In the modern fast-paced high-tech world, it is tough to believe that ad sales were once conducted via human sales representatives that often would negotiate placements and prices face-to-face or on the telephone. Over the years, these transactions have become increasingly automated, and the current in-app advertising landscape is currently ruled by technology platforms that use real time bidding to complete transactions in only 200 milliseconds.
Due to the complexity of the real time bidding process, there are several diverse platforms in play in completing these transactions. In a previous blog post, we clarified the difference between SSPs and ad networks. Today, we’ll look at the differences between supply-side platforms (SSPs) and demand-side platforms (DSPs).
Let’s start by defining these two functions in the in-app advertising supply chain.
What’s an SSP?
A supply-side platform (SSP) is a programmatic technology platform which connects directly to electronic publishers. In the event of in-app advertising, this would consist of app developers and businesses that have their own apps.
SSPs enable these publishers to auction off their inventory, fill it with the winning buyer’s creative, and earn revenue. The objective of the SSP is to maximize their publishers’ ad earnings (eCPM) and fill rate. The SSP accomplishes this by making publisher inventory available to a variety of buyers, such as DSPs, ad networks, ad exchanges, agencies, or even directly to advertisers.
A demand-side platform (DSP) allows buyers of electronic ad inventory to manage multiple ad exchanges via one interface. These buyers commonly consist of trading desks, agencies, or advertisers directly.
To enable these buyers to bid on electronic inventory, the DSP has to plug into an SSP. This programmatic advertising supply chain is visualized in the graphic below.
Another initialism that often causes confusion along the programmatic supply series are data management platforms (DMP). DMPs serve as warehouses of data where the wide range of activity happening across DSPs, ad networks, and exchanges can be tied together in one centralized location. Ad buyers can then use this data to optimize their future purchasing decisions and creatives.
A DMP is just utilized to compile, store, and analyze data. DSPs then use that information to actually buy ad inventory. DMPs may also connect to SSPs, by way of example, to enable publishers to optimize their eCPMs and fill rates. In this way, a DSP, SSP, and DMP can all work together along the programmatic supply chain to serve an ad.
DSPs, SSPs, and DMPs are all integral players into the in-app advertising world. By operating together, they enable the automated selling and buying of digital ad inventory on a scale never before possible. While many different configurations between these three players are possible, they each serve a unique function that has shaped today’s in-app advertising ecosystem.