July 27, 2018
What is a DSP? Should you use it? Is it cost-effective to build your own DSP? How do you choose a good third-party solution? We've compiled a list of the most common questions advertisers have about DSPs. You'll also learn about how such a platform can help your business.
Long gone are the days when a user saw a multitude of irrelevant ads due to the poor targeting options (GEO,
age, gender and basic interests were the only options available). Media buying evolved into audience buying:
every business aims at getting the most relevant audience at the lowest price possible.
However, with this evolution, buying via third-party companies became risky: non-transparent deals resulted in the increase of fraudulent traffic. And that's when DSPs came to the scene.
DSP is a technology platform that gives RTB access to multiple sources of inventory and allows the option to buy relevant audience programmatically. Instead of putting ads anywhere, DSPs decide which impressions are most valuable for your campaign. You need a DSP when you operate with decent traffic volumes and want total control over bidding and campaign management, all while tracking the best possible advertising opportunities within one platform.
Through SSP, a publisher transfers impressions to ad exchanges. The latter passes it to a DSP, which then
evaluates the impression according to the targeting settings, cookie matching, and pricing.
If the impression is valuable (the visitor falls under target audience settings), a DSP would bid on this
"Bid on the impression" means submitting the highest price that the advertiser is ready to pay for showcasing an ad in front of that user. With RTB technology, there's no need to negotiate prices with the publishers, as all of this is done automatically. Among hundreds of DSP bids the impression with the highest bid will be chosen by SSP for ad display. All this process is done in a mere milliseconds.
Even with the rapidly changing digital advertising landscape and enormous competition, there are numerous people on Quora saying "Want to build something amazing - build it by yourself". I found two issues worth taking into account BEFORE starting the DSP development process.
After the rise of header bidding, the amount of available impressions increased drastically and even large DSPs and SSPs had troubles evaluating and deduplicating them. DSPs need to reduce processed ad impressions and pick the most transparent traffic from publishers that could be duplicated across all exchanges. Newborn DSPs have trouble getting exclusive traffic: SSPs usually send all their bids to the bigger DSPs, while those DSPs who spend $5 000- $20 000/mo don't see as many impressions.
High Initial Investmentse
The main components of a DSP are as a bidder, ad server and data platform. They require different skill sets and investments. A small competitor research on Cruncbase can show you how much money a DSP raised at its first year of existence. Be sure to calculate the cost of servers, investments required for building a platform, maintenance costs, etc.
If you pay a large commission to the DSP provider, it would be reasonable to not think about building your own in-house DSP platform from scratch, but rather to find an alternative with a White Labeling option.
White Label DSP means that you can use a fully developed solution, and customize it to your advertising needs: colors, theme, brand identity, and other tailored features. Customization requires minimum capital investment, therefore you may concentrate on your marketing goals and advertising campaigns, rather than on developing your own solution. White Label DSP is bug-free as it has already been tested in real-time. You can connect to multiple SSPs, increase your traffic volume and optimize your campaigns through a single platform, without any intermediaries. White Label DSPs in 99% of cases come with total transparency as you control the sources where your traffic is coming from.
Here is the short list of White Label DSPs available on the market:
Evaluate them while keeping the key features in mind. Also, stick to the solution that is simple, matches
your media buying needs, and has no hidden fees.
The reason why DSPs have gained so much popularity is that they allow both ad networks and agencies to get the best advertising opportunities while keeping full control of their budgets.
Fraud. The main problem here is not in the DSPs per se, but in the large amounts of fraudulent traffic sold by publishers. Bot farms, ad spoofing and injectors are just a few of the most common ways to falsify traffic.
DSP Consolidation. Due to a recent study by Pathmatics, advertisers cut the usage of DSPs from seven to four DSPs per month. As marketers put more focus on reaching the right audience, it becomes difficult to coordinate multiple platforms as it maximizes the possibility of bidding against oneself.
According to Adexchanger, agencies cut off non-transparent DSPs by a huge margin while pushing for more transparent and closer working relationships with preferred partners.
The right DSP will give you the needed organization and convenience in managing your campaign amidst a very competitive and ever-changing environment.
Want to enhance your media buying with White Label DSP? Drop us a line and we'll be glad to help.