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Sep 13, 2021 - 0 Minutes read

How does the demand-side platform work?

It was not always so easy to buy ads online as it is today. With the advancement of technology now it is possible to optimize your ads very quickly. While buying ad space it is necessary to make sure that you are paying the right price and targeting the correct platform. 

One of the gifts of modern digital advertising is demand-side platforms. It has made it easy for advertisers to find the perfect ad space to run ads on without having to do any of the heavy lifting. It is very efficient and saves a lot of time and effort while increasing the odds for a better ROI.

What is a demand-side platform?

In simple words, a demand-side platform can be defined as a marketplace for advertisers to buy ad space conveniently. It is a very essential element in programmatic advertising which uses technology to make it possible to automate the whole buying and selling of ad space.

When we are talking about a demand-side platform, it is very important to also understand what a supply-side platform is. A supply-side platform is almost similar to a DSP, except it is for publishers who want to rent their ad space to marketers.

Together a DSP and an SSP with the help of AI and real-time bidding makes it possible to make the whole buying and selling of ad space so easy for both advertisers and publishers. A DSP unlocks all new possibilities for an advertiser as because of this new technology, it is now easier to minimize the risk of running ads by ensuring better audience targeting and ads optimization.

What is the importance of a demand-side platform?

One of the most crucial advantages of demand-side platforms is that the process is simple and efficient. Now advertisers don't have to manually contact thousands of publishers and determine the best one. A DSP can do this task for the advertisers so they can focus on other aspects of the business. 

The whole process is automated which removes the chances of an error. It is also possible to optimize a campaign within a short time which is often important in the world of advertisement. 

The performance can be monitored in real-time in a DSP making it much efficient than other means of online advertisement. You would have access to all the essential data and analytics that would help you optimize your campaign instantly. 

Instead of days, you can view the results of your ad campaigns in hours allowing you to take action fast in case the campaign is not going according to your plan. You can use the data later to better optimize the ad campaign for the next time.

You can specifically target the device and the time for your ideal audience. You can choose when the first time ads would be shown to your audience and on which device. Depending on the type of advertisement, you can have more success running an ad on mobile devices rather than for desktops and vice versa. 

Working Procedure of a DSP

The way a DSP works is complicated but we can simply say that a DSP has its inventory of a collection of platforms that has a list of suppliers willing to rent their website, mobile apps, and other digital ad space. This feature of a DSP allows advertisers to know the best platforms to run their ads on just by using one platform.

Before the invention of programmatic advertising, advertisers had to open ad manager accounts on Google, Facebook, Amazon, and other platforms separately. Now it is possible to manage everything from one place and also they offer advertisers cross-platform media buying.

The first step for an advertiser would be to identify their target audience and upload their advertisement to the platform. DSP runs a search on different SSPs and finds suitable platforms to run ads and then offers a bid to buy the ad space. Advertisers compete with each other in this step and the highest bidder wins. The ad is then finally published on the platform and within hours the advertiser can see how the ad is performing using various analytics.

Various Components of a DSP

Many components are responsible for a DSP to function so well. Not all companies use similar elements but we have included the most commonly used components in our list.

⦁ Ad Server

The primary task of an ad server is to create ads, store them, and later it is used to roll out the ads in the publishing platform. It is one of the most vital parts of a DSP. Not all DSPs have their ad server in which case they use external ad servers from a third party.

It is possible to get amazing analytics from a DSP because of an ad server. They manage and track ad impressions and also prevent any fraudulent ad clicks.

⦁ Bidder

Real-time bidding is conducted through a bidder which is arguably the most crucial element in a DSP. The bidding is completed within milliseconds which makes it crucial that the bidder performs at its best. Most DSPs use multiple bidders simultaneously to minimize risks. They also track previous records of the ad impressions and how well they performed before placing a bid.

⦁ Integration systems

A DSP has to connect with SSPs and other third-party software to perform at its optimum level. They need to be able to be integrated with various payment gateways, data management platforms, analytics, and tracking software which enables them to provide advanced services to the advertiser.

Most companies work on three phrases when it comes to integration. Research, development, and testing are three very important stages that finally lead to successful integration.

⦁ Campaign Tracker

It is very important to know how an ad campaign is performing for the advertisers to take immediate action. A campaign tracker is used by a DSP to record impressions, spends, clicks, and other data. One of the most important parts of the campaign tracker is a reporting dashboard. The data is recorded there and is displayed to the advertiser.

⦁ User Profiling

DSPs collect user data to make it easier for an advertiser to show ads to their target audience. The ads viewed which are viewed by the user allow the DSP to profile them.

With time it becomes possible for DSP to understand certain characteristics of the user and assign them certain attributes. It is done by analyzing the type of content that draws the attention of the user.

⦁ User Interface

A DSP offers many different features to the advertiser which would be very difficult to execute if the user interface is not neat. The user interface contains all the data regarding the various campaigns and also allowing the advertisers the means to optimize their campaigns.

DSPs pay a lot of attention to make sure that the user interface is simple and easy to use while allowing access to the major features of a DSP from one location.

Want to start advertising with a DSP? 

A Demand-side platform is a very important part of programmatic advertising. If you are an advertiser looking to explore the world of programmatic advertising Bidtimize would be your safest bet. Bidtimize is a platform that uses AI and automation to connect advertisers and publishers.