What are the benefits and drawbacks of using a DSP?
Feb 04, 2020 - 3 min
Whether you’re representing a small business or are the CEO of a Fortune 500 company, you undoubtedly recognize that advertising is necessary for sustaining sales and achieving growth.
And, despite what you may have heard about the value of “owned media” or content marketing or growth hacking, when it comes to getting your message in front of your intended audience, digital advertising is unbeatable.
Today the ad tech market landscape is full of solutions providing brands and advertisers with various opportunities to access and grow traffic – and therefore attract more consumers. One of such solutions is a DSP – Demand-Side Platform. In this article we’ll take a closer look at how marketers and business owners can benefit from using DSP, and what modern DSPs are still lacking.
What is a Demand-Side Platform?
The Demand-Side Platform (DSP) stands for a technology that allows buying of online impressions from multiple traffic providers in real time. In other words, it’s a platform where users may promote their products, services, run performance, and attract new customers or leads.
For media buyers, the demand-side platform is a gateway to hundreds of traffic sources. DSP allows buying traffic from desktop and mobile websites, mobile apps, SSPs and ad exchanges through once interface. With only one DSP in a toolbox, the media buyer can reach its targeted audience through millions of touchpoints at a time.
Of course, benefits depend much on the capabilities of the very specific DSP. Still, there are things most DSPs have in common making them competitive comparing to other solutions from ad tech ecosystem, like ad exchanges or ad networks.
+ Consolidation of media buys
As I’ve mentioned above, DSP lets you put together various traffic sources and manage them from a single dashboard. Which means, you don’t have to negotiate individually with every single platform you want to serve your ads at. Instead, you just pick traffic sources from the numerous list and tight them up to your ad campaign.
A good DSP keeps enhancing the list of direct traffic providers and high-quality supply partners and controls over their quality to provide advertisers with wide and relevant traffic.
DSP aims to cut off the handiwork for most time-consuming operations and make media buying an automated and hassle-free process. It simplifies the daily routine of media buyers including mass copypasting, connecting to specific SSPs, the constant check of traffic performance, retargeting, report downloading, etc.
With the DSP, there is no need to do everyday optimization and babysitting daily performance reports. The platform defines the best-performing traffic sources and gives them a higher priority while blacklisting publishers with bad results. With the DSP everything is transparent: media buyer sets ad campaign goals and the platform ensures these goals are achieved.
While most ad networks continue to charge for thousands of impressions, DSP platforms allow you to buy impressions on platforms with high-quality audiences, so buyers do not overpay for empty traffic.
DSP is backed up by the real-time bidding technology. When buying traffic, the media buyer sets a unique bid for every ad and competes for the impression during a real-time auction.
Then a DSP purchases the impression that ideally matches the targeting parameters of the advertiser. With this approach, media buyers pay a fair price for the traffic, get cheaper inventory and achieve KPI targets.
The lack of transparency in the world of advertising had been a hot topic for ages but not for a DSP. You can understand how your ads are performing on different websites and different spaces within the website, precise and simultaneously.
As much as the benefits, the drawbacks may vary from one DSP to another. Here are several common things DSP may lack.
– Extra fees
The whole digital advertising industry strives to get rid of all kinds of intermediaries to achieve maximum transparency and cost-efficiency in ad budgets allocation. In 2019 we’ve seen several cases how major brands like P&G cut off cooperation with digital agencies and DSPs and take their media buying in-house. Partially, that’s for the reason, as a DSP takes its fee, whether it’s for using it as a platform or if the advertiser outsources media buying and ad optimization to DSP team.
Though the trend of taking media buying in-house is a topic to discuss, as this basically is not as savvy as it seems. High-quality media buying requiring resources in any case, a dedicated and competent team to cope with it, in particular. Will hiring best media buyers and adops managers cost you as a business owner less than outsourcing these services? That’s the question. Plus, if you’re an SME business owner, even another question arises – can you afford such in-house team?
– Limited inventory
The landscape of ad inventory is evolving fast following the customer experience trends. CTV, DOOH, dynamic, rich media, audio programmatic, and in-game ads are just a few trending items of 2019 to mention. Yet, most of brand new inventory, especially when it goes beyond almost traditional desktop and mobile require reliable supply partners plus sound technical integration support.
Far not all modern DSPs can offer such variety and advancement. It’s where advertisers have to explore the market to find the guys who can. On the other hand, DSPs that provide “boring” but high performing and hand-picked ad inventory can be a perfect match for small and medium business owners, who’re not looking for displaying their ads ad Superbowl for now.
– Multiple DSPs
But sometimes a single DSP is not enough for the advertisers, so they have to use multiple DSPs in order to execute their strategies. This case has two sides. The good one is that the advertiser gets the broader ad inventory offering
But the issue here also relates to inventory. DSPs often partner with the same supply providers and publishers, which causes … right, additional spending for the advertisers, as basically they bid with themselves for the inventory and in the end had to pay a higher price for it.
Whether a DSP platform is the very solution you’re looking for or you’re still doing your research to find what fits you best, we suggest to consider it, once your business scale.
Find out how how your business can benefit from using a DSP. Get in touch to book a demo tour.