What is DSP? What is DMP? And what is SSP? All these terms ending with “P” are so quite confusing! Do you want to know what are these platforms used for? If you’re new to the digital advertising industry, you might be unfamiliar with these terms. Let Groundhog Technologies be your tutor this time!
The annual event showcasing Google Marketing Live in May 2023, focusing on AI and leveraging the opportunity about conducting generative AI to their own products and advertising service. Apart from the synergy, the digital advertising ecosystem has a long history of these platforms to accelerate either advertisers or publishers advertising the bidding transactions.
Bidding is an essential term in the digital advertising industry, besides the bid price also affects the campaign performance.
We can regard this bidding process as the supply and demand model of economic equilibrium. First of all, The demand side includes advertisers and demand-side platforms (DSP); secondary, serving as the exchange broker called ad exchanges; thirdly, the supply side includes supply-side platforms (SSP) and publishers. These parties are all connected, we’ll introduce each roleplay in this industry thoroughly:
Demand Side
1. Advertiser
Generally speaking, buyers who purchase ad placements, such as brands, media agencies, and app publishers seek app downloads. They aim to display ads through various channels to increase exposure.
2. Demand-Side Platform, DSP
Also known as self-serve advertising platforms, DSPs allow advertisers to set campaign objectives, budgets, target audiences, and choose publishers. DSPs utilize the Open Real-Time Bidding (Open RTB) mechanism for real-time bidding transactions. Examples of DSP platforms include Groundhog Technologies’ MI-DSP™ and The Trade Desk.
AI drives advertising transactions in DSPs. For example, using the Interactive Advertising Bureau (IAB) standard, millions of ad transaction requests (Bid Requests) are processed within milliseconds. Programmatic buying enables real-time, optimized, and automatic transactions based on traffic.
Let’s talk about how AI drives advertising transactions. Taking the Interactive Advertising Bureau (IAB) standard as an example, there are millions of ad transaction requests (Bid Requests) within 200 milliseconds (ms). You can imagine that if all these transactions are processing manually, it would be exhausting.
Programmatic buying helps to achieve real-time, optimized, and automatic transactions.
Programmatic buying refers to the use of the automatic bidding system to buy and sell ad placements based on traffic.
The supply side must provide a content-type HTTP header, and it must comply with the IAB OpenRTB specification. The ads you see on any device are rendered by browsers and sent to Ad networks.
The ML model will keep revising the bidding strategy and behavior based on the performance of ad network services, utilizing AI and machine learning technologies to enhance advertising effectiveness.
3. Data Management Platform (DMP)
To find the ideal target audience, advertisers use DMPs in conjunction with DSPs. DMPs analyze user behavior data by combining first-party, second-party, and third-party data to create user profiles. This helps advertisers achieve precise marketing and effectively utilize programmatic buying. MI-DMP™ by Presentech combines data from Indosat Ooredoo Hutchison, a major Indonesian telecom company, to provide suitable audience segmentation for Indonesian advertisers.
Agent
4. Ad Exchange
An intermediary auction platform that facilitates transactions between DSPs and Supply-Side Platforms (SSPs). Ad exchanges use the OpenRTB mechanism to compare bids and quality scores from different DSPs and determine the winning bid. Ad exchanges offer more transparency than ad networks due to the visibility of the win price. Examples include Authorized Buyer, Smaato, and OpenX. If you’re still unclear about the whole picture, let’s dive into the following scenario!
First of all, when a user visits the website, the SSP, acting as the media supply side will send a signal to the ad exchange, providing the floor price for each ad placement. Meanwhile, the ad exchange, acting as the intermediary informs various DSPs about this ad placement demand. Once the DSPs receive the bid floor, they’ll participate in the bidding process on the ad exchange. The transaction will be processed within 200 milliseconds. The renowned ad exchanges include Authorized Buyer, Smaato, OpenX, etc.
Supply-side
5. Supply-Side Platform, SSP
SSPs are technology platforms that coordinate publishers and media owners to manage their ad inventory. They serve as hosts for ad placements from various publishers and media outlets, helping them monetize traffic and maximize profits. SSPs provide efficient ad placement management and transactions, enabling cost-effective display ads without empty ad placement loads.
6. Ad Network
Ad Network refers to the intermediary role between publishers and advertisers in the online Ad Networks act as intermediaries between publishers and advertisers in the online media industry. They acquire ad inventory from publishers and provide services like ad management and data analysis to advertisers. Ad networks connect numerous publishers through advertising alliances. Examples include Google Adsense and Google Ad Manager.
7. Publisher
Publishers own advertising placements, which can include media websites, YouTube, Google, and high-quality blogs. Publishers aim to generate benefits by placing ads on their websites or apps, while also offering exposure opportunities for brands and advertisers.
After introducing the major roles in the digital advertising ecosystem, do you have a better concept of its uniqueness and workflow? Programmatic buying technology benefits advertisers and online media by providing an automated transaction method that saves operation and time costs. It automatically matches suitable ad content with ad placements, enabling the entire advertising system to operate more efficiently.
8. IAB Tech Lab
The IAB Tech Lab, an international organization has become more authoritative in advertising The IAB Tech Lab is an international organization that promotes the growth of the digital advertising industry. It establishes international standards and provides legal support for online advertising. Its members consist of advertisers, advertising agencies, ad tech providers, media companies, data companies, and more. Major international companies like Google, Facebook, and Amazon are among its members.
The digital advertising ecosystem involves various roles and workflows, with programmatic buying technology benefiting advertisers and online media through automated transactions that save operational and time costs. It enables efficient matching of ad content with ad placements, making the advertising system more efficient.
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