How does… DSP, SSP and DMP work?

The digital industry loves a good acronym. And we certainly have plenty of them.  

Demand side platforms (DSP), supply side platforms (SSP) and data management platforms (DMP) are all integral to the digital advertising process. They operate together to enable the automated buying and selling of advertising, but perform very different functions.

So, if you can’t tell your DSP from your SSP and DMPs, then read on.

DSP

A demand-side platform (DSP) is a piece of software used to purchase advertising (display, native, video, mobile, social and search ads. in an automated way). It is called ‘demand-side’ as the people that use a DSP need (or demand) ads, hence it is used by brands and the agencies that represent them.

A DSP allows advertisers to buy inventory across a range of publisher sites, targeted to individual user behaviour, action, demographic, location, or previous online activity.

Publishers make ad inventory available through ad exchanges, and DSPs aggregate these exchanges and automatically decide which impressions make sense for an advertiser to buy.

Roughly speaking, DSPs provide an automated version that ‘traditional’ ad networks historically provided, including access to inventory and targeting – but also lets advertisers easily optimise campaigns.

DMP

A data management platform (DMP) is a piece of software that collects first, second, and third-party data and then organises it to help marketers get better marketing results. It’s usually used to help target and segment audiences to improve marketing results.

Theoretically, a DMP could manage all sorts of information and data but in practice it is used to collect and manage web browser cookies.

Users select sets of cookies with desired attributes (interests, demographics and behaviours) and send them to advertising platforms to deliver ads against those cookies when they appear on a site. A DSP (above) will buy advertising based on information provided by a DMP.

SSP

A supply-side platform (SSP) is a piece of software that allows a publisher to sell digital ad impressions via automated auctions. It is called ‘supply-side’ as the people that use a SSP supply the ‘space’ (or inventory) for the ad to appear on, so it is used by publishers (or anyone that produces content on a platform that a digital ad can be placed on).

If you are thinking that it sounds a lot like a DSP then you’re right; basically, it is the publisher’s version. SSPs allow a publisher to connect to a huge range of potential buyers by connecting inventory to DSPs via an ad exchange. Publishers are able to manage inventory, revenue and sell through to try and achieve the highest cost (or CPM) for their ads.

Publishers can also set price floors (the minimum price a publisher will accept for an impression), create guaranteed deals and define a wide range of very simple rules around which advertisers or buyers can (and cannot) purchase their inventory and at what minimum price. 

How do they work together?

A brand will have all of its audience data as it relates to strategy (targeting) organised in a DMP. Once the brand decides who it wants to target with a particular ad campaign, it will feed this information into a DSP, which will connect to an SSP.

The SSP offers various options to reach the desired audience at different prices, and the DSP will automatically determine what is the most appropriate purchase to reach the intended audience (based on the information for the campaign contained in the DMP) at the best price.

When the brand (via the DSP) is happy with the price and inventory on offer by the publisher (via the SSP), the exchange takes place and the ad is purchased and delivered.

Kamani Krishnan is director of regulatory affairs, IAB Australia.

If you are looking to purchase ad technology, including a DSP, DMP, SSP make sure you do your homework and ask the right questions to ensure you get the best solution for your individual needs. A good place to start is the IAB’s Advertising Technology Purchase Guidelines which you can download  here.