Ad buying and selling were not as easy as it is today. Sit-down meetings, contracts, sit-down meetings all were at one time part of the drawn-out procedure of publishing an ad. During the past, it could take a few weeks or days. Now, with the help of demand-side platforms and supply-side platforms, it is an effective and near-instantaneous procedure.
What is a demand-side platform (DSP)?
A demand-side platform is a software utilized by advertisers to purchase mobile, video, search ads from a market on which various publishers list their advertising inventories. These platforms permit for the management of advertising across several real-time bidding (RTB) networks, as opposed to simply one, like Google Ads. Together with the supply-side platforms (SSP), demand side platforms (DSP) aid programmatic advertising.
Programmatic Advertising Defined
Programmatic advertising is defined as the procedure of buying and selling ads with software and then publishing those ads based on complex algorithms. Nowadays, most of the different types of online advertising are done through direct deals and real-time bidding.
1. Real-time bidding: This type of Digital advertising takes place in real-time. You mention whom you want to reach with your ad campaigns, how much money are you planning to spend, then, comes the bidding part between you and all other advertisers who want to reach the same audience.
A customer visits a page and before the page gets fully loaded, algorithms decide which text ads should be displayed to them. These algorithms consider several things like IP address, time of the day, and browsing history. Whichever advertiser bids highest for the impression when everything is collected is the winner of the placement. The result is their ads will be shown once the page gets fully loaded.
2. Direct programmatic ads: This type of ads is more of a traditional type of model moved online. It is right for the businesses that look for guaranteed ad placements in main locations. The homepage of popular publishers, for instance, will most often sell their ad space through programmatic direct deals.
The publisher provides details about the visitors to the advertiser. If by any chance those visitors are the right audience for the advertiser then, the advertiser can reserve a part of the publishing space to be used in the future for an upcoming advertising campaign.
Programmatic advertising has been growing. By the year 2019, we can expect that 83.6% of digital marketing will be purchased and sold programmatically. Though, programmatic advertising is not about display advertising only.
It refers to ad sales on various search networks also or any other network which is purchased with the software. However, when you purchase video ads through these networks (like for example, Google Adsense) individually, then you are not utilizing a demand-side platform.
How does DSP work?
Demand-side platforms are free of individual networks. If you are handling ads through ad networks, you are purchasing impressions on Google publishers only. If you are making use of the Facebook Ads Manager to purchase ads, you are purchasing impressions on Instagram or Facebook precisely.
Demand-side platforms are free of such networks. It is third-party software that permits you to buy, check and handle ads across several networks from a single location.
In Programmatic advertising, demand-side platforms provide advertisers all information they require to purchase advertising from publishers. They never own or buy digital media directly from the publishers, but rather communicate with a supply-side platform through an ad exchange.
Supply-side platforms permit the publishers to list out their inventory on ad exchange, and they communicate with demand-side platforms regarding the details of an impression.
If for instance that impression is of a marketing manager who has visited your demo post, clicked your landing page earlier, she is of more value than someone who has never visited your website earlier. In such a case, your demand-side platform will probably bid higher for the impressions. Whether you will win the bid or not depends on how important that impression is for other businesses.
Maybe she has abandoned her shopping cart on an eCommerce website. In such a case, the eCommerce site might bid more amount to serve an ad that takes her to the checkout page. It mainly depends on the budget set by the bidder and the value of an impression. This is automatically facilitated by DSP, SSP and ad exchange between the publishers and advertisers.
The way a demand side platform works is quite technical, however in simple words, a DSP is connected to ad inventory supply sources where lots of publishers have made supplies to be available. This assists the advertisers to purchase ad inventory placements across various publisher’s mobile apps and website based on the impressions.
These days the new generation DSP’s do not connect only to ad exchanges and ad networks as in case of old, but they provide cross-channel media buying. Some of the new platforms that can be purchased into using a DSP are:
b) Direct publishers (In-app and web)
Earlier, media buyers had to handle several ad campaigns from different sources like Google, social media like Twitter, Facebook and control them in various dashboards. However, things have changed now.
New generation DSP’s can easily consolidate campaigns from various channels to a single user interface. Media buyers can merge campaigns from various channels into a single user interface. Media buyers can nowadays set-up, optimize, check and attain ideas of campaigns from various channels, in one DSP platform.
There are a few ways to sell ads in DSP’s, based on the type of DSP you work with. Usually, if the DSP is precisely designed for performance campaigns like app-installs, then the fee depends on Cost per install (CPI). Most of the performance-based platforms utilize these:
1. Cost Per Install (CPI)
2. Cost Per Click (CPC) mainly for driving traffic to the landing pages
3. Cost Per Lead/ Cost Per Action (CPL/CPA)-It is mainly used for video advertising campaigns
4. Cost per view (CPV) – It is mainly meant for video advertising campaigns
However, most of the programmatic ads are sold utilizing the Cost per mile (CPM). This model is meant for generating awareness about ad campaigns. The price of ad impressions in DSP is determined by a real-time bidding procedure, that takes place within the first few milliseconds, as a user loads website or interacts with a mobile app.
Much different from the traditional methods of buying media, with a demand-side platform, there is no need for a human being to negotiate costs with publishers, as all this takes place in an automatic way or “programmatically”.
The basic difference between ad networks and DSP’s
Ad networks permit the advertisers to purchase ad inventory in large amount rather than a single impression at one point of time. In simple language, ad networks collect ad inventories from different publishers, grouping them up and selling them in the form of slices to the advertisers. However, it is not mandatory that all the ad networks support real-time bidding (RTB).
Demand-side platforms are exclusive as they provide similar competencies as what ad networks used to offer, with an addition to a set of audience targeting choices. If we consider the benefit of DSP over ad networks is that they offer advertisers with an ability to do real-time bidding on the ads, serve ads to various platforms, track and optimize- all under one interface.
Some of the targeting options provided by a DSP include:
B) Demographic targeting
C) Contextual targeting
D) Keyword targeting
F) Device targeting
DSP’s are also utilized for retargeting campaigns. It is possible as they can manage large numbers of ad inventories and identify ad requests with a perfect target audience, which are targeted by the advertiser.
Advantages of using a DSP
1) Efficiency- If you are handling campaigns across different networks, a demand-side platform is beneficial to use. This way, everything can be adjusted from a single dashboard.
2) Data- Many of DSP’s partners with a third-party data provider to provide the advertiser’s information. More often, it is more than what one network can offer. In addition, there are many DSP’s that permit customers to import their data from a DMP or CRM
3) Support- Demand-side platforms will most often offer support beyond traditional helpdesk-style customer support of a network
4) Targeting-Large number of data comes targeting capabilities. Improved targeting means more personalized advertisements and post-click landing pages, which in turn signifies a higher chance of conversion
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