Ready to learn the inner workings of demand side platforms (DSPs)? These systems are an evolution of ad networks, which placed ads manually for mobile advertisers to market their apps to users. Today, DSPs automate this process using real-time bidding and algorithmic learning to work smarter, not harder, when it comes to running retargeting campaigns.

What is a Demand Side Platform (DSP)?

A demand side platform or DSP, is a system that allows marketers to buy digital advertising inventory across multiple ad exchanges via one interface. This enables advertisers and media buying agencies to bid automatically on display, video, mobile and search ad inventory from a wide range of publishers.

How Does a DSP Work?

DSPs use automated, real-time bidding (RTB) technology to serve ads. The whole process, which takes less than 200 milliseconds (quite literally, faster than the blink of an eye, which takes approximately 300 milliseconds), can be summarized in 5 basic steps:

  1. Publishers make their ad inventory available on the DSP through ad exchanges and supply-side platforms (SSPs).
  2. An advertiser segments their target audience and uploads the ads they want to publish.
  3. Publishers offer the ad impression to the DSP. The DSP bids to buy the impression based on relevance to the advertiser’s targeting criteria.
  4. The advertiser competes with other advertisers for the ad impression. Bids are placed in real-time.
  5. The DSP buys the impression and the ad is shown on the publisher’s mobile website or in their app.

Basically, DSPs facilitate the relationship between advertisers and publishers. They do this by providing the technology for advertisers to purchase impressions across a variety of different publisher sites.

The value of DSPs & advertising

DSPs automate the decision-making process on how much to bid for an ad in real-time. This makes the ad buying process significantly faster, cheaper and more efficient.

Expanded scale 

DPSs’ process of ad buying enhances the scale of your advertising campaigns. Rather than buying inventory from specific publishers, DSP advertising technology allows you to reach users across a range of publisher sites from one interface.

Of course, not all DSPs are created equal. As you’re evaluating your DSP partners, make sure they have a diverse range of supply partners that can provide you with access to different formats and apps for your ad campaigns. This shows their platform can optimize based on an expansive volume of data points. It also means the DSP has access to more auction outcome data and can calibrate more efficiently to market prices for different traffic components. Not only does this give you more opportunities to find your users across the mobile ecosystem, you also can buy ad space cost-effectively.

Efficient bidding

DSPs have sophisticated real time bidding (RTB) algorithms that allow them to purchase quality ad space at the most efficient price. Essentially, RTB standardizes and automates the buying and selling of ads between media buyers and sellers. This allows marketers to set up campaigns quickly and manage them with ease since they no longer have to spend time and energy on something that is automated. Using RTB, you can bid on an impression based on budget, value and targeting within milliseconds; all while a user is scrolling through an app.

Predictive bidding, conversion and click algorithms also enable DSPs to learn the market, and iterate over time. The more data an advertising DSP handles, the more intelligently it buys, securing the optimal price for subsequent bid requests. Sophisticated DSPs will also be able to use contextual data points — versus deterministic data points that rely on user IDs — to buy ad space intelligently in a privacy safe mobile ecosystem.

Advanced targeting

DSPs are equipped with advanced targeting functionality to serve ads to users based on factors you’re segmenting for. In the past, this wasn’t the case. Ad networks would restrict advertisers via their specific audience targeting features, limiting potential audience segments and advertisers’ reach.

On the other hand, DSPs give advertisers free range to create their own targeting criteria for their ads based on their segments. This might include targeting users based on operating system, activity window or creative type.

Intelligent reporting

Streamlined workflows and expanded scale means more data for advertisers to optimize on. DSPs can provide in-depth analytics to advertisers about the performance of their ad campaigns all from a consolidated dashboard. This gives advertisers more information with which to incrementally improve their campaigns.

More data also gives advertisers the ability to run valuable incremental lift tests to measure the effectiveness of their campaigns. The incrementality of a retargeting campaign measures the additive lift that the spend advertisers invested in re-engaging users contributed to their overall goal(s). It does this by creating a holdout or control group of users. This group does not see ads the way the test group of users do.

As you evaluate your DSP partners, make sure they can measure incremental lift on both a cohort level and within a specific window of time. This helps you understand how your retargeting campaigns are performing within a target group of users and also within a specific period of time.

Key Takeaways of Advertising & DSPs

DSPs are an evolution of ad networks that  facilitate the ad buying relationship between advertisers and publishers. They do this using automated, real-time bidding technology and algorithmic learning to help advertisers work smarter — not harder — when it comes to launching and optimizing retargeting campaigns.

  • Expanded scale. DPSs enhance the scale of advertisers’ retargeting campaigns by enabling access to a range of publisher sites from one interface.
  • Efficient bidding. Predictive bidding, conversion and click algorithms enable mobile advertising DSPs to learn the market, and iterate optimal bidding over time.
  • Advanced targeting. Unlike ad networks, DSPs give advertisers free range to create their own targeting criteria based on their segments..
  • Intelligent reporting. The automated processing of more bid requests means more data overall. DSPs also provide advertisers with in-depth analytics to optimize their campaigns from a consolidated dashboard.

Looking for a mobile advertising retargeting DSP?

Looking for a DSP that specializes in app retargeting campaigns to enhance your 2022 retention strategy? Reach out to us for support planning your app’s mobile marketing strategy in Q2 and beyond for maximum performance.