You may have heard of demand-side platforms and are wondering what they are.
Although the name sounds complex, DPSs are actually quite simple.
A demand supply platform is a software platform designed to assist clients to purchase advertising through an automated process.
They are often used by agencies and advertisers to assist them in purchasing mobile, video, search and display advertisements online.
Why DSPs are important In the past, you could only purchase or sell ads manually.
This required advertisers and businesses alike to invest in human capital for this task.
This method of purchase and sale of digital ads however was quite costly and in many cases unreliable.
DSPs were introduced to help make the process much cheaper and more efficient.
They achieved this by removing the human element from the process.
They also removed the need to negotiate rates for digital ads.
The DSPs simply fax ad insertion orders.
This allows for more orders to be placed within a very short time.
How DSPs work Without getting into the technical side of it all, DSPs simply work by allowing the advertiser to purchase impressions from across a wide range of publisher websites.
The DSPs however improve accuracy and efficiency by targeting specific users.
The target audience is based on the information the DSPs obtain based on location and browsing behavior.
Publisher sites make ad impressions available to DSPs via marketplaces that are known as ad exchanges.
DSPs therefore automatically determine which of the impressions on the marketplaces make the most sense to the advertiser.
The price of the impression is usually determined based on real-time auction bidding.
This ensures that there is no need for human sales people to negotiate prices as the impressions are sold to the highest bidders.
Although the process sounds like it takes a long time, it actually all happens in a matter of miliseconds.
This is the time equivalent to that of a user loading a webpage.
The time taken for these transactions is therefore cut short drastically by using DSPs.
Different from Ad Networks DSPs are similar to ad networks to a certain extend.
However, they include access to a wider range of inventory.
They also have greater targeting capabilities.
DSPs also have the advantage of being able to purchase, serve and track the ads from a centralized tool.
This makes it possible for users to further optimize their ads for better results.
DSPs are gradually replacing ad networks as being a more cost effective and accurate way of publishing digital ads.