SSP and DSP: Key Components of Programmatic Advertising

The programmatic advertising ecosystem includes two key components: SSP (Supply-Side Platform) and DSP (Demand-Side Platform).

The entire programmatic advertising supply chain is based on a dynamic relationship between DSPs and SSPs. These platforms make buying targeted ads easier, monetizing digital media content, and managing ad inventory on a larger scale.

Here’s what advertisers and publishers should know about DSP and SSP solutions and their importance in programmatic advertising.

Supply Side Platform (SSP):

According to Global Supply Side Platform (SSP) Market Analysis and Global Forecast (2023-2033) with COVID Impact Analysis, ‘The global Supply Side Platform (SSP) market size is projected to reach approximately USD 117.32 Billion by 2033, at a CAGR of 13.36% from 2023 to 2033.

The supply-side platform (SSP) helps to sell ad impressions to a targeted audience at the best possible price. The SSB assists publishers in increasing their ROI by enabling them to sell on the best possible media sites.

After a publisher has configured the campaign settings, the sale process is automated using RTB or programmatic direct.

The SSP evaluates the requirements and sends a request to the DSPs/ad exchanges that manage the auction. An exchange also selects the highest bidding demand-side platform. Then, it sends a signal to the advertising server.

Here’s how they serve different purposes and are useful for various players in the advertising industry:

• Publishers: Publishers use SSPs to manage and sell available ad inventory.
• Inventory Management: SSPs help publishers organize and optimize their ad space across multiple digital channels, including websites, mobile apps, and connected devices.
• Ad Monetization: SSPs help publishers maximize their revenues. They connect publishers with multiple demand sources, such as DSPs and ad networks, for this purpose. They also provide the infrastructure for auctioning off ad impressions in real-time.
• Yield Optimization: SSPs use sophisticated algorithms to analyze available demand and calculate the best price per impression. This ensures that publishers receive the most revenue for their inventory.
• Ad Exchange Integration: SSPs work with ad exchanges as intermediaries between publishers and advertisers. This integration enables publishers to access various demand sources while advertisers can reach their target audience.
• Reporting and Analytics: SSPs help publishers understand their inventory performance. They showcase numbers in metrics such as impressions served, fill rates, and revenue generated. This data enables publisher to optimize their inventory and make informed decisions.

Demand Side Platform (DSP):

DSP functions as an inventory management tool. This software lets you buy ads at the best available rates and find the best advertising inventory.

According to the Global demand-side platform (DSP) industry research report, “The demand-side platform (DSP) market is anticipated to grow at a CAGR of 26.15%, reaching USD 64487.0 million by 2027.”

DSPs have disrupted media buying and introduced key innovations in the advertising and media buying process. Consolidating supply in a single platform that automates ad buying through real-time bidding increases transparency, accountability, and advertiser reach across publisher sites.

Users can purchase or bid on ad impressions with its assistance and display them to the intended audiences. Content publishers or business owners are responsible for competing in a bidding process.

Here’s how DSPs benefit advertising for different purposes:

• Advertisers: Advertisers and agencies use DSPs to manage and optimize digital advertising campaigns.
• Audience Targeting: DSPs enable advertisers to target specific audiences based on demographics, interests, and behavior. They allow precise audience segmentation and targeting, resulting in effective campaign delivery.
• Real-Time Bidding (RTB): DSPs compete in real-time auctions held by SSPs and ad exchanges for available ad impressions. This enables advertisers to compete for ad placements that meet their targeting criteria.
• Multiple Inventory Sources: DSPs work with various ad exchanges, SSPs, and other supply sources to provide access to a diverse range of advertising inventory. This enables advertisers to reach their target audience via multiple publishers and platforms.
• Campaign Management: DSPs enable advertisers to manage their campaigns, set budgets, define targeting parameters, and track real-time performance. Advertisers can optimize their campaigns using data insights and make changes as needed.
• Reporting and analytics: DSPs provide detailed campaign performance reports that include metrics such as impressions, clicks, conversions, and costs. This information enables advertisers to assess campaign effectiveness and make data-driven decisions.

How DSPs and SSPs Influence Ad Buying through Real-Time Bidding (RTB)

DSPs and SSPs serve distinct functions but interact constantly throughout the advertising supply chain. The most common examples are real-time bidding (RTB) auctions. These fill inventory within moments of a user initiating an ad impression.

Traditional static auctions bundle inventory into groups of 1,000 impressions. On the other hand, RTB auctions use a per-impression basis to maximize the revenue and return on each bid.

As part of an RTB auction, most DSPs and SSPs share supplementary data to help them make informed decisions. For example, SSPs may share user data with a DSP to ensure it accurately reflects a brand’s target audience.

Both platforms can share performance data, which advertisers and publishers can use to optimize future campaigns.

A Collaborative Approach

DSPs and SSPs help ensure brand safety and increase data transparency.

To that end, DSPs and SSPs provide tools to limit interactions with inappropriate content, such as blocking untrustworthy advertisers and deprioritizing low-quality channels.

Consolidation in digital advertising has led SSPs to invest in demand-based services for advertisers of late.  Some DSPs also experiment with publisher integration tools to avoid exchanges and sell inventory directly on their platforms.

Collaborations between DSPs and SSPs may extend far beyond bidding and brand safety in the coming years.

Conclusion:

SSPs and DSPs play distinct roles in the programmatic advertising ecosystem. SSPs allow publishers to monetize their inventory efficiently, whereas DSPs allow advertisers to target and deliver ads to the appropriate audience.

They work together to make buying and selling ad inventory easier in real time, allowing publishers to maximize revenue and advertisers to meet their marketing objectives.