Understanding the Role of DSPs and SSPs in Programmatic Advertising.

It’s marketing technology at its finest.

Programmatic advertising is a form of automated digital marketing which enables ads to be purchased or sold in real time through automated technological systems. This process requires demand-side platforms (DSPs) and supply-side platforms (SSPs). I want to explain how these two entities work together to make programmatic advertising profitable in a way that makes sense to people unfamiliar with the digital marketing world.

If you want the briefest version of the explanation without any details, scroll to the photo at the bottom of this article. But, here is a more detailed and concise version that you may understand:

Demand Side Platforms (DSPs) are online systems used by advertisers (companies) and agencies to buy ad impressions from various sources. Through data analytics, user profiles, and targeted bidding strategies, DSPs provide an efficient way for marketers to purchase ad space. Additionally, DSPs enable companies to target specific demographics with their campaigns based on location, age, gender and other factors.

On the other hand, Supply Side Platforms (SSPs) act as middlemen between publishers and advertisers (companies). They allow publishers to access a wide variety of potential buyers from a single interface while also providing them with demographic information about their respective audiences. This data helps publishers better monetize their inventory by allowing them to accurately price and package their ads according to consumer preferences.

It is important to understand who publishers are and who advertisers are.

In the context of digital marketing, publishers are usually websites that produce content such as articles or videos. Examples of publishers include news sites, media outlets and other online content providers. By using an SSP, these publishers can manage and optimize the sale of their ad inventory to a wide variety of potential buyers. This allows them to accurately price and package their ads according to consumer preferences, thereby helping them maximize their potential earnings from each sale.

Advertisers are companies promoting their products or services on a publisher’s website. Advertisers typically pay either per impression (CPM) or on a cost-per-click basis (CPC).

Through SSPs, these advertisers can access a wide variety of potential publishers while also being able to target specific audiences through demographic data. This helps them reach their desired audience more efficiently and effectively, thereby providing them with a better return on investment.

The relationship between DSPs and SSPs can be thought of as a marketplace:

DSPs provide marketers or companies with the means to purchase targeted advertising space, while SSPs give publishers the tools to maximize their potential earnings from each sale.

Together, they make programmatic advertising more efficient while helping buyers and sellers optimize profits at every stage.

If none of that made sense to you, here is how I would explain
it to my grandmother.

The megaphone is the company that wants to advertise. They purchase the media through a DSP, which uses software to be able to target your customers. The SSP publishes that company’s ad in the desired channels.

Some forms of programmatic advertising are display ads, mobile ads, and audio (podcasts) and video (OTT/CTV) streaming ads.

In essence, this process allows for more accurate targeting of your audience with less time and effort involved and greater efficiency in terms of cost.

If you want to know how I can provide a DSP/SSP for no agency costs, please get in touch with me via Linkedin, and I will connect you with the right people.

If you want to support my writing career, you can donate to my Venmo (username: David-Zosel). 

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