Demand-side platform

A demand-side platform (DSP) is a concept that combines various software for advertisers (or advertising agencies) to automate the process of buying and selling ad impressions in real time.^[1]

It provides digital advertising inventory with the dashboard, where the advertiser can manage their campaign using by defining the target audience, bid amount, overall budgets, ad format, and other parameters, getting feedback about ad impressions and audience behavior.^[2]

Much like Paid Search, using DSPs allows users to optimize based on set Key Performance Indicators such as effective cost per click (eCPC), and effective cost per action (eCPA).

There are 2 types of DSP:

• Full-service is a management model in which the planning, launch and optimization of an advertising campaign is carried out by specialists of the DSP platform.
• Self-service is a management model in which the planning, launch and optimization of an advertising campaign is carried out by specialists of the agency/advertiser.

DSP has absorbed the features of the real-time bidding of the previous generation and has brought a lot of new things to the advertising industry:

• Extremely high speed of operation — DSP allows agencies and advertisers to make transactions in real time;
• Wide audience targeting opportunities: direct (or vertical) targeting — by socio-demographic, geographical, temporal, behavioral characteristics, interests, etc. and lateral targeting, which identifies target groups for a specific task with dynamically changing criteria during an advertising campaign;
• Formation of detailed reports on each display, reflecting all the sites involved and the results of their work;
• Realtime statistics: the campaign progress report is reflected with a delay of only a few seconds, which allows you to quickly reduce the cost of inefficient traffic sources;
• Interaction with dozens of SSPs offering for sale advertising inventory of networks and independent platforms, which means unprecedented media coverage;
• The ability to optimize the DSP budget, including automatically. This is especially interesting in the case of buying up "residual traffic".

All these features are collected in a single system, which gives advertisers a unique opportunity to fully control the course of an advertising campaign and maximize its impact on the audience.^[3]

The functionality of the DSP often depends on the format of the media. For example, DSPs that advertise online can see how people behave after viewing an ad, whereas this is not possible in outdoor advertising^[4] or television and radio, where the advertising constitutes a one-to-many approach.^[5]

DSPs incorporate many of the facets previously offered by advertising networks, such as wide access to inventory and vertical and lateral targeting, with the ability to serve ads, real-time bid on ads, track the ads, and optimize. This is all kept within one interface that allows advertisers to control and maximize the impact of their ads. DSPs track frequency information, several forms of rich media ads, and some video metrics.

Many third parties are integrating with DSPs to provide better tracking. In addition, DSPs use advanced price reduction algorithms, commonly known as bid shading, to help advertisers procure ad impressions for a lower CPM in the first-price auction.

DSPs are commonly used for retargeting, as it is able to see a large volume of inventory in order to recognize an ad call with a user that an advertiser is trying to reach.

• Preferred deal: No auction, set CPM, non-guaranteed inventory
• Programmatic guaranteed: No auction, set CPM, guaranteed inventory
• Private marketplace (PMP): Real time bidding, price floor, select group of advertisers
• Open exchange buy: Real time bidding, variable CPM, open to all advertisers

• Ad exchange
• Supply-side platform
• Ad serving
• Header bidding

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