effective targeting, which can be done using demographic data (age, gender etc.), psychographic data (likes and interests) and behavioural data (e.g the car they drive, their bank or insurance provider).

When working with a DSP, you provide the advertisements, such as banner graphics, along with your desired target market or markets and your maximum budget. The platform then identifies advertising opportunities across multiple networks, finding the best prices for the most eyeballs in your target demographic, and purchases those advertising spaces on your behalf until your budget is exhausted.

 

And now for Supply-Side Platforms…

A supply-side platform (SSP) is a piece of software used by publishers to sell advertising in an automated way. A supply-side platform is essentially the publisher equivalent of a DSP.

While DSPs are used by advertisers on the buy-side to buy ad impressions from exchanges, as cheaply as possible, SSPs are used by publishers to maximise the prices of their impressions (an ad view.)  The publisher’s current problem is that programmatic buying is driving the value of their impressions down, this is where SSPs step in. SSPs allow publishers to connect to a huge range of potential buyers by connecting their inventory to multiple ad exchanges and DSPs, the idea being that publishers can maximise their inventory revenue. Publishers can also set price floors (the minimum price they want to be paid for an impression), and they can decide which advertisers can and cannot purchase inventory. In short, SSPs are giving publishers more control over their inventory.

 

To illustrate the relationship between the buy and sell side, we have created this diagram for you.

In an ideal world, a DSP or an SSP would be a neutral player. However, in reality, this may not be the case.  After all, while a DSP/SSP may be independent, it could also be just one subsidiary of a much bigger company. Many of the big players, like Google and Yahoo!, also operate their own DSPs. (Google has DoubleClick Bid Manager; Yahoo! has BrightRoll.) In 2011, Google acquired the SSP Admeld, merging this with its DoubleClick Ad Exchange. Even Facebook is getting in on the act, as it is right now preparing to launch its own DSP in 2016.

This is a manifestation of the wider trend towards the creation of “walled gardens”. According to James Hercher at the Adexchanger, “when ad tech companies achieve massive scale, they tend to batten down the hatches”. Having said that, there has been a rise in a number of companies which are determined to break down the barriers of these “walled gardens”.  

 

Xaxis considers itself an “agnostic alternative to Facebook and Atlas and Google and DoubleClick”, alleging that “the bundling that’s going on is anti-competitive”. Denmark-based Adform is also seeking to be a “media-agnostic, independent partner” that will enable publishers to hold their own against the walled garden platforms of big players like Facebook and Google.

 

Here at The Media Trader, we greatly value our independence, which we believe allows our clients to trust that we are fully committed to delivering value to them. At the same time, we also have strong working partnerships with key players throughout the digital advertising ecosystem, such as MediaMath, a leading DSP. This means that we thrive in the AdTech industry and are not rediscovering the wheel every time.

 

 

5 days to Web Summit! See you there!

 

 

 

 

 

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