Demand-Side Platforms Shaping the Future of Advertising

December 2, 2015 · Industry Developments

Demand-side platforms (DSPs) are the future of online digital advertising, why? Because they solve a pressing resource problem that plagues online advertisers. Traditionally, online advertising has been handled using a variety of systems, such as pay-per-click on Google and ads on high traffic websites such as Facebook, Bing and Instagram.

An issue arises, however, when people are managing many campaigns. Each campaign requires the same amount of resources to manage, meaning there are no economies of scale. In turn, this means the increase in resource requirements can end up out of control.

It’s Not the Same Old PPC

There are several pieces to the new technology. Programmatic display advertising refers to the use of computers to do buying and selling, a method that is highly targeted, scalable and trackable. This method of advertising is growing at a rate of 20 percent per year. A buyer can set limits on bid prices and network reach, for example, and the automated system will adjust ad placement based on a review of all the variables. The automated system can accomplish that task much faster and more accurately than a human being, leaving advertisers to focus their effort on being creative.

When programmatic buying is used to purchase ad inventory, Real-Time Bidding (RTB) is part of the process. That term refers to the ability to set parameters for the automated system, allowing it to place bids in real-time in an auction-type setting.

A Demand-Side Platform (DSP) is a system that allows buyers to use one computer interface to manage ad exchange and data exchange accounts. It’s much easier to use one interface to manage things that previously required multiple systems.

Advantages of Using a DSP

Extended Reach. Extended reach is especially important for those doing retargeting and contextual targeting. Using the Google Display Network, for example, an advertiser is limited to Google properties. With an extended reach, you’ll have access to a wider range of websites and impressions. DSPs take advantage of real-time bidding to reach far beyond one advertising platform. In addition, a DSP provides an unlimited opportunity for targeting the right market through the use of cookie data.

Efficiency. Using a DSP, you no longer need to negotiate with each publisher, send insertion orders or monitor an increasingly complex set of data. A single change can be made and then replicated for each publisher, saving time and resources.

Flexibility. Display buying is much easier, because you can see what is working and what isn’t in a day’s time rather than at the end of a campaign. The ability to analyze and respond to how ads are performing brings benefits in terms of flexibility and efficiency.

It’s a Win-Win for Everyone

The trend is obvious – DSPs are the future of digital advertising because they:

  • Allow you to get your ad out to your target market in the most effective and cost-efficient way
  • Save time and money, and give you a great deal of flexibility
  • Stretch your advertising dollars, allowing you to fine-tune campaigns on a real-time basis
  • Can handle many more transactions with much better information than a person can

There’s a benefit for everyone:

  • Agencies will find that they have more control over the outcomes of campaigns, which will translate into higher-quality service to their clients
  • Advertisers will see improved results and a higher return on investment
  • Publishers will get exposure to a larger number of buyers to help them increase their revenue

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