Programmatic Advertising 101: What is a DSP?

Key Takeaways:

• DSP stands for “demand-side platform.” It sits on the buy side of programmatic advertising, opposite the supply-side platform (SSP) that publishers use to sell inventory.
• A DSP is an automated platform where advertisers and agencies purchase digital ad inventory like banner ads, mobile ads, and video.
• DSPs use real-time bidding (RTB) to buy ad impressions instantly and efficiently across multiple sites simultaneously.
• Key benefits include audience targeting, brand safety, fraud prevention, real-time performance visibility, and flexible budget management.
• When choosing a DSP, evaluate data types, ad exchange integrations, reach, cost, training/support, and ease of use.

You need to get started using programmatic buying tools, but you’ve never done it before, and you don’t know where to begin. Join the club. We get it. It’s the same reason we haven’t learned to cook for ourselves yet.

Here’s the good news: We’ve got experts at Basis who know the ins and outs of programmatic advertising. All you have to do is ask the right questions. Lucky for you, we’ve asked the basic questions and we’ve come equipped with answers—and, lucky for us, we've been assured repeatedly that there is no such thing as a dumb question.

Understanding Programmatic Ad Buying

To start: Programmatic is a very broad term. Simply put, it’s technology that automates digital media buying. This can include automating anything from rate negotiation and campaign set up to optimizations and actualizations. One of the primary buying tools you have at your disposal is a DSP.

What is a DSP?

A demand-side platform (DSP) is an automated ad-buying platform that advertisers and agencies use to purchase digital ad inventory, such as banner ads, mobile ads, and in-stream video, across many websites and apps at once. DSPs are integrated into multiple ad exchanges.

Popular examples of DSPs include The Trade Desk, Google DV360, Amazon DSP, and Basis DSP.

How Does a DSP Work?

A DSP works by using real-time bidding (RTB) to buy ad impressions automatically, evaluating and bidding on each impression in the milliseconds before a page loads. Here’s the process step by step:

1. An ad impression becomes available when a user loads a webpage or app.
2. The DSP evaluates the impression against the advertiser's targeting criteria.
3. If the impression matches, the DSP places a bid in the auction.
4. The winning bid's ad is served to the user—all before the page finishes loading.

What is an SSP?

An SSP is not the same thing as a DSP, but it is similar in concept.

Supply-side platforms, or sell-side platforms (SSPs), facilitate the sale of publisher inventory through an ad exchange. SSPs offer services such as minimum bid requirements in order for the publisher to maximize how much their ad space sells for. The difference is that DSPs are for marketers and SSPs are for publishers. SSPs, like DSPs, are plugged into multiple ad exchanges.

What is an Ad Exchange?

An ad exchange is a digital marketplace where advertisers and publishers buy and sell ad space through real-time bidding (RTB). Think of the ad exchange as the "go-between" in the automated buying world. An ad exchange is a digital marketplace that enables advertisers and publishers to buy and sell advertising space via real-time bidding (RTB). Real-time bidding (RTB) is the process of buying and selling ad impressions through instantaneous auctions that occur in milliseconds. The ad exchange announces each impression—with the inventory flowing through DSPs and SSPs—in real time and asks buyers if they are interested in buying said impression and at which price

DSP vs. SSP vs. Ad Exchange

Why Use a DSP?

In order to understand why DSPs matter, it's important to remember where the need came from and how the ad industry operated before automated buying. Historically, if you were a media buyer at an ad agency, the buying process was facilitated through human beings—it was you (the advertisers), the publishers (website where ad will appear), an audience (the viewer of the ad), and a bunch of spreadsheets and emails going back and forth negotiating prices. This process was complicated, time-consuming, and often error-prone. DSPs allow advertisers and agencies to buy across a lot of sites at the same time—and all of this is done instantly and efficiently, usually before the webpage loads.

Additional Benefits of Using a DSP

• Audience targeting capabilities – Reach specific audiences based on demographics, behaviors, and interests
• Brand safety tools – Ensure ads appear in appropriate contexts by partnering with a DSP that prioritizes brand safety
• Fraud prevention – Protect ad spend from invalid traffic by adopting a DSP with strong fraud prevention features
• Real-time performance visibility – Monitor campaign results as they happen with tools like dashboards
• Optimizations toward a goal – Automatically adjust campaigns to meet objectives
• Multi-tactic approaches – Run diverse strategies across channels simultaneously
• Flexible budget shifting – Reallocate spend based on performance

Selecting the Right DSP for Your Programmatic Ads

How to Choose the Right DSP

There are many DSPs in the programmatic world to choose from. Choosing the right DSP for you depends on a number of factors.

DSP Evaluation Checklist:

• Data types – Does it support first-party data, third-party data, or both?
• Ad exchange integrations – How many ad exchanges is the DSP connected to?
• Reach and scale – What is the total available inventory? (DSPs like Basis DSP, for instance, give you access to over 40 billion daily impressions across all devices and channels.)
• Cost structure – What are the fees and pricing models?
• Training and support options – What level of hands-on assistance is available?
• User interface complexity – Is the platform intuitive, or does it require extensive education?

Frequently Asked Questions About DSPs

What does DSP stand for?

DSP stands for demand-side platform, software that lets advertisers and agencies buy digital ad inventory automatically through real-time bidding.

What is the difference between a DSP and an SSP?

A DSP is used by advertisers to buy ad inventory, while an SSP is used by publishers to sell it. Both connect through an ad exchange.

What are examples of DSPs?

Widely used DSPs include The Trade Desk, Google DV360, Amazon DSP, and Basis DSP.

What if I sign up for a Demand Side Platform and find out I have no idea what I’m doing?

Some DSPs come with a full team of experts, offering you everything from full-service to self-service and everything in between. With Basis DSP, for example, you'll start with a platform training program, offering you an overview of programmatic, a walk-through of the interface, and best practices for campaign creation and optimization. Ongoing support is available in the form of a customer success manager and resources to keep you informed—like new feature webinars, best practice guides, and industry-leading research reports.