What is a Demand Side Platform DSP

IT for marketing

More and more marketers, whether in-house or on the agency side, are relying on automated media buying. The basic requirement for programmatic advertising of your own advertising in the digital environment is the use of a Demand Side Platform (DSP).

Demand Side Platform - Definition

A Demand Side Platform is a technology platform that automates the purchase of advertising space and inventory and makes it efficient through the use of algorithms. Put simply, companies can use a DSP to compare the prices of online advertising space on different marketplaces. Once the decision has been made for a specific advertising space, the DSP initiates participation in a real-time auction initiated by a supply-side platform and buys the space from the respective provider.

DSPs process massive amounts of data in a very short time and sort the advertising market for their users on the basis of defined criteria. They are used by advertising companies to optimize inventory purchases and to use the available data specifically for campaign success.
The aim is to only place advertisements where it makes the most sense to reach the target group.

Demand Side Platforms - Provider

There are innumerable providers of DSPs in the adtech market. The most relevant for the German market are:

  • Active agent,

  • Adform,

  • Display & Video 360,

  • MediaMath,

  • The Trade Desk and

  • Xandr (AppNexus).

While the basic functionality is always the same, the individual technologies differ mainly in terms of their focus. Depending on the goals marketers pursue, not every technology is suitable to the same extent.

Demand-side platform - selection criteria

Before starting to choose the technology, it is important to clearly define the goals of your campaign. It is as much about the question of the target group as it is about the question of costs. But other factors also play a role.

  • budget: The budget to be taken into account not only relates to the specific purchase of advertising space, but must also cover the technical costs, i.e. the costs for using the respective platform. The smaller the total budget, the more important these platform fees and, in some cases, fees for data processing are.

  • Duration of the campaign: The duration of the campaign basically has no influence on the choice of platform. For companies that want to test in advance whether a form of online marketing is the right one, some providers have test licenses in their portfolio. The technology can be tried out within a test period without having to commit to a longer period of time. If the duration of the campaign is adjusted to this period, time can therefore be a relevant factor in the selection. In certain setups, technologies can also be compared with one another in live operation.

  • KPIs: DSPs support the advertising company by means of reports in achieving the set goals. Depending on the provider, different evaluation options are available, which differ in the amount of data and in the depth of the insights. Some technologies rely on third-party providers to evaluate the data and thus make the desired goals measurable. Goals can be, for example, increasing the company's visibility (branding campaign) or a specific call-to-action (performance campaign).

  • Define target groups: An elementary success factor of a programmatic campaign is addressing the right target group. The offer of the target group segments varies depending on the provider of the Demand Side Platform. The offer differs depending on the data available on the one hand and the options for integrating your own first-party data on the other.

Part of the question of the right target groups that a technology can reach are also the environments on which the respective providers have focused. Examples for this are:

  • Target groups in digital television

  • Target audience audio area

  • Target groups in classic display shopping.

It is also relevant here whether an international or national target group is to be reached. The choice of the environment, in turn, is closely linked to the agreed goals.

Not all DSPs are created equal

Not every format or inventory can be played out equally well via every DSP. Some providers have integrated a variety of special formats, some rely on the classic formats and thus offer less scope. Depending on how unusual the planned advertising material should be, this factor must be taken into account. However, there is the option of booking additional access to an ad server in order to have access to the full range of advertising media and additional delivery options.

The advantages and disadvantages of the individual technologies cannot be defined across the board, rather they go hand-in-hand with the set goals, your own data diversity and the budget. No solution can cover all needs at once. The goals must therefore be prioritized. Thorough preparatory work as well as obtaining various offers and extensive information is essential. (bw)