One of the most profound shifts brought about in the marketing landscape is the shift of advertiser preferences from traditional television screens and billboards to the internet. With USD 124.6 Billion spent on internet advertising in 2019 alone, the internet is today bigger than any other form of media where advertising occurs. Of course, the pandemic brought extensive lockdowns and a further increase in consumer preference for online experiences.
However, rapid growth can prove to be a cluttered experience for genuine customers who get bombarded with ads from different companies trying to flood them with reasonable-sounding pieces of information and brand messages.
This was a problem that companies too understood and felt the need to solve at the earliest. A promising solution in this space is Demand Side Platforms or DSPs that created one part of the foundation of programmatic advertising, with Supply Side Platforms forming the remaining half.
So, what exactly, is a DSP?
In simple terms, a DSP is a software or platform that advertisers rely on to purchase ads in multiple formats from an ad marketplace where ad publishers list their inventory. The ads may be in the form of banners, search, mobile search specific, or in video format. The platform allows advertisers to manage real-time ad targeting across multiple bidding networks. Along with supply-side platforms, DSP’s form the core of programmatic advertising wherein ads are targeted to visitors on publishing networks based on context. This context is evaluated and established by an intelligent algorithm-driven system, and ad placements are awarded to the most suitable bidder from the list of brands that have queued up for bidding in real-time. The bidding, too, is driven by software, and hence the human interference in the entire process is minimal.
When a potential customer or lead lands on a publisher web page, the algorithms on the page calculate the visitor’s score or suitability based on parameters like IP address, past browsing history, time of the day, and other relevant information. It then places the brand or company’s ad that has placed the highest bid for the particular visitor impression in real-time.
The DSP market size has grown considerably over the past few years. By 2026, it is estimated that the market size of Demand Side Platforms will grow to over USD 6 Billion, with a phenomenal annual growth rate in the range of 31.3% during the 2021 to 2026 period.
How does DSP make internet advertising more exciting or a rewarding experience for advertisers and consumers? Or in other words, why is there so much buzz around Demand Side Platforms? The answer lies in the benefits it can offer. Let’s examine the top 5
With DSP, brands have an option to publish their ads across different channels in real-time with accurate insights on the availability of their target audience for their ads. This real-time bidding capability allows brands to focus on customer data that is the most recent available, thereby increasing chances of conversion.
Better Data for Targeting
DSPs offer a large volume of data from across channels through partnerships they have with 3rd party data providers. This enables advertisers to focus on personalizing their campaigns as much as possible. In an age where first-party data is becoming even more crucial in these strategies, brands can also import data from their own respective CRM or data and marketing management platforms for more reach.
Ad Inventory Management
With a DSP, it becomes easier for advertisers to manage a large inventory of ads across different channels, platforms, and exchanges rather than be stuck with only one channel as determined by powerful ad networks from giants like Google and Facebook. Through a single interface, advertisers can manage the purchase and sale of ad inventory and support the increase in the number of devices selected for the ad publishing. By allowing all ads to be managed from a single platform, efficiency levels will be considerably high for advertisers.
By leveraging DSP, advertisers can get real-time insights and reports on their ad campaigns across different channels. Real-time data on the performance of ads across target segments, customers, or geographies can help determine the effectiveness of event-specific campaigns that are measured on their ability to convert leads to deals. The lessons learned can be used to optimize future campaigns and improve their success rates significantly.
Improves Ad Spend Efficiency
With DSP, advertisers have insights on the traffic impressions that have the most likely chance of converting to a deal through ads. With this information, it becomes easier for traditional firms to budget their campaign efforts and ensure that they pay only for targeting the right audience rather than shooting in the dark. Once a brand purchases a relevant placement or ad space, it can help customers use AI and ML-enabled contextual and behavioral lead analysis to determine the position’s worth.
Demand Supply Platforms have made a significant change in how digital ads are collated from ad exchanges and published to high-quality publishing websites. DSPs use intelligent algorithms to evaluate and finalize customers before rolling out a highly personalized ad. This allows brands to quickly capitalize on recent market trends and roll out the right content to the right audience at the right time. This is helping brands achieve the dual objectives of customer reach and efficient budget control.