Online marketing basics: demand-side platform

At some point, anyone who ad­vert­ises online is going to encounter the subject of search engine ad­vert­ising and the various ad networks. These networks allow online ad­vert­isers to host their ads and banners on many different platforms. The challenge is finding the ad­vert­ising inventory that is both cost efficient and allows you to reach your personal goals and target group. A demand-side platform attempts to automate and optimise this search.

The aim of a DSP is to automate and thus optimise the process of buying ad­vert­ising inventory with the help of different al­gorithms. This increases the ef­fect­ive­ness of ad­vert­ising campaigns, since this method finds the best place­ments for banners and ads. This means the winning bid doesn’t only obtain the optimum range for its ads, but also that these ads reach more potential customers through precise targeting and re-targeting.

Ad­vert­isers use DSPs for op­tim­ising various data. An optimal con­fig­ur­a­tion is cal­cu­lated using

• data about demo­graph­ics,

• search histories,

• search queries,

• and data gathered using cookies.

Demand-side platforms bundle all the rates of many different networks together on a single platform. This gives ad­vert­isers access to more im­pres­sions and the bundled ranges of different networks. Ad­di­tion­ally, the database and the interface of different ad servers allows a precise con­fig­ur­a­tion of the campaign, meaning you can spend your budget as ef­fi­ciently as possible. This, along with real-time bidding and the ability to compare offers directly, means ad­vert­isers achieve the best possible results for an ad placement.

In the past, acquiring ad­vert­ising inventory was a drawn-out process that involved choosing a network, de­term­in­ing the maximum bid, and spe­cify­ing a target audience. This process, which once would have required several workers, is now automated by DSPs. The platform collects all the data about the available ad­vert­ising inventory from various networks. The cost of inventory is cal­cu­lated using RTB data and auto­mat­ic­ally paired with the ad­vert­iser’s pre-de­term­ined budget.

The process relies on the same bidding system that you may know from Google AdWords: Ad­vert­isers put forward a maximum bid, which indicates the highest price they are willing to pay for an ad. During the real time bidding process, the system auto­mat­ic­ally deploys the ad space that best suits the ad­vert­isers and their target audience.

Demand-side platforms function in a similar way to service providers that serve different customers. Agencies, ad­vert­isers, and busi­nesses can use DSPs to purchase different ad­vert­ising inventory, i.e. displays, videos, mobile ad­vert­ising, or search ads.

Two of the best-known platforms of this kind are:

• MediaMath

• The Trade Desk

Ad­vert­isers have two options when it comes to DSPs: they can either go for a full service DSP or a self-service DSP.

Full service DSP

With a full service model, the DSP assumes all the tasks as­so­ci­ated with acquiring inventory, including pur­chas­ing, mon­it­or­ing, op­tim­isa­tion and analysis. The greatest advantage for ad­vert­isers is that they don’t need a media team in order to be rep­res­en­ted on the real time bidding mar­ket­place. Generally, full service providers offer their customers different in­ter­faces and graphical user in­ter­faces so as to enable in-house use of the platform.

Self-service DSP

Opting for a self-service DSP, on the other hand, involves fi­nal­ising a license agreement between the ad­vert­iser and the DSP provider. This contract states that the company assumes re­spons­ib­il­ity for the man­age­ment and dis­tri­bu­tion of their ads. This method is generally as­so­ci­ated with more effort and costs, as it requires an ex­per­i­enced team of media experts to manage the account. Ex­per­i­ence and know-how plays a pivotal role here, as without a strong strategy, real time ad­vert­ising can quickly become expensive and thus in­ef­fi­cient, even with the demand-side platform.