If you are new to programmatic, all those three-letter acronyms might be a bit confusing. In this article, we will explain what supply- and demand-side platforms are, what they are used for and by whom, as well as the advantages they bring, and how they fit within the ad tech ecosystem.
What is an SSP?
Supply-side platform, sell-side platform, or SSP, is a piece of software that is designed to help publishers monetize their ad space programmatically. They connect publishers to multiple ad exchanges, ad networks, and DSPs at the same time, thus increasing the number of bidders for their inventory and boosting yield. SSPs allow publishers to set price floors, determine rules for their inventory, create direct deals, collect and analyze campaign data.
One of the main advantages of using an SSP is the better data that publishers get access to. Information such as which bidders participate in the auctions, what your best placements are in terms of profitability, can be used for improved yield optimization. Audience data analytics can help enhance targeting and package inventory to negotiate better deals with advertisers.
Another important aspect of using an SSP is the granularity of control that publishers get over their inventory. Setting price floors for specific buyers and/or channels, blocking certain advertisers, or allowing only selected buyers to a specific portion of your ad inventory are just some of the options available to publishers.
Last but not least, the possibility to get so many ad exchanges, networks, and DSPs to simultaneously bid for your inventory ultimately boosts competition and contributes to better rates for publishers at the end of the day. SSPs allow for more efficient inventory and relationship management to optimize publisher ad revenue.
What is a DSP?
Demand-side platforms, or DSPs, are at the other side of the ad tech chain. They allow advertisers, agencies, and buyers to efficiently place bids on ad inventory in real-time and simultaneously across multiple ad exchanges, optimizing their ad spend. DSPs allow bidders a set of controls to effectively manage and optimize their ad campaigns, set bid and budget caps, define targeting and campaign goals. They also provide advertisers with granular data on campaign performance, audiences, and advanced user interaction statistics.
One of the main advantages of DSPs for advertisers is that they allow for better campaign management and audience targeting. The platform provides granular target parameters for buyers to select from and build a user profile that matches their needs. Furthermore, the real-time data on campaign performance allows advertisers to monitor and optimize whenever necessary.
Similar to SSPs who connect publishers with more buyers, DSPs provide advertisers with access to a wider pool of ad inventory. This allows them to optimize their spending and still reach the right audience.
Last but not least, the automated process of finding the right inventory and bidding for it saves buyers a lot of time and effort and allows advertisers to focus on campaign strategy. However, we should also mention that managing a DSP does have its complexities and goes through a learning curve for those who decide to go down this road.
How do they work together?
So how do SSPs and DSPs fit in the advertising ecosystem? Here’s how the process works. Advertisers design their ad campaigns and set them up within a DSP of their choice. They enter the targeting criteria and all other details of the campaign. The DSP searches for users that match the buyer’s requirements by contacting multiple ad exchanges. When a user lands on a web page, their data, to the extent allowed by their cookie preferences, is collected by the browser. The SSP forwards the user information to the ad exchanges, which in turn contact the DSPs looking for an audience with matching criteria. The ad exchange holds the auction and selects the winning bid, taking into account the price floors set by the publisher. DSPs bid on behalf of the advertiser based on their budget and bid settings. The winning creative is served on the webpage within milliseconds of the user landing on the page.
SSPs and DSPs are similar technologies but used for different purposes. However, they both help automate the otherwise laborious process of ad space selling, make it more efficient, and rid of human errors and bias. SSPs in particular, have a huge added value for publishers as they help them manage programmatically their relationships with multiple ad networks, agencies, and buyers in a more efficient and straightforward way.