101 Guide To What Is a Demand Side Platform
Ahead of all other media channels, programmatic advertising is growing the fastest. But does this help your business? You’ll want to know what is a demand side platform or DSP.
One of the most common forms of programmatic marketing is the demand side platform (DSP). DSPs automate digital media buying (and more).
Your marketing strategy has to include DSPs to compete with the rest fo the digital world. Read on to learn why you need this tool in your arsenal.
What Is a Demand Side Platform?
A demand side platform automates digital media buying. A DSP functions as an online buying platform for digital ad inventory for a variety of ad exchanges.
Advertisers and agencies can use DSPs for real-time bidding (RTB), which is another automated process for purchasing digital ad inventory. These ad exchanges between RTB and DSP (i.e., the bidding and purchasing) help determine the price.
Parts of a DSP
Before automated processes like this, media purchasers for ad agencies bought from humans. The process was time-consuming, suffered from human error, and was complex. Fortunately, there are several components to DSPs which have updated the entire process.
A bidder uses RTB to place bids on ads and other media your company may want. The bidder removes the delay in determining what is or is not an appropriate amount for ads in the inventory.
Often, there are multiple bidders functioning at once to reduce inactivity. Bidders also predict prices of ad inventory based on previous data on related site traffic and click-through rates.
Bankers, also known as cashiers, are a budget managing tool. Some DSPs have add-ons that allow bankers to manage multiple budgets in a campaign. Bankers primarily ensure that bids on ads do not pass the budget established for the campaign.
An ad server is another crucial part of DSPs for managing campaigns. It can be owned or rented.
Ad servers store your purchased ads and display them for end-users. They also determine the best value per impression for cost-effective, optimized campaigns.
A campaign tracker assesses performance from impressions, spends, and clicks. It then records and transmits this information for reporting.
User Data and Interface Databases
User data stored with this part of a demand service platform records interests, buying habits, clicked ads, and viewing habits. The reporting database is the back-end information a DSP uses to purchase ad inventory.
The front-end of a DSP is its interface, generated with user data from the reporting database. The interface is what end-users see. Interface databases are helpful for retargeting campaigns.
Proper integration works with both SSPs and ad exchanges to capitalize on the benefits of DSPs. It brings together research, setup, development, and implementation. Integration ends when a created product (e.g., purchased ads) are tested.
Types of Platforms
Two things determine the types of platforms needed for your demand service platform. The type of data you need, either first-party or third-party, impact platform type. Additionally, the number of ad exchanges for DSP connection affect the type of platform needed.
A self-serve demand service platform allows for creating, managing, and optimizing ad campaigns. Advertisers do not have to use external support. First-party data and fewer ad exchanges are ideal for self-serve DSPs.
All responsibility for self-serving DSPs relies on the advertisers who use it. Full control is optimal for ad campaigns. Using this type of platform requires an advertiser with a moderate amount of expertise.
If you want flexibility, full-service DSPs are not ideal. If you do need third-party data and have higher numbers of ad exchanges on your demand service platform, you need full-service.
You will have to pay more for full-service DSPs. The higher price brings in an account manager and sales representative. Bigger companies have more room for specialized roles and have the budgets to afford them.
DSPs vs. Ad Networks
How can you be sure when to use DSPs or when to use ad networks? They both offer the same end result but operate very differently.
A demand side platform comes with the full range of features listed above, some of which are accompanied by further add-ons. The singular interface of DSPs allows for the optimal use of multiple features (purchase management, optimization, and analysis) in one place. DSPs can also directly connect with their audience with its targeting features.
Ad networks offer a limited set of features through multiple interfaces. These features target audiences and purchasing more ad inventory. Their targeting abilities are more rigid, with limited audience divisions. Ad networks only recently began to support RTB auctions, too.
Benefits of DSPs
When considering a demand side platform for programmatic online marketing techniques, you need to know its benefits. If you want to optimize your ad campaign, consider the following features, and how they will impact your current strategies.
A demand service platform is one of the best ways to build a target audience. There are several methods of online targeting available. These include:
- Geotargeting: Location-based targeting of your audience
- Demographic: Audience data including age, gender, education, occupation, income, etc.
- Behavioral: Interest and behavior-based data, such as site or purchase history
- Contextual: Ad placement related to site or app content, URL, or site category
- Device: Personalized based on preferred devices or operating systems
- Retargeting: Related to behavior targeting aimed at return visitors for contextual ads
With so many ways to build a target audience, it is vital you also have ad variability. The best demand service platform uses omnichannel targeting to ensure any ad campaigns are diverse and impactful.
Real-time information on campaign performance is crucial. You need the most recent stats on-hand for accurate optics. Different DSPs have different data delays.
If your ads are run on multiple channels, you still receive data from each source. The data from your demand service platform should be visually represented. This representation makes it easier to interpret data.
Your data will also be broken into sections, such as:
- Website traffic
- Engagement rates
- Clickthrough rates
- Cost per click
- And more
Sectioning data, especially from different sources, make observing outliers and poorly performing factors easier. It also means corrective measures for your online marketing techniques can be implemented more quickly.
Quick corrections from real-time optics allow for optimized goals in ad campaigns. The single interface feature of a demand service platform provides for seamless reporting and analytics.
Additionally, inventory management is easier than ever with a DSP. It offers a repository of banners, allows you to target the best and worst-performing ad providers.
Optimized ad campaigns have a broader reach and seamless integration. Global ad exchanges are more common on DSPs, which may expand your ads’ reach.
With optimized online marketing techniques, it easier to use multi-tactic approaches. Targeting can become more advanced, further-reaching a target audience while saving costs.
Dayparting runs ad campaigns on a schedule to increase real-time optics. Frequency capping prevents ad fatigue, putting a cap on ads used in a campaign. Brand safety and protection protect ads from landing on blacklist websites which might otherwise hurt your campaign.
One of the benefits of DSPs is the flexibility of budget shifting. Your ad campaign can have a daily budget or lifetime budget. Campaign pacing determines the budget, not just the cost of ads purchased.
RTB protects you from overpaying for any inventory on ad campaigns. You also receive cheaper inventory focused on your campaign. Targeted choice reduces cost, too, because it prevents having to shop around for the best price or fit.
When to Use DSPs
Now that you know the benefits of DSPs and their parts, you need to know when to use DSPs. Programmatic online marketing techniques are attractive for several reasons.
Unlimited access to global traffic, audience targeting, media sales transparency, and cost-efficiency are large incentives. What helps determine when to purchase a demand service platform?
When you need a cost-effective, flexible budget for your ad campaigns, it is time to consider purchasing a DSP. When you want more choice, whether you work with first-party data or third-party data, targeted choices save on cost.
If you have any in-house marketing gurus, it is important to use their skills. Most users of a demand service platform require some sort of training, but moderately skilled advertisers easily can adapt to using DSPs and reduce reliance on ad networks. You should see an increase in RTB as well.
Ease of Use
A demand service platform will increase the overall ease of use for your advertisers. You will not rely on external parties as much and you will save on the overall cost. Furthermore, the interface of most DSPs makes it easier to train novice advertisers.
When to Not Use DSPs
Even with all of the benefits of DSPs, there are drawbacks to implementing a demand service platform too late. Learn what negatively impacts your ad campaign if you use a DSP at the wrong time.
Most immediately, you will experience an uptick in cost and a downturn in profit. Budgets for acquiring ad inventory through DSPs can be very costly at the start.
Initial investments in this form of programmatic advertising can cost several thousand dollars. Even though the cost decreases over time, many businesses may not have the budget for a steep initial investment.
When you have a high amount of user traffic, you have a large number of ads. DSPs convert these interactions for you, meaning you do lose data on purchase impact.
If your business relies on these conversions, you will have to consider cookie bombing your users. Cookies reduce the impact of DSPs, increasing your likelihood of site conversion rates.
Many a user of a demand service platform has trust issues. Novice advertisers will find site traffic faked through cheap marketing tactics, such as ad spoofs, bot farms, injectors, and more. More experienced advertisers know how to select types of platforms that use tried and true techniques.
Advertisers may end up with a surplus of ad inventory. Choosing the wrong DSP may result in ads you can not use in campaigns.
Even with all of the improved targeting of DSPs, if advertisers do not know their users, the benefits of DSPs are lost. Most sites are ignorant of their traffic, so even the most advanced targeting techniques become a useless investment.
Selecting a Demand Service Platform
Your demand service platform should offer access to multiple behavioral databases. These databases should provide you with the best targeting information for the most accurate results. Your online targeting should include access to geolocation, customer purchase habits, IP targeting, specific keywords, customer preferences, and more.
When selecting a marketing agency to provide you with a DSP, you should only pay for the results you get. You deserve a cost-efficient measure that engages your audience. A lower cost per click pricing is one way to get the best prices with a wide array of media outlets.
You also deserve results of your cost-effective investment in a marketing agency’s services, like Media Shark. These results should be exactly what you need with custom data points, including ads, devices, audiences, placements, and more.
Who to Consider for Your DSP Needs
Now that you are ready to update your online marketing techniques, consider a free strategy session with Media Shark. We will get you more insight into future programmatic campaigns with our customized reporting features.
We offer cost efficiency, video and audio advertising, higher engagement, and conversions, the best in online targeting. Contact us today for more information. Or, check out our blog for more helpful marketing tips.