What is a Demand Side Platform?

What is a Demand Side Platform?


A demand side platform forms the basis for programmatic advertising. You need to know about this topic. […]

More and more marketers, whether in-house or agency-side, rely on automated media purchasing. The use of a demand side platform (DSP) is a basic prerequisite for programmatic advertising of one’s own advertising in the digital environment.

A demand side platform is a technology platform that automates the purchase of advertising space and inventory and makes it efficient through the use of algorithms. Simply put, companies have the opportunity to compare the prices of online advertising space on different marketplaces via a DSP. Once the decision has been made for a specific advertising space, DSP initiates participation in a real-time bidding (Real Time Bidding) initiated by a supply Side Platform and purchases the space from the respective provider.

DSPs process massive amounts of data in a very short time and sort the advertising market for their users on the basis of defined criteria. They are used by advertising companies to optimize the purchasing of inventory and to use the available data specifically for campaign success.
The goal is to place advertising displays only where it makes the most sense to reach the target group.

There are countless providers of DSPs on the Adtech market. Are most relevant for the German market:

  • Active Agent,
  • Adform,
  • Display & amp; Video 360,
  • MediaMath,
  • The Trade Desk and
  • Xandr (AppNexus).

While the basic functionality is always the same, the individual technologies differ mainly in terms of their focus. Depending on which goals marketers pursue, not every technology is suitable to the same extent.

Before choosing the technology, it is important to clearly define the goals of your campaign. It is as much about the question of the target group as about the question of the costs. But other factors also play a role.

  • Budget: The budget to be calculated does not only refer to the specific purchase of advertising spaces, but must also cover the technical costs, i.e. the costs for the use of the respective platform. The smaller the overall budget, the more these platform fees and sometimes data processing fees are important.
  • Duration of the campaign: The duration of the campaign does not affect the choice of the platform. For companies that want to test in advance whether a form of online marketing is the right one, some providers have test licenses in their portfolio. Within a test period, the technology can be tried out without committing to a longer period of time. If the duration of the campaign is adjusted to this period, time can therefore be a relevant factor in the selection. In certain setups, technologies can also be compared in live operation.
  • KPI: DSPs support the advertising company by means of reporting to achieve the set goals. Depending on the provider, different evaluation options are available, which differ in the amount of data and in the depth of the insights. Some technologies rely on third-party providers to evaluate the data and thus make the desired goals measurable. Goals can be, for example, increasing the visibility of the company (branding campaign), or a concrete call-to-action (performance campaign).
  • Defining target groups: The fundamental success factor of a Programmatic campaign is addressing the right target group. The offer of the target group segments varies depending on the provider of the Demand Side Platform. The offer differs depending on the available data on the one hand and the possibilities to integrate your own first-party data on the other hand.

Part of the question about the right target groups that can be reached via a technology are also the environments that the respective providers have focused on. Examples are:

  • Target groups in digital television
  • Target groups Audio area
  • Target groups in classic display purchasing.

Whether an international or national target group is to be reached is also relevant here. The choice of environments is closely linked to the agreed objectives.

Not every format or inventory can be played equally well via every DSP. Some providers have integrated various special formats, some rely on the classic formats and thus offer less leeway. Depending on how unusual the planned advertising media should be, this factor must therefore be included. However, there is the possibility to additionally book access to an ad server in order to have access to the whole range of advertising media and additional options in delivery.

The advantages and disadvantages of the individual technologies cannot be defined at a flat rate; rather, they go hand-in-hand with the set goals, the own variety of data and the set budget. No solution can cover all needs at once. A prioritization of the goals must therefore be made. A thorough preparatory outstaffing work as well as the obtaining of various offers and extensive information is elementary.

* Christoph Berg is co – founder and managing director of the strategy and technology consultants for data-driven marketing MINT Square.

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