A demand-side platform is a system that allows buyers of digital advertising inventory to manage multiple ad exchange and data exchange accounts through one interface. Real-time bidding for displaying online advertising takes place within the ad exchanges, and by utilizing a DSP, marketers can manage their bids for the banners and the pricing for the data that they are layering on to target their audiences. Much like Paid Search, using DSPs allows users to optimize based on set Key Performance Indicators such as effective cost per click, and effective cost per action. DSPs incorporate many of the facets previously offered by advertising networks, such as wide access to inventory and vertical and lateral targeting, with the ability to serve ads, real-time bid on ads, track the ads, and optimize. This is all kept within one interface which creates a unique opportunity for advertisers to truly control and maximize the impact of their ads. The sophistication of the level of detail that can be tracked by DSPs is increasing, including frequency information, multiple forms of rich media ads, and some video metrics. Many third parties are integrating with DSPs to provide better tracking. In addition, DSPs have begun to use advanced price reduction algorithms, commonly known as bid shading, to help advertisers procure ad impressions for a lower CPM in the first-price auction. DSPs are commonly used for retargeting, as it is able to see a large volume of inventory in order to recognize an ad call with a user that an advertiser is trying to reach. The percentage of bids that are won over the bids that were submitted is called a win rate.
Types of programmatic buys
Preferred Deal: No auction, set CPM, non-guaranteed inventory
Programmatic Guaranteed: No auction, set CPM, guaranteed inventory
Private Marketplace :Real time bidding, price floor, select group of advertisers
Open Exchange Buy: Real time bidding, variable CPM, open to all advertisers
Features of a Demand Side Platform{{Cite web|title=Demand Side Platform (DSP): A Simple Explanation RevX|url=https://revx.io/blog/demand-side-platform/|last=|first=|date=|website=|language=en-US|url-status=live|archive-url=|archive-date=|access-date=2020-05-06}}
Campaign Management: Campaign management allows advertisers to track campaign performance conveniently. When a campaign is run with different ad exchanges, the availability of a holistic campaign within the DSP helps the advertiser make the right and timely decisions.
Audience Targeting Options:Competitive markets and tight budgets mean that advertisers have to be accurate in choosing their target audience. The more DSP offers the option to target the audience, the better it is for ad performance.
Bidding Strategies: Even though DSP automates decisions, bids, and purchases in real-time, there is a lot advertisers can control with the bidding strategies. Different options can train a DSP that's powered by Machine-Learning to bid better and access vast numbers of available impressions.
Real-time Analytics: As online advertising is highly dependent on data and real-time decisions, it is essential to remain aware of ad performance with real-time analysis. It helps advertisers make moment-based marketing decisions to scale campaigns and gain higher Returns on Ad Spend.
Access to Premium Inventory: One of the most crucial functions of the Demand Side Platform to avail the relevant inventory on which quality users are likely to engage. Access to premium inventory is available for DSP when they have partnered with leading ad exchanges.
Creative Support:Utilization of different ad formats and creatives can be a significant contributor to ad performance. With creative support available within DSP, advertisers can see how ads will appear on different platforms to the users.
