As real time bidding (RTB) and programmatic advertising become more popular than ever before with digital marketing professionals of all stripes for buying and selling, it helps to understand the key players in programmatic buying. With programmatic now becoming the default for digital advertising and media buying in many parts of the world (programmatic ad spending is expected to grow even in 2020, according to eMarketer), it’s critical to marketers to understand how it works and who is involved in getting an ad from an advertiser in front of their target audiences across different websites or apps.
Understanding the Demand Side: DSPs and ATDs
A demand side platform (DSP) is an interface for marketers to buy ads programmatically. DSPs connect to multiple exchanges so that their clients, agencies and advertisers, can find maximum reach and scale. They also connect to other technology platforms that enable more advanced targeting, measurement and creative solutions for the advertisers.
Some of the most popular DSPs include InMobi DSP, The Trade Desk, Google DV360, MediaMath, Centro and Liftoff, among many others. Some DSPs are omnichannel DSPs that can be used across a variety of mediums like mobile, browsers, CTV, etc. while others are niche DSPs designed just to focus on one or a smaller number of options. Check out this video for a more detailed breakdown of omnichannel and niche DSPs.
The choice of DSP is the single biggest factor in deciding what controls the media buyers have for running their campaigns. Advertisers and agencies choose a DSP based on multiple reasons that include ease of operability, inventory scale and audience reach, data and targeting options, and controls for fraud, brand safety and transparency, among other reasons.
Sometimes, depending on who is involved, an agency trading desk (ATD) may be involved in the transaction. Forrester has previously defined ATDs as “A centralized, service-based organization that serves as a managed service layer, typically on top of a licensed demand-side platform (DSP) and other audience buying technologies; manages programmatic, bid-based media and audience buying. Works as an agency’s internal ‘center of excellence,’ supporting agency teams wishing to tap into this new buying model on behalf of agency clients.”
A data management platform (DMP) is a technology platform that collects and organizes audience data from multiple sources and allows advertisers run ads against these audiences. DMPs are therefore an important link between advertisers and DSPs.
Advertisers choose to work with DMPs based on their reach and scale of user data, their data accuracy, and the sources of data they are integrated with. Oracle, Salesforce, Adobe, Nielsen, The Trade Desk and many others have DMP offerings.
What are SSPs and Ad Exchanges?
Originally, a supply side platform (SSP) would serve as the aggregator on the supply side, while exchanges were platforms that conducted auctions and facilitated transactions. As the ecosystem evolved, their roles merged, and now the programmatic industry often uses the two terms, SSP and exchange, almost interchangeably.
Some of the most popular SSPs and ad exchanges include InMobi Exchange, Index Exchange, The Rubicon Project and many others. Some of these, like InMobi Exchange, are just in app, while others offer slightly broader supply.
SSPs work with multiple publishers on the supply side to help them monetize their available ad inventory, but their primary customers are the DSPs, who in turn work with agencies and advertisers. This is the case even for private marketplace deals and not just for open exchange buying. In the mobile in-app space, these SSP connections occur most often through an SDK.
Ad servers, which Google has previously defined simply as “a platform that serves ads,” typically sits in this middle layer in between the demand side and the supply side. But that is not always the case, as ad serving can be managed through the agency, the DSP, the SSP, etc.
Both publishers and DSPs consider various factors in working with an SSP. A publisher will work with an SSP for monetization reasons like demand density and better pricing. Similarly, a DSP will choose an SSP based on their reach and scale with publishers, their performance, the platforms they support, and the level of trust and transparency they enable, among other reasons.
It’s also important to differentiate between ad networks and ad exchanges. While the terms are too often used interchangeably, they are not the same thing.
In short, ad exchanges are open exchanges where buying and selling can occur, while ad networks facilitate programmatic transactions on a more manual basis. An ad exchange is kind of like a public square where vendors can peddle their wares, while an ad network is like a professional buyer and that makes a transaction happen within the wider environment.
In many ways, ad network is a dated term, with SSPs and exchanges replacing the ad network of old. Ad networks were especially popular in the days of static display advertising on desktop, but are no longer as useful in today’s omnichannel world.
Understanding the Supply Side
Let’s talk about mediation platforms first. Mediation platforms let publishers integrate with multiple exchanges and SSPs using a single software platform. In the mobile in-app space, some of the most popular mediation platforms include MAX from Applovin and MoPub, but there are many others.
Mediation platforms connect to SSPs and exchanges on the demand side, but their primary customers are the publishers. They help publishers manage, optimize and report on impressions, ad revenue and other important metrics – all in one interface.
Publishers are their customers, and publishers choose a mediation platform based on various factors like how efficient their monetization algorithms are, how diverse the demand is they support, how advanced their reporting capabilities are, and how easy they are to operate, among other factors.
How The Key Players in Programmatic Buying Work Together
How do these various platforms all work in tandem with one another to facilitate a programmatic transaction? Here’s a quick, basic overview:
Using a DSP, a marketer/advertiser kickstarts a campaign by allocating budget, inputting ad creatives, etc. Data from the DMP ensures that the campaign is targeting the right audiences for the brand and the campaign’s specific goals.
- When someone opens a website in their browser, the publisher and/or app developer will send along data about the upcoming available advertising opportunities.
- The SSP matches information from the publisher end with data from the DSP, passing along bids when relevant.
- An ad is selected and shown to the user depending on the results of the programmatic ad auction that occurs at the publisher/mediation level.
How The Programmatic Ecosystem Might Change in the Future
While DSPs, DMPs, SSPs, etc. are the main players in the programmatic advertising ecosystem now, that very well may change going forward. In particular, two main trends may alter the landscape in the coming months and years.
For one, supply path optimization (SPO) is becoming more commonly implemented by many leading digital advertisers and agencies. At a very basic level, SPO involves reviewing and auditing the path that advertisers use to reach their target consumers on digital channels. Who is involved in all possible transactions, and what role do they play in ensuring the best possible advertising experience?
One possible outcome from a wider SPO implementation is an overall decrease in the number of programmatic platforms working in the marketplace. This is especially the case on the supply side, as SSPs and ad exchanges in particular that don’t provide unique supply/ad inventory or other distinct benefits may find themselves on the SPO chopping block.
Another key trend to keep an eye on in the programmatic space is the ongoing evolution of consumer privacy and identity. Between legal frameworks like CCPA and GDPR and industry pushes like Apple’s depreciation of IDFA, not only is the amount of consumer data available to advertisers and marketers likely to drop in the future, but how data can be leveraged will be impacted too.
As a result of the shifts, the role and functionality of a DMP will likely have to shift accordingly. In addition, the value propositions that DSPs, SSP and mediation platforms will change as less and less consumer data is available.
Of course, none of these trends impact what the vast majority of these programmatic key players do or how they help advertisers and publishers. But as the ecosystem evolves, everyone across the programmatic supply chain needs to adapt accordingly.