A Demand Side Platform, or DSP, is an online advertising platform that makes it easier for an advertiser to buy and sell online display advertising on multiple ad exchanges. Demand side platforms are a more efficient way for advertisers and brands to purchase ads from many different ad exchanges; everything is centralized, including bidding and reporting.
DSPs also allow advertisers and brands to buy audiences rather than specific website ad placements through technology called real-time bidding. The DSPs use behavioral targeting data, collected from cookies and data exchanges, to identify audience segments. The advertiser then uses that targeting data to define what kind of person they want to target with their advertising and how much they are willing to pay per impression. Then the DSP bids on the ad impressions using that advertiser’s criteria and budget, and serves the ads.
Demand side platforms are to display advertising what Google AdWords for paid search advertising on Google. Just like Adwords, advertisers can choose budget by individual impression and by overall budget. Instead of targeting keywords like in AdWords, demand side platforms let you choose audience characteristics. Then, just like AdWords, the DSP serves ads for you wherever your target audience is; you don’t have to worry about picking the right websites because it’s done for you automatically.
Many advertisers believe that demand side platforms provide greater transparency into the advertising process. Advertisers know where their ads have been displayed and what algorithms and data were used to identify the targets. Direct response advertisers can measure conversions as well. However, there is growing frustration that DSPs, and the advertising ecosystem in general, does not have any success metrics beyond clicks and conversions. At Crowd Science, we believe factors like brand awareness and consideration will emerge as key metrics for brands and advertisers as the ad ecosystem evolves.