Digital advertising is a multi-billion dollar industry. Whether you’re a publisher or a marketer, you’d agree that the buying and selling of ad spaces are quite lucrative. Yes, everyone makes lots of money from the process regardless of the side of the coin they find themselves in.
Speaking of digital advertising, you’d hear some technical terms like demand-side platform (DSP) vs supply-side platform (SSP) [DSP vs SSP], and data management platform (DMP). These terms are a vital part of the digital ecosystem.
They sound similar, and pretty much work together — but they are not the same.
To better understand DSP vs SSP, you’ve got to take a look at the stock exchange analogy. The stock exchange is a marketplace where buyers and sellers perform stock transactions — and it’s synonymous with an ad exchange.
For the ad exchange, buyers and sellers trade digital advertising spots. Typically, sellers are the publishers while buyers are advertising agencies and brands that make bids or purchases. If everything is working well, both advertisers and publishers would easily transact business without any hitch.
By now, you’re probably wondering what exactly is DSP, and how does it work? Well, here’s what you need to know.
In this blog post, you’ll discover:
To thrive in the industry, media buyers and advertisers need a platform where they can purchase and manage Google Ads inventory. Such a platform is known as a demand-side platform (DSP). And most of these platforms are pretty much owned by technology companies and advertising agencies. These companies (or agencies) act as an intermediary for brands that want to promote their digital products using these channels.
Simply put, a DSP is software that helps advertisers (and media buyers) buy ads using automated systems. As an advertiser, you get to purchase ad impressions from Google Ads and similar ad exchanges.
Now the big question “What is a (DSP) demand-side platform?’ has been tackled, you’ve got to understand the next big question “how do DSP work?”
Here is how it works…
With DSP, advertisers (or agencies) get to purchase inventory (or impressions) from various advertising sources like games, CTV, podcasts, mobile applications, websites, and much more.
It’s designed in such a way as to help advertisers monitor their advertising on various platforms, analyze Google Ads data, and track statistics. With such an automated system in the platform, advertisers get to easily optimize their targeting and also use a single interface to participate in various advertising auctions.
With the DSP technology, the transaction process is pretty much simplified — and advertisers have no need of signing contracts, participating in cost per click negotiations, or getting involved in website analysis. Yes, it’s an automated process. No need for the manual twist and turns that goes into the purchase of ad inventory (or impressions).
DSP helps in the expanding or narrowing of target audiences, PPC campaign optimization, managing purchases, and monitoring all processes that go into building a robust ad inventory.
Furthermore, you get the chance of buying impressions from various website without going through human factors. This will, in turn, help save more time and money.
Still don’t get it? Well, here is how DSP works in simple terms.
DSP is built for buyers, and it offers several publishers for buyers to choose from. Before the advent of DSPs, the buying and selling of ads were handled by humans — salespersons. And that led to a costly and ineffective process. As already stated, DSPs cut off the need for middlemen (salespersons), automating the entire process. The automation process pretty much eliminated the need for negotiation (which is the human side of things).
As publishers, DSP helps drive your target audience to your business. This way, they get to buy ad impressions from you. To identify your target market, you’ve got to analyze the location and behavior of your web visitors.
For a smooth transaction, there has to be a medium where impressions are exchanged between sellers and buyers — and that’s where ad exchange comes into play. Web owners offer their products using an ad exchange, and the DSP gets to pick the right product for the buyer.
Real-time auction (or real-time bidding) is used for determining the price for an impression. The bidding process eliminates the need for a salesperson who would negotiate the bidding process.
Yes, the big question “how do DSP work?” has been tackled. But that’s not all there is to the inner workings of the demand-side platform, you’ll discover more elements in this section.
As earlier stated, DSP helps advertisers buy ad impressions from various publishers’ websites. These Google Ads impressions will be targeted to users based on some parameters like browsing behavior the user’s location, search history and much more.
Furthermore, DSP helps you identify ad impressions that are the cheapest and most efficient for the advertiser.
In a nutshell, DSP helps advertisers to.
If you’re a newbie, you’d gain more value by going through some examples of DSP.
Speaking of examples of DSPs, you’ve got to consider MediaMath, Google Display Network & Video 360, Adobe Advertising Cloud, and Xandr. But there are ad tech companies like Xandr that offer a mix of SSP and DSP services. There are also others like Adform that offer a mix of all three services — DSP, DMP, and SSP services. These are all good examples of DSPs.
These companies are structured to help publishers connect with the right advertisers. It’s also designed to help the two parties gain better transparency and efficiency when it comes to managing advertising operations.
Enough of DSP. Let’s take a deep dive into the supply side of things.
The first stop will be to tackle another big question – What is the (SSP) supply-side platform?
A supply-side platform (SSP) is quite different from a DSP. After all, publishers are the primary players in these platforms. With the SSP, publishers get to sell ad inventory across various ad exchanges. And these ad inventories are bought by advertisers.
The SSP pretty much serves as a way that helps publishers make their ad inventory available to a wide range of advertisers who need it. Yes, it’s a sure platform that helps publishers maximize their ad revenue.
In simple terms, the SSP is the Sell-Side Platform. While the DSP helps advertisers easily buy impressions at the lowest possible price, the SSP pretty much does the opposite — it helps publishers sell impressions to buyers at the maximum possible price. You see, the DSP vs SSP is two sides of the same coin.
The Supply-side platform is designed for publishers. It helps online media advertise their impression while showing the cost. It also helps online media expand their online trading platform to keep the cash rolling in.
With the SSP, publishers get to have the highest price for their ad impression, while avoiding empty ad spaces.
Now you know the answer to the “What is a (SSP) supply-side platform?” question, here are four benefits of SSP to publishers.
Moving on, you’ve got to consider how SSP works.
By now, you probably know that SSPs connect publishers’ ad inventory to DSPs and various ad exchanges.
As a publisher, supply-side platforms help you to.
Thinking of examples of SSP? Well, Xandr, PubMatic, and OpenX are some examples of SSP across the globe. As a general rule of thumb, you’ve got to know that the price obtainable in one SSP may not necessarily be the highest price obtainable in the market.
Why?
All buyers don’t go for the same SSP. Just like the way there are various car brands, and each brand has its ideal customer avatar, that’s how it is with the digital industry — each SSP has its ideal customers, and they are positioned in such a way as to attract them.
As a publisher, you stand a lot to gain from website monetization platforms. If you play the right cards, you’d pretty much make significant progress in no time.
Now you’ve got a good grasp of what DSP and SSP are, the next step is to identify the difference between DSP and SSP.
Speaking of DSP vs SSP, you’d understand that these platforms offer identical services to different users. It’s more like looking at the number 6. To someone, it’s 6, and to another person in the opposite direction, it’s 9. You see, the difference lies in the perspective, and not in the number itself.
The same can be said of DSP vs SSP. Both service platforms complement each other — they are two sides of the same coin. The major difference lies in who is the target customer.
If you take a close look at the DSP platform, you’d notice that the target customers are advertisers and marketers who are looking for a platform that offers much control and impact over their ads. For these ads, the advertiser (or marketer) has to provide a set of constraints. Such constraints could be device (or geo) targeting and other advanced targeting techniques like keyword targeting.
Cost plays a major role in your choice of DSP. After all, the cost pretty much influences your overall return on investment. For SSP, the end customer is the publisher. The primary purpose is to sell ads at the highest possible price that matches the available demand.
You see, it’s quite tricky to pinpoint the difference between the two. After all, they are both designed using similar technology. But when it comes down to the work done by SSPs and DSPs, you’d see some differentiating factors.
DSPs offers a centralized tool for ads — serving, buying, and tracking. It’s a typical server that serves ads. You see, it’s built with a narrow focus, and pretty much helps you to optimize several campaigns with ease. However, SSPs are more encompassing. They are built to allow publishers to connect their inventory to multiple ad exchanges and ad networks. Furthermore, there are options for connecting with DSPs.
To a large extent, SSPs are the largest source of ad inventory, and it helps publishers to establish some rules. That is, publishers have the flexibility of setting up a minimum selling amount for their ad inventory. And the inventory could be directed through some channel or to a media buyer. This way, publishers could easily drive new advertisers to their website — and that’s what gave birth to the term sell-side platform.
By now, you must be thinking “how do SSP and DSP work together?” Well, here is what you need to know.
Whether you’re an advertiser or a publisher, you’d access advertising exchanges either through the DSP or SSP platform. Publishers will most likely use the SSP, while advertisers will use DSP. Everything starts by visiting a reliable website with an ad slot. The DSP vs SSP coexist for the smooth functioning of the digital industry.
In most publishers’ websites, there will be a code snippet embedded by the ad network. And the code snippet primarily helps advertisers use DSP to place their ads in the ad network supplies. Everything is routed via an ad exchange. The ad exchange translates it to an auction.
Using DSPs, bid requests are sent, and bids are made on behalf of advertisers. All bids are collected by the ad exchange, and the winning bid is passed from the publisher’s ad server to the original tag.
Here’s another way to look at it…
DSPs help to streamline the entire media buying process. The streamlining process pretty much involves bidding, combining, and optimizing digital inventory across the media landscape. On the flip side, the SSP acts as a middleman in the supply-side of the media buying process.
The primary purpose is to help publishers manage their impressions, inventory, and the price they put on it. It also offers a reliable way for publishers to maximize the revenue generated from advertising.
Simply put, SSP is to publishers as DSP is to advertisers.
Google Display Network (GDN) is the extension of the Google Ads platform. It allows users to target their audience using video ads and banners. On the other hand, a demand side platform (DSP) offers a reliable route where people get to programmatically purchase ad spaces online. The previous section discussed the difference between DSP and SSP – maybe you should take a look at that if it’s of interest to you.
Demand-side platforms, supply-side platforms, and data management platforms are all vital parts of the digital marketing process. They work together and automate the buying and selling of advertising. For clarity, these three have different functions when it comes to digital marketing.
Several SSPs use higher bidding to bid on the same ad inventory. However, only the bid that wins the auction makes money.
A demand-side platform is software that automates the process that goes into the purchase of advertising. Ideally, advertisers and agencies use DSPs to buy mobile, video, display, and search ads.
DSP vs SSP are designed to eliminate the need for human factors. Before the advent of DSPs and SSPs, humans were the driving force behind the process that goes into the buying or selling of online ads.
The entire process was inefficient, unreliable, and somewhat costly. However, DSPs and SSPs change the game — you get things done using a wallet-friendly budget. Also, with the removal of the human factor, there was no need for the negotiation of ad rates. That’s not all, manual processes were eliminated.
For publishers, SSPs play a vital role in lowering the possibility of undervaluing their ad inventory. Furthermore, they help in establishing quality relationships with other networks.
In a nutshell, DSP vs SSP are two sides of the same coin.
Now you understand the difference between DSPs and SSPs, how will you take advantage of the system to improve your marketing strategy?
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