Understand how DSPs streamline ad buying and optimize campaigns.
Perion Marketing
13th Nov 2024
A Demand-side platform (DSP) is a crucial component of the digital advertising ecosystem that automates the process of buying ad space across online platforms for advertisers. DSPs allow advertisers to manage multiple ad campaigns, target specific audiences, and optimize ad spending to achieve efficiency.
This guide will provide an overview of how Demand-side platforms work and key features to look for.
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The process involves technologies such as Real-time bidding (RTB) and connection to ad exchanges and Supply-side platforms to simplify and streamline ad buying.
The following list explains the steps of creating a campaign and buying ad space using a DSP:
This whole process takes place as the page is loading, and can be completed in under 100 milliseconds.
It is important to understand the role of the other components like publishers, buyers, ad servers, Supply-side platforms (SSPs), and ad exchanges that play a critical role in the buying and selling of digital ad space.
Publishers and media owners use Supply-side platforms to organize, manage, and monetize their ad inventory. SSPs gather information about the available ad spaces and send it to ad exchanges.
The auction process happens in the ad exchange. These are digital marketplaces for buying and selling advertising impressions. Ad exchanges connect automatically to multiple buyer-side platforms exchanging information about available ad units and carrying out the transaction itself.
When choosing a DSP, advertisers should first look into their ad campaign needs. Then, look for the features that will help the campaign succeed.
Still, all Demand-side platforms share common components:
This component is in charge of placing bids on ad inventory for the advertiser during real-time bidding (RTB) auctions. The DSP can have multiple bidders in geographically distributed data centers so they can receive and respond to bids in real time. Usually, the same data centers where SSPs and ad exchanges are located. To accelerate the response time, bidders usually have a cached version of the ad campaign criteria.
DSPs connect to supply-side sources, such as ad exchanges and Supply-side platforms to get information about available inventory and place bids on it. Often, to refine ad targeting, Demand-side platforms integrate data processing tools, such as Data Management Platforms (DMPs). These solutions allow marketers to leverage data and target the audience efficiently.
This interface is shown in a dashboard where advertisers can create and manage their campaigns. They can set targeting criteria, placement, and frequency capping. This interface also displays the reports prepared by the reporting database.
This feature stores the data collected by the campaign tracker, processes it, and creates detailed reports. These reports are sent to the user interface for marketers to analyze the data.
This component collects the campaign’s performance data, like impressions, clicks, and notifications and sends this data to the reporting database.
This feature controls the campaign spending so advertisers don’t get over budget. In programmatic bidding, multiple bids are sent each second, which increases the chances of overspending. The banker stops the bidding when reaching the budget limit.
Ad servers are the components that display the winning ads to the user, both in SSPs and DSPs. However, in Demand-side platforms, the ad server is also responsible for storing creatives. Ad servers can be external or internal, which means some DSPs connect to an external ad server.
Depending on how the platform delivers the services you have two types of DSPs:
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Demand-side platforms (DSP) are essential in the landscape of programmatic advertising, revolutionizing the way advertisers buy digital media.
One of the critical advantages of using DSPs is the ability to access vast amounts of data for targeting. The platform uses various data types, including demographic, behavioral, and contextual data, to create highly personalized ad experiences. This success is driving the growth of programmatic advertising, which is forecasted to reach 91% of digital advertising spending in 2024.
Source
While 11 years ago programmatic advertising was only displayed on desktop or mobile, now we are seeing it in digital-out-of-home advertising, Connected TV (CTV).
Perion, a leader in the ad tech industry, leverages DSP technology integrating multiple data sources and AI-driven algorithms to optimize ad performance. A notable case study involves Perion’s successful collaboration with multinational athletic apparel retailer Lululemon. The digital programmatic out-of-home campaign achieved unprecedented results.
The goal of the campaign was to drive brand awareness and increase in-store traffic in Germany. The agency leveraged Perion technology Hivestack to deliver a targeted DOOH campaign. The campaign reached the target audience through outdoor screens in relevant environments, such as gyms, transit stations, and train platforms. The campaign achieved a 640% increase in brand image, a 208% increase in interset, and a 314% increase in footfall traffic.
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DSPs expand advertisers’ reach to a wider, often global ad inventory.
There are several advantages of using a DSP for advertisers instead of buying ads the traditional way.
The main advantage of a Demand-side platform is, undoubtedly, the automation of the buying process. Real-time bidding helps advertisers ensure they are paying for the ads within budget. It also saves time, because the whole negotiation and buying process takes milliseconds and requires no manual intervention from the advertisers.
Instead of having to search and reach publishers personally, advertisers using a DSP can reach multiple suppliers in one single platform. DSPs expand advertisers’ reach to a wider, often global ad inventory. Leading Demand-side platforms also offer inventory segmented according to criteria that help advertisers choose where their ads will be placed.
Demand-side platforms gather and process information to refine the campaign and the audience targeting. Advertisers using a DSP can ensure the ads reach the right user at the right time. The DSP also uses data to optimize ad frequency and detect remarketing opportunities.
One of the main characteristics of Demand-side platforms is their ability to consolidate information about the campaign’s performance in a centralized dashboard. Advertisers can analyze and use this information to optimize their campaigns.
While DSPs are platforms designed to help advertisers, they give some benefits to publishers too. When publishers engage a DSP as part of the programmatic selling process, they can optimize their yield for their ad space.
The DSP’s advanced targeting capabilities ensure the ad space goes to the highest bidder. This feature improves yield management and helps publishers monetize their inventory.
Demand-side platforms and Supply-side platforms are programmatic software solutions that work on opposite sides of the programmatic buying process. While Demand-side platforms help advertisers buy ad space, Supply-side platforms help sellers offer ad inventory.
DSP
SSP
Used by advertisers
Used by suppliers
Advertisers can buy ad impressions from ad exchanges at the best possible price.
Publishers use it to sell ad space programmatically at the highest possible bid.
Advertisers can set audience targeting parameters.
Connects publishers to several buyer-side platforms.
Ad networks and Demand-side platforms may seem similar in that both offer audience-targeting, but the capabilities differ greatly. DSPs provide advanced features for real-time bidding and audience targeting. However, ad networks offer targeting to a restricted set of audience segments.
Look for platforms that provide granular targeting options, such as geolocation, device type, and retargeting, to ensure your ads reach the most relevant audience.
When choosing a demand-side platform, selecting the one that will align with your advertising goals is important. Besides checking it has all the core elements, there are a couple of considerations to make when comparing DSPs.
For instance, the platform’s reach. Many demand-side platforms advertise their global reach as a key advantage. Still, while global traffic is important, it is more important to have the right type of traffic.
Here are other factors to consider when selecting a demand-side platform.
Check the level of support offered by the platform. Assess whether the platform provides support during the setup only or if it includes ongoing maintenance and technical support. How quickly they respond to advertisers’ requests for technical assistance and resolve issues, is also important.
Effective audience targeting is at the heart of programmatic advertising. A robust DSP should offer advanced targeting capabilities, allowing advertisers to reach specific audiences. Look for platforms that provide granular targeting options, such as geolocation, device type, and retargeting, to ensure your ads reach the most relevant audience.
The DSP should offer a user-friendly interface that allows advertisers to manage budgets, track performance metrics, and adjust bids in real time. Comprehensive reporting features are critical for analyzing campaign effectiveness.
Ensuring the ads appear in relevant and safe environments is a critical part of maintaining brand reputation. A reliable DSP should include contextual brand safety features that analyze the content of web pages where your ads may appear.
Perion’s technologies connect advertisers and publishers across leading digital channels. Integrating all channels, the platform connects the company’s supply and demand assets, enabling cost-effective ad placement for brands and publishers.
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A Digital-Out-of-Home Demand-Side platform is a specialized form of DSP that allows advertisers to purchase digital ad inventory on digital out-of-home ( DOOH) media, such as digital billboards, connected TVs, and screens in public places.
DOOH relies on location and contextual relevance for effective targeting and these DSPs automate and optimize the buying and ad placement process.
DSPs use various types of user data to optimize ad targeting, including demographic data (age, gender, income level), behavioral data (online activity, purchase history), contextual data (the content users are viewing), and local data.
These platforms are specifically designed to manage and optimize mobile ad campaigns. It focuses on buying mobile ad inventory, data like device type, location, and user behavior to target ads on mobile and websites.
Demand-side platforms can generate income in several ways. Many charge a percentage of the ad spend as transaction fees or a technology fee for using the platform. Other DSPs charge a flat monthly rate while others charge for managed services or upsell advanced analytics services. In most cases, the platform uses a combination of fees and rates.
The opposite of a demand-side platform is a Supply-side platform (SSP) DSPs are used by advertisers to buy ad space, and SSPs are used by publishers to sell their available ad inventory to advertisers in an automated and efficient manner.
We are pleased to share that Hivestack, our digital out-of-home (DOOH) platform, has partnered with Eletromidia, the major out-of-home (OOH) media company in Brazil
We are thrilled to share that Undertone & Vidazoo have been granted TAG certifications for 2024, symbolizing our unwavering commitment to integrity and quality in digital advertising.
Connected TV (CTV) advertising revolutionizes how brands reach and engage audiences.
