Demand Side Platforms (DSPs) are software platforms for automated buying of ad inventories across various Ad Exchanges using RTB and Programmatic Direct methods. DSPs are the advertiser interface of programmatic buying which has driven big improvements in performance and automation of display advertising. In US, two thirds of all digital display advertising in 2016 is expected to be done via programmatic advertising.
As can be seen from the below overview of the programmatic buying eco system, the DSP’s customers are media buyers thus it said to be on the buy side. DSPs do not have any inventory of their own. They are expected to help advertisers buy the best performing inventory available on Ad Exchanges.
The DSPs that deliver superior ROI leverage sophisticated techniques such as artificial intelligence and big data. Some of the DSPs active in India include DoubleClick, Rocket Fuel, AppNexus , MediaMath, Turn, The Trade Desk.
Using Demand Side Platforms
The following video shows a simplified overview of how DSP based programmatic advertising fits into an advertiser’s marketing plan –
The DSP only controls which impression to bid on and how much to bid on it. The best performing DSPs do a better job of both these than competition. When sending out requests for bids to the DSPs (step #3 above), the Ad Exchanges send a lot of information about the impression i.e. ad location, size, page URL/category, user demographic/behavioural information etc. All this information, along with any other proprietary data sources that a DSP has, gives an opportunity to it to select and value ad impressions in a manner that drives performance for the advertisers.