What is a demand-side platform?
A demand-side platform (DSP) is a software system that lets advertisers buy digital advertising from multiple sources through one interface. It plays a central role in programmatic advertising so marketers can manage and improve advertising campaigns across ad exchanges and ad networks in real time. Unlike traditional methods, DSPs support automated buying, which makes ad buying more efficient and easier to target. These DSP platforms are integrated with data management tools to analyze large amounts of data to help advertisers make better decisions based on user behavior and demographics. DSPs are an important component of advertising platforms because they bridge the gap between advertisers and publishers and help ensure ads reach the target audience at the right time. They also support multiple targeted ad formats, including display ads, video, mobile app, and social ads, meaning digital marketers can use them for broader digital advertising strategies. In essence, DSPs streamline the ad-buying process.
Core features
The two major components of a DSP are a streamlined user interface and data management. The DSP’s user interface is designed to be intuitive, including tools for setting up, monitoring, and optimizing ad campaigns across digital channels.
DSPs integrate with data management platforms (DMP) to make collecting, analyzing, and using audience data easier. This helps marketers target ads to audiences more carefully. A DMP aggregates user data from various online and offline sources and segments this data to help DSPs tailor ad targeting more effectively. This helps marketers better target ads to audiences. DSPs support a range of data types, including first-party, second-party, and third-party data, to help advertisers refine their targeting strategies.
They are also a part of a real-time bidding (RTB) process, which lets advertisers bid on ad inventory in real time. Ad exchanges play an important role here by aggregating publisher inventory and making auctions for ad placements easier. DSPs connect to these ad exchanges to gain access to multiple publishers and bid on ad space programmatically. Finally, DSPs offer reporting tools that show how well advertising campaigns are working, making real-time tweaks possible. This data-driven approach helps marketers achieve greater success.
Feature | Description |
User interface | Intuitive tools for campaign management and monitoring. |
Data management | Integration with DSPs for accurate audience targeting. |
Real-time bidding | Automated process for bidding on advertising inventory in real time. |
Reporting tools | Detailed analytics and reports for ad performance tracking and optimization. |
Want to learn more about DSP architecture? Explore our detailed white paper on real-time bidding and campaign reporting using Aerospike.
DSP’s core: Real-time bidding
DSPs work through a series of automated processes. The core mechanism involves RTB, where DSPs participate in auctions to bid on ad inventory. This process means ads are placed in front of the right audience at the right time.
RTB: DSPs automatically bid on ad impressions in real-time auctions, determining the value of each impression based on targeting criteria.
Ad inventory access: DSPs connect to multiple ad exchanges, gaining access to a wide range of ad inventory across various digital platforms.
Ad placement: Once a bid is won, the ad is placed on the publisher's site, reaching the targeted audience.
Optimization: DSPs use machine learning algorithms to determine the best ads and platforms based on real-time data.
DSPs help advertisers manage and execute complex ad campaigns efficiently. With RTB and targeting algorithms, DSPs deliver ads to the most relevant audiences to make the ad campaign more effective.
Role of ad servers
Ad servers work alongside DSPs to manage ad delivery, tracking, and reporting. While DSPs handle programmatic bidding and targeting, ad servers store ads, send them to the appropriate publisher sites, and collect real-time performance data (clicks, impressions, conversions). This two-way communication means DSPs have the most up-to-date campaign metrics to do a better job with future ad placements.
With RTB and targeting algorithms, DSPs deliver ads to the most relevant audiences to make the ad campaign more effective.
Ready to explore the future of advertising beyond DSPs? Dive into our latest insights on AI-driven personalization and the end of identity-based targeting.
Advantages for advertisers
DSPs offer advertisers several benefits. Automating buying ad space is more efficient, reducing the time and effort traditionally spent on negotiations and manual bookings. DSPs also help advertisers manage multiple ad exchanges and data exchanges through one interface, simplifying the workflow and using data to determine the most appropriate place to put an ad.
That’s where targeting comes in. DSPs use large amounts of data so advertisers can define specific targeting criteria, such as demographics, interests, and online behaviors, to ensure ads reach the audience most likely to buy the product or service, using ad dollars more effectively.
Finally, RTB means advertisers can make real-time decisions about purchasing ad inventory. This dynamic bidding process lets advertisers adjust their strategies quickly based on performance data, leading to more successful ad campaigns.
Overall, DSPs help advertisers be more efficient and precise, leading to more effective campaigns and better use of ad budgets.
Brand safety
One of the key concerns for advertisers is making sure their ads appear in places that don’t embarrass the company or make it look bad. DSPs often integrate tools and settings that allow advertisers to block or exclude certain types of content or publishers deemed inappropriate or non-compliant. By setting brand safety filters, DSPs help maintain a positive brand image and protect advertisers from the negative associations of appearing next to offensive or misleading content.
Fraud detection
DSPs also incorporate fraud detection measures to protect advertisers against invalid traffic, click fraud, and malicious bots. Through specialized tracking, suspicious activity monitoring, and partnerships with third-party verification vendors, DSPs help ensure ad budgets are spent effectively and only on genuine impressions.
Overall, DSPs help advertisers be more efficient and precise, leading to more effective campaigns and better use of ad budgets.
DSP vs. SSP
The other side of the digital ad ecosystem is supply-side platforms (SSPs). While DSPs help advertisers buy ads, SSPs help publishers sell their ad space more efficiently, helping them monetize by filling all the available ad inventory.
While DSPs use customer data to fine-tune audience segments, SSPs, as their name implies, focus on the supply side. They provide publishers with the tools to manage their ad slots, connect with multiple ad exchanges, and adjust pricing through automated auction processes.
DSPs are advertiser-centric, emphasizing demand and audience reach, while SSPs are publisher-centric, emphasizing supply and making money on the inventory. DSPs and SSPs collaborate within ad exchanges, removing friction from the buying and selling process and benefitting both advertisers and publishers.
Next steps
A DSP will receive up to tens of millions of bid requests per second, depending on the time of the year and their geographical market. A bid response is required in about 75 milliseconds, and the auction is complete (win or lose) in about 100 milliseconds. A DSP solution requires scalable, high throughput, low latency, and high availability hardware and software. It is designed to respond to each bid request at the best price based on the anonymous profile of the user interacting with the publisher.
Moreover, the scale of the store that holds user profiles is not trivial—it could hold billions of records, with each access to any record expected to have a latency of under one millisecond. Tens of millions of reads and writes occur every second of the day and every day of the year. The store must also be reliable because a user profile store outage for just an hour can cost a DSP hundreds of thousands of dollars in lost revenue.
So, operating a DSP at scale requires a database that offers sub-millisecond latencies and supports millions of operations per second without requiring a large amount of expensive in-memory storage in the process.
What is a demand-side platform?
A demand-side platform (DSP) is a software system that lets advertisers buy digital advertising from multiple sources through one interface. It plays a central role in programmatic advertising so marketers can manage and improve advertising campaigns across ad exchanges and ad networks in real time. Unlike traditional methods, DSPs support automated buying, which makes ad buying more efficient and easier to target. These DSP platforms are integrated with data management tools to analyze large amounts of data to help advertisers make better decisions based on user behavior and demographics. DSPs are an important component of advertising platforms because they bridge the gap between advertisers and publishers and help ensure ads reach the target audience at the right time. They also support multiple targeted ad formats, including display ads, video, mobile app, and social ads, meaning digital marketers can use them for broader digital advertising strategies. In essence, DSPs streamline the ad-buying process.
Core features
The two major components of a DSP are a streamlined user interface and data management. The DSP’s user interface is designed to be intuitive, including tools for setting up, monitoring, and optimizing ad campaigns across digital channels.
DSPs integrate with data management platforms (DMP) to make collecting, analyzing, and using audience data easier. This helps marketers target ads to audiences more carefully. A DMP aggregates user data from various online and offline sources and segments this data to help DSPs tailor ad targeting more effectively. This helps marketers better target ads to audiences. DSPs support a range of data types, including first-party, second-party, and third-party data, to help advertisers refine their targeting strategies.
They are also a part of a real-time bidding (RTB) process, which lets advertisers bid on ad inventory in real time. Ad exchanges play an important role here by aggregating publisher inventory and making auctions for ad placements easier. DSPs connect to these ad exchanges to gain access to multiple publishers and bid on ad space programmatically. Finally, DSPs offer reporting tools that show how well advertising campaigns are working, making real-time tweaks possible. This data-driven approach helps marketers achieve greater success.
Feature | Description |
User interface | Intuitive tools for campaign management and monitoring. |
Data management | Integration with DSPs for accurate audience targeting. |
Real-time bidding | Automated process for bidding on advertising inventory in real time. |
Reporting tools | Detailed analytics and reports for ad performance tracking and optimization. |
Want to learn more about DSP architecture? Explore our detailed white paper on real-time bidding and campaign reporting using Aerospike.
DSP’s core: Real-time bidding
DSPs work through a series of automated processes. The core mechanism involves RTB, where DSPs participate in auctions to bid on ad inventory. This process means ads are placed in front of the right audience at the right time.
RTB: DSPs automatically bid on ad impressions in real-time auctions, determining the value of each impression based on targeting criteria.
Ad inventory access: DSPs connect to multiple ad exchanges, gaining access to a wide range of ad inventory across various digital platforms.
Ad placement: Once a bid is won, the ad is placed on the publisher's site, reaching the targeted audience.
Optimization: DSPs use machine learning algorithms to determine the best ads and platforms based on real-time data.
DSPs help advertisers manage and execute complex ad campaigns efficiently. With RTB and targeting algorithms, DSPs deliver ads to the most relevant audiences to make the ad campaign more effective.
Role of ad servers
Ad servers work alongside DSPs to manage ad delivery, tracking, and reporting. While DSPs handle programmatic bidding and targeting, ad servers store ads, send them to the appropriate publisher sites, and collect real-time performance data (clicks, impressions, conversions). This two-way communication means DSPs have the most up-to-date campaign metrics to do a better job with future ad placements.
With RTB and targeting algorithms, DSPs deliver ads to the most relevant audiences to make the ad campaign more effective.
Ready to explore the future of advertising beyond DSPs? Dive into our latest insights on AI-driven personalization and the end of identity-based targeting.
Advantages for advertisers
DSPs offer advertisers several benefits. Automating buying ad space is more efficient, reducing the time and effort traditionally spent on negotiations and manual bookings. DSPs also help advertisers manage multiple ad exchanges and data exchanges through one interface, simplifying the workflow and using data to determine the most appropriate place to put an ad.
That’s where targeting comes in. DSPs use large amounts of data so advertisers can define specific targeting criteria, such as demographics, interests, and online behaviors, to ensure ads reach the audience most likely to buy the product or service, using ad dollars more effectively.
Finally, RTB means advertisers can make real-time decisions about purchasing ad inventory. This dynamic bidding process lets advertisers adjust their strategies quickly based on performance data, leading to more successful ad campaigns.
Overall, DSPs help advertisers be more efficient and precise, leading to more effective campaigns and better use of ad budgets.
Brand safety
One of the key concerns for advertisers is making sure their ads appear in places that don’t embarrass the company or make it look bad. DSPs often integrate tools and settings that allow advertisers to block or exclude certain types of content or publishers deemed inappropriate or non-compliant. By setting brand safety filters, DSPs help maintain a positive brand image and protect advertisers from the negative associations of appearing next to offensive or misleading content.
Fraud detection
DSPs also incorporate fraud detection measures to protect advertisers against invalid traffic, click fraud, and malicious bots. Through specialized tracking, suspicious activity monitoring, and partnerships with third-party verification vendors, DSPs help ensure ad budgets are spent effectively and only on genuine impressions.
Overall, DSPs help advertisers be more efficient and precise, leading to more effective campaigns and better use of ad budgets.
DSP vs. SSP
The other side of the digital ad ecosystem is supply-side platforms (SSPs). While DSPs help advertisers buy ads, SSPs help publishers sell their ad space more efficiently, helping them monetize by filling all the available ad inventory.
While DSPs use customer data to fine-tune audience segments, SSPs, as their name implies, focus on the supply side. They provide publishers with the tools to manage their ad slots, connect with multiple ad exchanges, and adjust pricing through automated auction processes.
DSPs are advertiser-centric, emphasizing demand and audience reach, while SSPs are publisher-centric, emphasizing supply and making money on the inventory. DSPs and SSPs collaborate within ad exchanges, removing friction from the buying and selling process and benefitting both advertisers and publishers.
Next steps
A DSP will receive up to tens of millions of bid requests per second, depending on the time of the year and their geographical market. A bid response is required in about 75 milliseconds, and the auction is complete (win or lose) in about 100 milliseconds. A DSP solution requires scalable, high throughput, low latency, and high availability hardware and software. It is designed to respond to each bid request at the best price based on the anonymous profile of the user interacting with the publisher.
Moreover, the scale of the store that holds user profiles is not trivial—it could hold billions of records, with each access to any record expected to have a latency of under one millisecond. Tens of millions of reads and writes occur every second of the day and every day of the year. The store must also be reliable because a user profile store outage for just an hour can cost a DSP hundreds of thousands of dollars in lost revenue.
So, operating a DSP at scale requires a database that offers sub-millisecond latencies and supports millions of operations per second without requiring a large amount of expensive in-memory storage in the process.