What Is a Demand-Side Platform (DSP)?

what is demand-side platform

The online advertising ecosystem consists of numerous components, one of which is a demand-side platform (DSP). In this article we are going to dive into the details of its work and find out the main advantages of joining the demand-side platform. You will also learn how you can benefit from using programmatic advertising.

The Definition of DSP

Nowadays there are lots of ways of promotion on the Internet. Bulk purchase of ads has become a common thing for ad networks, marketing agencies and direct advertisers. The process of ad buying is not the same that it was 10-15 years ago. Automation allows you to save money and time and deliver ads to the needed audience. Here comes the DSP - demand-side platform.

Demand side platform definition includes a software for advertisers for buying ad spaces from publishers via RTB (real-time bidding). A demand side platform can work either with one supply-side platform or connect multiple SSPs and ad exchanges for searching high-quality traffic. The main idea of the demand-side platform is to buy impressions of the target audience for the optimal price. Advertisers can purchase a wide range of ad space from numerous publishers on one dashboard. 

How Does a Demand-Side Platform Work?

In our previous blog post we have already talked about main players of programmatic advertising, and you have found out what is a supply-side platform. On one hand we have a supply-side: those who sell ad space on their inventory. On the other comes a demand-side: those who buy these ad placements. So what is demand side platform itself?

Imagine, you are an advertiser, and you need to promote your online store. You create an account at the demand-side platform and prepare your ad campaign. Before you launch it you need to upload the advertisement itself and fill out certain requirements, e.g. you need to define for whom you will show your ads. That is all you need to do. The rest will be done by the technology of real-time bidding. 

Once a user who fits your requirements opens a website or an app, the SSP sends a request to the DSP. Then the DSP analyzes the data and targeting settings, decides how much this particular ad slot can cost and bids for this impression. The winner is the DSP which offers the highest price, but it pays the second highest bid price +$0.01. This is called the second price auction model.

What are the Advantages of Demand-Side Platform?

Over the last decade there has been a leap in buying ads programmatically. Technology of real-time bidding opens advertisers a list of opportunities for running effective ad campaigns, using the minimal budget. It’s essential to know what is a demand side platform and what pros it has. Let’s look at the advantages offered by an up-to-date DSP:

Advanced Targeting

We are sure that the effectiveness of ad campaigns depends on the right defined audience. Premium demand-side platforms, such as DecenterAds DSP, offer their partners a wide list of targeting options. You can target your potential customers by country, city, timezone and even choose the certain location on the map for precise targeting. Besides, you can define browsers, device types and OSs to show your ads. 

Moreover, you can use an option of frequency capping and decide how many times the same user can see your ad within a certain time frame. It is also essential for advertisers to have an opportunity to choose particular websites for placing or not placing their ads on. You can upload whitelists or blacklists respectively right in your personal account.

Interface and Reporting

User-friendly interface is a must have for a self-serve demand-side platform. The DSP is beneficial for direct advertisers, especially for small and medium companies, because they do not need to pay extra costs for third-party services, e.g. marketing agencies and ad networks. The DSP allows advertisers to launch ad campaigns fully themselves. Friendly account managers will help you with launching ad campaigns as well if needed.

First, you need to upload your ad creative into the dashboard. The most popular ad formats are display, video and native. It’s important to match IAB standards of ad formats so you can customize the exact dimensions of your creatives according to IAB lines right at our platform. The second step is to set up targeting - you just checkbox, choose from the list or write down needed options. Then, you should define the budget. DecenterAds DSP works on CPM (cost per mile) model. It is the common unit in programmatic advertising, by which advertisers pay 1/1000 per single impression.

Advertisers also get a transparent real-time reporting. On the dashboard you can see the recent activity on impressions, spend and current balance. Also, you will find the charts of top performing campaigns and creatives. Online tracking allows advertisers to estimate the efficiency of ad campaigns and implement changes if needed without stopping them. Such analytics helps advertisers to define the strategy for further campaigns to get the most of programmatic advertising.

Brand Safety and Security

Security is a crucial factor for advertisers while choosing the right DSP. Ad buyers must be sure that they won’t pay for fake impressions. Firstly, premium demand-side platforms integrate only with trustworthy SSPs, which have a good reputation on the market. Still nobody is 100% protected from unscrupulous publishers, that is why it is important to integrate with those DSPs which use special tools for detecting fraudulent traffic. They scan impressions, and in the case ad views from bots are revealed, a respective refund request is sent to the SSP. So you can get your money back if you don’t get impressions from real people. 

To prevent such incidents in the future, advertisers can simply block from their ad campaigns apps and bundles detected in fraud activities using the blacklist option on the dashboard. It works well also for efficiency optimization. You can shorten the inventory selection by whitelisting certain sites, if you know that engagement rate will be the highest there.

Now with the demand side platform explained, you know how to choose a proper DSP for promoting your products or services. Programmatic advertising opens up an opportunity to increase your sales with minimal efforts. It is one of the most effective ways to get mass brand awareness for an optimal price. Let machine learning work for you!