Digital advertising involves many time-consuming tasks such as Ad bidding and purchasing and that’s where Demand-side platforms (DSPs) work as an alternative to streamlining advertising management campaigns for many businesses.
In this read, we will delve into the complexities of why DSPs matter. and how they work. Also, learn about Social Media Marketing Tips For Small Businesses with this guide.
DSPs collect and analyze large volumes of anonymized data about the behavior of users of Internet resources. They use algorithms and machine learning technologies to determine which users are potentially interested in ads on a certain topic.
After analyzing the data, the platform selects the most suitable audience, as well as the optimal time and place to publish a video, banner, or ad. It automatically purchases placement sites through SSP and Ad Exchange and then displays advertising to the target audience.
DSPs combine all the tools that work with different platforms or sites to display advertising. Their main task is to purchase and display ads at the optimal price per advertiser request. They can work with different types of advertising – banners, videos, creatives in mobile applications, and native integrations.
DSPs purchase advertising through a special real-time auction called RTB. The system starts bidding between advertisers and compares their bids to determine who will receive the right to display.
The task of the ads management system is to calculate the optimal price for an ad, and then place a bid on time, literally in a second – at an auction, everything happens very quickly. The advertiser who offers the best bid gets the opportunity to display their ad.
To understand how users interact with advertising, the platform analyzes cookies. This helps users more precisely target ad impressions. The customer analyzes the results, selects the target audience he wants to attract, and allocates a budget for each impression.
DSP has 5 options for target audience search:
Hypothetically, a marketer or traffic manager can do this manually – analyze the results of an advertising campaign, change the target, and calculate the bid. In a small company, the amount of work may be insignificant; a small business can easily do without a predictor.
In media holdings and companies with an extensive product line, manual data processing requires too much time and money. And despite all the investments, you will have to take into account the human factor and the likelihood of error.
Here’s how using a DSP can help a business:
Did You Know?
According to Market Study Report LLC, the demand-side platform market will increase its annual revenue from $9.7 billion in 2019 to $31.3 billion in 2024.
Finding an ad management system across all the different tools can be challenging, especially if this is your first time using a DSP (demand-side platform).
Here are the criteria you should focus on when choosing:
One of the most important parameters when choosing a DSP (demand-side platform) is the sources of information to which the system has access.
For conclusions about the target audience to be objective, the algorithm must process a large amount of data about consumer behavior and their significant characteristics. Age, gender, family, financial situation, location, and interests are taken into account.
It is important to comply with the requirements of the law on the confidentiality of personal data. Therefore, first of all, it is worth considering systems that process arrays of aggregated data.
DSPs enable real-time market participants to effectively compete for advertising inventory. DSP algorithms automatically optimize bids and select the best opportunities to serve your ads, ensuring the best balance between price and impression quality.
If you consider DSP development as a profitable business idea, we recommend contacting SmartyAds, which offers white-label DSP.