What Are Demand-Side Platforms & How do They Work?

Advertising and the way companies buy and sell ad space has changed a lot over the years. It used to be a long and drawn-out process to negotiate ad space and sign contracts. However, with the help of Demand-Side Platforms (DSP) and Supply-Side Platforms (SSP), the way ads are run is now totally different. Let’s take a look at demand-side platforms and how they work.

What is a Demand-Side Platform?

There are now many avenues for advertising and knowing what each publisher has available can be tricky.

With demand-side publishing, companies can go to one marketplace and see what ad spaces are available. These spaces include search, mobile and video advertising.

This has an advantage over some companies such as Google that only have their own ads spaces available.

How Does DSP Work?

The process of DSP advertising uses something called ‘programmatic advertising’ which is the process of buying and selling ad spaces with the help of an algorithm.

When a website has inventory available, they can use the SSP to talk to advertisers and ask for bids.

The software will check the site and look for the best type of ads to place on it. This is used based on time of day, browsing history and IP address.

The advertisers use the DSP to offer bids, with the highest bid winning.

Why Do Companies Use a DSP?

There are many advantages to using a DPS for your advertising, and that is why many large companies spend so much on ads. These are some of the most common reasons:

  • With a DSP, you can often get far more data about a particular demographic than you can with just one provider. Some DSPs also allow third party data to be used as well.
  • For companies that are managing ad campaigns over many areas, this type of platform is ideal. Because they can all be reached from one dashboard, it increases efficiency.
  • The high amount of data used in these DSPs means there is a more focused result which can mean higher conversion.

Apart from some significant investment, using DSPs for advertising is an easy and straightforward process.

Why Should Companies Consider DSPs?

If you are a company that wants to use advertising on streaming and video networks, then DSPs are one of the best ways to go.

Your own data on your demographics can be used along with the DSP algorithm to precisely target the customers you want.

With this approach, you can save a lot on advertising that isn’t reaching your target market. It also means a higher conversion rate for those that see your ads.

Conclusion

Thankfully, the days of placing ads that take weeks or months to arrange are now gone. With demand-side platforms you can now arrange advertising quickly and easily.

The big benefit is that small to medium sized companies can now get their ads on many platforms without having to spend too much of their budget. Plus the added benefit of more targeted results.

And there you have it – everything you need to know about demand-side platforms and how they work.