The digital ad industry has streamlined the buying/selling of advertising space over time. It has consolidated supply and demand on networks and ad exchanges. Today, both publishers and marketers can reach each other with relative ease and increase their revenues thanks to two types of advertising software — SSPs and DSPs.
To understand the differences and similarities between these two, we should start by defining each term.
Supply-Side Platform vs Demand-Side Platform: Are These Two Terms Different?
The demand-side platform (DSP) is an app designed for programmatic media-buying to assist marketing experts with purchasing relevant impressions on the internet. It allows for the targeting audiences of different revenue levels, ages, and gender. DSPs assess inventory based on the chosen features and bid on the relevant ad impressions.
The popular demand-side technologies are SmartyAds, Criteo, Adform, StackAdapt, The trade desk, Centro, etc.
An SSP is how website owners sell their ad impressions to multiple advertisement exchanges and DSPs. DSPs, in their turn, stand for the quick and cheap processes of searching for the right audience and evaluating it. The process takes place in real-time in the blink of an eye, and participants do not have to waste time negotiating costs.
The popular supply-side technologies are Google Ad Manager, Open X, Rubicon Project, Pubmatic, One by AOL, AppNexus, etc.
The demand-side platform represents the “purchaser (advertiser) aspect” of media buying; the supply-side platform stands for the “seller (publisher) side.” To understand the difference between these two terms, let’s focus on each of them in more detail. We will elaborate on how exactly DSPs and SSPs work.
Working of a Demand-Side Platform
DSP serves as an inventory-gathering tool. This software makes it possible to buy ads at the best available rates and find the top advertisement inventory. With its help, users can buy or bid on ad impressions and show them to the intended audiences. It is the job of content publishers or business owners to compete with other participants in a bidding process.
A DSP consists of two sub-processes — real-time bidding (RTB) and programmatic direct. Using RTB, it is possible to specify a target audience and the budget you are ready to spend before an auction begins. Then, a participant displays an advertisement to a potential buyer who lands on their page. While loading, the special algorithm detects an ad that would be the best fit for the potential buyer with the help of their browsing history, IP address, and more. Just like in any auction, the user with the highest bid wins the ad placement. The commercial becomes visible after the page finishes loading.
Once the specific inventory wins the RTB auction, the advertisement is submitted to the supply-side platform (SSP). The highest bidder’s offer is shown on the publisher’s application or site.
The second sub-process ensures that advertisements are displayed only in particular places. A publisher can supply detailed info about ads’ visitors to boost visibility.
The inventory for sale on a DSP is classified by certain features. For example, DSPs make it possible to concentrate on the right formats and pick among different banners or native advertising proposals. Users can also focus on particular market niches or premium inventory.
The DSP market has all the chances to achieve 26.3 percent CAGR in revenue with the global market size forecasted to hit $31.3 billion by 2024.
The Working of a Supply-Side Platform
The supply-side platform (SSP) helps publishers boost their ROI by selling ad impressions to a target audience at the best cost possible. Just after a publisher configures the campaign settings, the process of sale is automated with RTB or programmatic direct. The SSP assesses requirements and submits a request to DSPs/ad exchanges that run the auction. An exchange also determines the highest bidding demand-side platform. Then, it submits a signal to the ad server. The offer of the winning party is served to the viewer.
Besides that, a SSP also offers such benefits as automation of all processes, higher yields because of the greater pool of potential buyers, full control over inventory, and the availability of valuable information to monitor a website. Besides, SSPs generate certain figures in reports for content publishers. The reports contain such information as what is a median bid, how every item on sale performs, and who the bidder is.
So, the supply-side platform is somewhat a website owners’ equivalent of the demand-side platform. These two belong to the same ad marketplace, but they work on opposite sides of a transaction.
How Do These Two Work Together?
The process of interaction between SSP and DSP platforms looks this way:
- A participant goes to a website.
- The chosen software submits a request to advertisement exchanges and networks via the SSP, which offers info about the request. Those parameters include age, gender, geolocation, and preferences.
- After the brand determines the audience to target with a certain ad campaign, this data is fed via the DMP into a DSP. In its turn, the DMP refers to a data management service. Thanks to it, brands can save all the information in a single safe place. That is how agencies can call upon DMP and apply it during any advertising campaign.
- The system transfers bid requests to DSPs. Software then verifies the user’s information and decides what would be the most effective deal to reach a target audience.
- The highest bid from the suggested choices wins the auction.
- The system obtains ads from the winner and displays them to the target user. Real-time bidding assists in the process by loading the targeted advertisement immediately.
What’s the Difference between DSP and SSP: A Summary
These are the main differences between DSPs and SSPs:
- DSP — is applied by marketers.
- SSP — is applied by publishers.
- DSP — makes it possible for marketers to purchase ad impressions from exchanges and networks for the most affordable fee.
- SSP — allows content publishers to offer advertising impressions for the best price available.
- DSP — This software collects information about users and places a bid on behalf of the marketing experts (buyers). DSPs provide various buying approaches, just like cost per thousand (CPM).
- SSP — It connects publishers with numerous demand-side platforms.
Now, you can contrast DSPs and SSPs and see the primary differences. Let’s summarize the main points in a table for your convenience:
|Primary goal||Assists advertisers with finding and buying relevant ad placements.||Allows publishers to sell and control inventory.|
|Function within the programmatic ecosystem||“Demand” or purchase.||“Supply” or sell.|
|How it works||Connects marketers with numerous SSPs, networks, and exchanges. Makes it possible to purchase ad impressions and show customizable advertisements with certain features.||Auto-offers inventory to numerous services such as DSPs, exchanges, and ad companies. Profitability goes up and everyone achieves a win-win situation.|
So, to sum up, these online platforms for publishers and advertisers are at the opposite end of the programmatic media-buying spectrum. The first one makes it possible to monetize publishers’ traffic to decide on the best rate via RTB. As for the SSPs, they assist advertising experts with buying inventory they need and managing ad campaigns from any place in the world. Both DSPs and SSPs reduce the risk of publishers underselling their inventory.