Demand-Side Platforms: How I Learned to Stop Worrying and Start Loving Display Advertising
According to ZenithOptiMedia, online display advertising is slated to rise by 20% per year in 2013/2014. This increase is large – even by online advertising standards, where aggregate annual growth rates remain at double-digit levels. What is contributing to this growth in online display advertising – a channel that not so long ago was perceived as a laggard in the online advertising world? The answer is as easy as D-S-P, or Demand-Side-Platforms.
What are Demand-Side Platforms, or DSPs? In a nutshell, DSPs allow you to programmatically bid in real-time on display placements across millions of websites. Why is programmatic, real-time bidding (RTB) so important for marketers? Bidding in this way allows you to automatically focus your impressions, clicks and, ultimately, marketing spend on the websites that are most profitable for your business based on your website goals. These website goals can be anything from an ecommerce transaction, to filling out a lead generation form to visiting a specific page on your site. This is good news for marketers, as the days of paying one website thousands of dollars per month with no guarantee of results appear to be coming to an end.
How do DSPs work? Matt Hunter did a great job of illustrating how DSPs fit into the Online Display landscape (see image below from his SlideShare on the topic). Starting at the bottom of the display food chain, small websites that do not have salesman to shop their ad space and large websites that have extra (or ‘remnant’) ad inventory sell this space to Ad Networks, such as Google’s Display Network. Ad Networks then sell this inventory on Ad Exchanges, such as the Doubleclick Ad Exchange (also owned by Google). It’s important to note that two or more Ad Exchanges may be buying advertising on the same Ad Network and the same websites. The DSP sits at the top of this pyramid as the platform used to bid on advertising within these Ad Exchanges, serve display ads if the bid is won and optimize/report on the results. Some of the top DSP platforms include MediaMath, Turn and Invite Media.
The advantages of using a DSP are many, but here are a few of my favourites:
- Continuous ad improvement: Most DSPs allow for literally hundreds of ad creative to be served to users, so a champion/challenger ad test is always happening. Even better, the winner can be decided based on your business goals, not just click through rate (CTR%).
- Integration with Retargeting: Most DSPs also offer retargeting (called remarketing by Google) through the Ad Exchanges they purchase from. This essentially unites online display and retargeting, allowing true cross-channel optimization through shared cookies.
- Expanded Reach and Cost Savings: DSPs are the easiest way to purchase from multiple Ad Exchanges which may hit different Ad Networks/websites. Also, if two Ad Exchanges are selling the same inventory at a different cost, the DSP will allow you to purchase from the lowest cost exchange.
Need to get a handle on your online display campaign? We can help you construct an integrated strategy and also give you our two-cents as to whether a DSP might be a good fit for your company.