Mobile advertising is more challenging than ever.
Managing campaigns across multiple channels, targeting users, and addressing fraud while ensuring that every dollar spent delivers measurable ROI has become a headache for mobile app marketers.
Traditional ad-buying methods can be inefficient, leading to wasted ad spend and missed growth opportunities.
The solution? Demand-side platform (DSP).
Let’s understand what is a demand-side platform (DSP) and how it can solve these challenges and help you win the mobile marketing game.
What is a Demand Side Platform (DSP)?
A demand-side platform (DSP) is a programmatic advertising tool that enables advertisers to buy and manage digital ad inventory, such as video, mobile, search, and display ads, in an automated way. They create a link between advertisers and a wide range of publishers (app or website owners) by automating the ad-buying process.
DSPs ensure ads reach the most relevant users at the right time. This way, advertisers can drive traffic while publishers monetize their space efficiently. DSPs thus mutually benefit the advertisers and publishers and help improve ad performance and return on investment (ROI). No wonder, the demand-side platform marketing will hit $114.51 billion by 2030 at a CAGR of 23.9%.
What Are the Key Components Of a Demand Side Platform?
Now that you’ve understood what a demand-side platform is, let’s look at its main components. Here are the key requirements to build a demand-side platform architecture.
- Bidder: The bidder is the core of the DSP. It is responsible for placing bids on ad impressions during the real-time bidding (RTB) process. Since RTB happens in milliseconds, speed is crucial. Most DSPs use multiple global data centers to reduce delays. They also rely on analytics to predict impression bids based on historical data.
- Ad Server: The ad server of the DSPs serves the required ad elements for the publisher’s website. However, that’s not all it does. Ad servers also track the impression and conversion data, which can be used to optimize the ad campaign. They have fraud prevention functionality and can detect false ad inventory. A demand-side ad platform can have its server or integrate with an external one.
- Campaign Tracker and Reporting: A key element of a DSP is the ability to track and record data about ad effectiveness. For instance, it can track impressions, ad viewability, clicks, CTR, conversions, ad spends, etc. This is then presented on a reporting dashboard and used in the ad campaign optimization.
- User Profiling: DSPs record user data when they view an ad served by the DSP. They build a profile of the user, allowing them to assign them certain characteristics and place them in an audience segment based on the type of content they are consuming, where, and which ads they are clicking on. The user profile database is used in remarketing campaigns and ad optimization.
- Budget Manager: This element in DSPs serves as the banker or the cashier. It allows the advertiser to define the budget parameters of the campaign. For instance, it allows them to define a maximum budget for the campaign. Besides, the budget manager can define rules about how the budget is spent.
- Integrations: DSPs connect with ad exchanges and SSPs to access advertising space. Besides, they integrate with other tools to increase their functionality, like data management platforms, analytics platforms, payment gateways, and brand safety solutions. This enhances the risk management capabilities of the DSP.
- Ad Exchange and SSP Integration: A DSP connects with multiple ad exchanges and supply-side platforms (SSPs) to streamline and centralize ad-buying. This integration allows advertisers to access a range of ad inventory across various channels through a single platform. As a result, advertisers can expect their DSP to offer seamless connectivity with multiple supply sources, ensuring cross-channel reach and improved efficiency.
How Do Demand Side Platforms Work?
As mentioned in the demand-side platform definition, it replaces manual ad-buying with automated, real-time bidding (RTB) software. Here’s how it works.
- The advertiser should select their target audience and upload the ads for publication.
- Publishers make their ad space available on DSPs through ad exchanges and supply-side platforms.
- These platforms share the ad impression with the DSP, which decides if it meets the targeting criteria and places a bid.
- Advertisers then compete by bidding for the impression in real-time.
- If the DSP wins, it buys the impression, and the ad appears on the publisher’s website.
This process happens in milliseconds when someone visits the publisher’s site.
Here’s a quick demand-side platform example to consider.
A mobile game developer targeting Android users aged 18-30 who play casual games can upload a video ad to promote their new game.
Publishers, such as gaming apps or mobile websites, list their ad space on DSPs through ad exchanges and supply-side platforms. Now, when the target audience visits the app or website, the DSP checks the ad impression to see if it meets the targeting criteria, such as device type, demographics, or behavior.
If it’s a match, the DSP places a bid for the ad space, competing with other advertisers. If the game developer’s bid wins, the ad is shown to the user in real-time.
Types of Demand-Side Platforms
Here are the three main types of demand-side platforms.
Self-Serve DSPs
A self-serve DSP allows advertisers to manage the ad-buying process independently. Once subscribing to the platform, they can upload creatives, place bids on multiple ad exchanges, and optimize their campaigns. This allows them to take complete control, broad audience reach, and lower costs since there are no third-party fees.
White-Label DSPs
A white-label DSP offers the same control as a self-serve platform but goes a step further by allowing customization. Instead of subscribing, advertisers purchase the platform as a blank slate to tailor to their needs. For instance, advertisers can create programmatic algorithms for ad placements or integrate with multiple ad exchanges and SSPs to diversify audience and traffic sources.
Full-Service DSPs
A full-service DSP offers a more hands-off solution to advertisers who lack the resources to manage campaigns in-house or prefer to focus on creative work. This approach is similar to working with an agency, where an account manager and dedicated team oversee the campaign from start to finish. While it comes at a higher cost, it provides convenience and expert support.
How Does Targeting Work in a DSP?
There are several ways advertisers can run targeted ad campaigns using a DSP with the help of the right data.
For example, an advertiser might target users based on data like:
- Behavioral Data: This comprises information about the user’s actions and interests, such as the websites they’ve visited, products they’ve bought, or ads they’ve interacted with.
- Contextual Data: This comprises information about the websites or apps, including their URL, categories, and content.
- Demographic Data: This includes information like users’ location, age, job title, and gender.
But how does a DSP get this data?
Behavioral and demographic data can be imported from a third-party data broker or data management platform (DMP), which collects data from both online and offline sources. The DSP syncs cookies with the DMP to exchange user data for targeting purposes.
Contextual data or user agent data (such as browser type, device ID, or operating system) is provided during the bid request from ad exchanges or SSPs.
DSP vs. Other Advertising Platforms
Here’s a quick demand-side platform comparison with other advertising platforms like ad networks, supply-side platforms (SSPs), and social media ads. It will give more clarity on what is a demand-side platform and how it differs from other platforms.
Top 5 Benefits of Demand Side Platforms (DSPs)
Now that we have explained what is demand-side platform advertising in detail, let’s see its key benefits. Here are the top five benefits of demand-side platforms (DSPs).
- Streamlined Process: DSP allows ad buyers to streamline the process via centralized software rather than juggling multiple salespeople, contracts, and spreadsheets.
- Time and Money Saving: DSPs can speed up ad-buying, saving time and money. Besides, their advanced optimization features ensure that advertisers don’t make poor decisions and waste money on ineffective campaigns or channels.
- Wide Audience Reach: DSPs connect to multiple ad exchanges at once, thus providing access to various ad inventories, including channels like CTV advertising, premium publisher websites, etc. This allows advertisers to choose the best ad placements to reach the target market.
- Powerful Data and Optimization: DSPs offer detailed analytics and reporting tools, allowing advertisers to monitor campaign performance and make adjustments.
- Advanced Targeting and Control: With DSPs, advertisers can customize settings like when ads are shown, how often they appear to a user, or which channels to avoid, ensuring precision in formats like CTV and in-app advertising for improved results. This advanced targeting approach gives them complete control over the campaign’s performance.
Expand Your Reach and Optimize Campaigns with Apptrove
Did you know? Ad spending wasted because of invalid traffic crossed $72 billion in 2024.
A demand-side platform (DSP), a programmatic advertising tool, makes it easy to reach the right audience by automating the ad-buying process. It helps you get more out of your ad spend by targeting users precisely and optimizing campaigns in real-time.
Apptrove’s partner ecosystem, including programmatic advertising (DSPs), ensures seamless integration with top platforms for optimized campaigns.
Here’s what you get –
- Optimized Campaigns: Work with leading agencies, programmatic media platforms (DSPs), and ad networks to ensure your campaigns target the right audience.
- Comprehensive Integrations: Connect with affiliate networks, analytics platforms, data management platforms, DSPs, and more for an all-inclusive mobile marketing strategy that covers every stage of your customer’s journey.
- Advanced Targeting: Use data-driven insights from programmatic advertising platforms (DSPs) and Facebook marketing partners to optimize your targeting and retargeting strategies, thus ensuring maximum reach and conversion.
- Fraud Protection: Apptrove offers fraud detection solutions to secure your campaigns from misattributions and fraudulent activity. We ensure your marketing spend is well-directed and safe.
- Marketing Automation and Influencer Collaborations: Boost your brand visibility and engagement by leveraging marketing automation tools and collaborating with influencers for targeted campaigns that drive meaningful outcomes.
Bottom Line
A demand-side platform (DSP) can be a game-changer for the advertising ecosystem. It automates the ad buying process, reduces wasted ad spend, and helps reach the right audience more effectively than traditional methods.
This means your campaigns can deliver better results seamlessly, as shared in this post. Moreover, partnering with a reliable demand-side platform provider like Apptrove can help you gain access to the right tools that improve your ad strategy, provide real-time insights, and protect against fraud.
Ready to boost your ad performance? Connect with our team today!