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How does DSP, SSP work?

More and more marketers prefer using advertising exchanges to buy and sell advert space. It is connected with the fact that such mediators are able to make the process easy and fast compared to the traditional way of ad buying. In the article, we will answer all the questions concerning the work of ad exchange and the related platforms.

General principles of ad exchange work

Every advert exchange is a third-party resource, which connects publishers and advertisers. Thus, they can offer the advert inventory and make bids on the offers, which correspond to their requirements. For the functioning of any advert exchange, the following platforms are required:

 

  • supply-side platform

     

  • demand-side platform.

 

The first one is created for publishers, while the second one is for advertisers. They work on different servers and are not connected with each other. With the help of them, marketers access the advert exchange. The latest is responsible for users’ information gathering, analyzing the offers and bids, selection of the best bidders, etc.

 

The whole trading process is automated as it is based on programmatic advertising. The system includes the organization of online auctions, which happen in real time. Thus, advertisers and publishers are provided with a timesaving tool, which guarantees transparency, profitability, and efficiency.

What is a supply-side platform?

A supply-side platform is a sell-side platform, which is used by publishers for effective control of their inventory. It allows making the price of each impression as advantageous for publishers as possible. Besides, there are lots of useful tools, which allow controlling the advert space available, which are:

 

  • selection of a minimal CPM (as a result, there are low risks to sell the inventory at too low prices)

     

  • selection of styles and formats of ads

     

  • selection of preferable locations of materials on the webpage

     

  • blockage of inappropriate content (which might be annoying or unacceptable by the visitors)

     

  • selection of hints, fonts, and other features for multiple adverts.

     

SSP provides opportunities for hosting the transactions, managing advert space, docking online trading platform, etc. Publishers can sell not only their premium but also remnant inventory at a higher price.

 

Consider the key benefits of SSPs for publishers:

 

  • a significant amount of data for advanced control of the inventory

     

  • minimal human involvement

     

  • higher profit from advert space selling

     

  • access to intelligent delivery.

The essence of a demand-side platform

Demand-side platforms for advertisers are an alternative for SSPs. They are applied by independent advertisers and agencies allowing them purchasing various types of advert space for the placement of their materials (for the promotion of products or services). With the help of DSP, advertisers can access a large number of publishers. Thus, they have a chance to select the best location for their adverts in accordance with their requirements concerning a target audience, advert type, etc.

 

DSPs open more opportunities for more precise targeting considering demographic features, behavior, interests, browsing history, activity, social status, and other characteristics of the users. Thanks to the application of a demand-side platform, advertisers also can:

 

  • set up their budget pacing options

     

  • retarget the audience (by means of the application of several ad exchanges)

     

  • avoid placing the advertising materials on inappropriate sites (there is a blacklist to block such resources)

     

  • limit the number of times an advert is shown on a definite site.

 

Besides, it is possible to buy a premium advert space at a more reasonable price compared to the situation, when a traditional way of purchasing is used. Moreover, the whole advertising process becomes more efficient because of the better targeting and other features of DSP and advert exchanges.

DSP and SSP cooperation

The process of their work looks as follows:

 

  • a publisher makes an ad space available through SSP

     

  • an ad exchange collects the information about the visitors of the website and sends a bid request to DSP

     

  • DSP analyses it and decides whether it is acceptable

     

  • DSP sends the maximum bid to an AE

     

  • an AE selects the best bidder.

     

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