A demand-side platform (DSP) can do wonders for your business. The efficiency and accuracy that big data and analytics have brought to our daily lives are now rapidly changing the landscape of media-buying. Digital advertisements were bought and sold in the past manually by real people, such as publishers and ad buyers. However, the problem with this method of purchasing digital ads was that it was unreliable and expensive. Besides, in many cases, advertisers could not buy sufficient ad inventories for their specific ad campaigns.

However, thanks mainly to big data; today, the main object of demand is the target audience rather than the advertising space itself. As a result, those advertisers that have access to demand-side platforms get access to tools that make this data work.

What is a Demand Side Platform (DSP)?

A demand side platform (DSP) is a tool used for buying media across multiple publishers as well as data exchanges. Hence, a DSP enables a company to place bids for ad impressions easily. A DSP also allows organizations to acquire, combine, ingest, and leverage both first-and third-party data sources. First-and third data sources help determine the value of each ad impression.

Many digital advertising buyers use demand-side platforms to manage programmatic ad buying across various ad exchanges. These include agencies, advertisers, and ad networks. Consequently, demand-side platforms are the flip side of supply-side platforms.

A demand-side platform uses algorithms for grouping the rates of different networks together on one platform. Therefore, it is the control center, which allows you to purchase media that is mainly sold programmatically (which is a bulk of digital advertising nowadays).

These programmatic platforms allow for the convenient management of advertising across several real-time bidding networks on the market. This functionality differentiates demand-side platforms from other competing platforms such as Google Ads. Consequently, DSPs allow for programmatic advertising together with supply-side platforms.

DSPs are different as they incorporate several of the facets and features that were previously provided by many advertising networks, including:

  • Vertical as well as lateral targeting
  • Wide and flexible access to inventory
  • Real-time bid on ads

Demand-side platforms were developed to help brands better participate in different media auctions on digital exchanges.

The great thing is that with exchanges, publishers can easily sell each media impression directly to advertisers. They don’t have to rely on an advertising network or a direct sales team.

How Does A Demand Side Platform (DSP) Work?

A demand-side platform connects to various ad inventory supply sources. A supply-side platform or SSP is where many publishers make their supplies available. Demand-side platforms and supply-side platforms allow advertisers to purchase ad inventory placements across several publisher’s sites easily. They can also purchase from mobile applications based on impressions. Hence, demand-side platforms (DSPs) are independent of individual networks.

So, when you manage adverts through Google Display Network manager, you are purchasing impressions on Google publishers only. Similarly, if you are using the Facebook Ads Manager for buying ads, you are purchasing impressions on Facebook alone. However, demand-side platforms are unique as they are independent of these networks.

Demand-side platforms are third-party software that enables you to buy, analyze, and manage ads across multiple networks from a single platform.

As DSPs automate the ad-purchasing process, they lower the need for lengthy back-and-forth negotiations between sellers and media buyers. Therefore, this saves time for both parties. Here are some of the new platforms that you can buy into with a DSP:

  • Direct publishers (both web and in-app)
  • CTV/ OTT
  • Facebook
  • LinkedIn
  • Instagram
  • Google keyword search

Certainly, with the help of these new generation demand-side platforms (DSPs), media buyers can breathe a sigh of relief. Furthermore, they can easily run end-to-end advertising campaigns from the top to the bottom of the sales funnel, which is great. Also, it is worth noting that this includes targeting audiences from various phases. Therefore, this includes the awareness, interest, and consideration phases to the conversion phase of the sales funnel.

Basis of Targeting

The demand-side platform analyzes each inventory and then determines whether it’s valuable for the advertiser. Furthermore, it determines whether it fits the needs, requirements as well as targeting settings. If the inventory is valuable for the advertiser, the demand-side platform automatically computes the maximum cost of that inventory, then sends a bid response back to the relevant exchange.

Hence, keep in mind that the price of a specific bid is based on an advertiser’s pre-determined budgeting data and other user information, like

  • Demographics
  • Location
  • Browsing behavior

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

In the programmatic advertising picture, a demand-side platform gives advertisers all the pertinent information that they need to purchase advertising from a publisher. Note that they do not own or buy media directly from publishers. Rather, they communicate with an effective supply-side platform via an ad exchange. Therefore, demand-side platforms can target on several ways, such as:

    Hey you've made it this far... Seems like you're enjoying the content. Let us help you achieve your goals.

    • according to the time zone, geolocation, county, and city
    • based on the specific context (targeting particular URLs based on the topics of the page)
    • according to the marital status, gender,  income, and level of education
    • based on the browsing behavior
    • according to the language
    • according to the device (such as mobile, desktop, and  tablet)

    Demand Side Platform- Pricing

    DSPs often charge a fixed percentage of margin in addition to the media cost. As a result, it gives advertisers more transparency in terms of pricing. On the other hand, with a majority of networks, margins aren’t transparent, which is a serious drawback. With DSPs, many publishers list their inventory transparently on exchanges. As a result, advertisers know more about what they are buying.

    Final Thoughts

    DSPs are helping usher in a new age of considerable cost-saving for advertisers. They have heightened speed and convenience for advertisers and publishers and revenue optimization for publishers.

    For many businesses, demand-side platforms will make the most sense, because they offer amazing efficiency with a broad reach of prospects across several ad exchanges, including more premium inventory. Real-time bidding helps eliminate the need for cost negotiators on the side of advertisers and human salespeople on the publisher’s end.

    So, this benefits both parties as they can reach their goals in an elegant and streamlined way.