Programmatic Advertising: What Are DSPs, SSPs and DMPs?

Behind the scenes in programmatic advertising there’s a lot more going on than you might realize. You might not understand a few of the key terms you’re seeing thrown around when researching it for your business, so we’re here to clear up some of the most common misunderstandings you’re having.

And these often come in the form of DSPs, SSPs and DMPs - so, what are they?

As these abbreviations are so similar to each other, it’s easy to get them mixed up and also hard to understand what they really mean. You need to know what they are, how they work and why they’re different from each other if you want to dive into the world of programmatic advertising. That’s why we’re going to take a deep dive into what they mean for the programmatic industry so you can get it involved in your marketing strategy.

But first, we have to ask - do you understand what programmatic advertising is? If not, read our guide to get the know-how before you dive into the specifics: Video Game Paid Ads: Do You Understand Programmatic Advertising?

What is a DSP?

DSP stands for “demand-side platform”. DSPs are pieces of software that are used to buy advertising through automation. They are most commonly used by advertisers and agencies to purchase display, video, mobile and search ads. They are expected to have a compound annual growth rate of 26.3% over the next 5 years according to Market Watch.

DSPs help make the process of buying and selling digital ads cheaper and more efficient by automating it. You no longer need to negotiate ad rates with various companies or manually send over ad orders. This has removed the time, money and effort it historically took human buyers and sellers to do this manually - who were also notoriously costly and unreliable in their work. 

How the process works can be difficult to understand. DSPs allow advertisers to buy impressions over a number of publishers’ websites, but target their ad placements to specific audiences based on information including their interests, previous browsing history and location. Publishers make these impressions available through ad marketplaces, and DSPs choose which would be most suitable for an advertiser to purchase. 

The price of these ad impressions are often established in real-time, through a method called real-time bidding (RTB). This means that there is no need for a human salesperson to bargain on prices, and instead impressions are auctioned off the highest bidder through the use of sophisticated AI. This process takes place in mere milliseconds in the space between a user clicking on a web page and the web page loading.

One of the real benefits of a DSP over using an ad network is that they allow you to buy, sell and track your ads using one tool, allowing you to leverage a number of ad exchanges in one place. Most ad networks offer some sort of DSP-like tool or RTB function now. It’s thought that DSPs are the future of ad networks.

Due to the cost-efficiency of DSPs, they are more commonly favored over both ad networks and human ad buyers. Human input is still necessary to create ad strategies and optimize campaigns, so don’t be fooled into thinking that the process is completely automated.

There are many big companies you can work with for their DSP technology, including Facebook and Amazon. There are also a range of smaller, more niche companies that might be more suitable for your industry.

What is an SSP?

SSP stands for “supply-side platform”. An SSP is a piece of software that is used to automate the selling of advertising. They are most commonly used by advertisers and agencies to sell display, video, mobile and search ads.

You might be thinking that this sounds quite similar to what we covered in the DSP section. That’s because it is - SSPs are the publishers’ equivalent of a DSP. Unlike DSPs, which are used by advertisers to make buying ads cheaper, SSPs are used by publishers to maximize the price their impressions sell at. 

What’s more complicated than understanding what SSPs are is understanding how they work. This software allows publishers to connect their inventory to DSPs, ad exchanges and ad networks across the board at the same time.

Because SSPs are the opposite of DSPs, they provide the ad impressions that DSPs analyze and choose from for marketers depending on demographics they have specified. Presenting impressions to as many potential buyers as possible gives publishers the opportunity to maximize the profits they receive from the release of their inventory. 

As with DSPs, the reasons SSPs work is because of the cost-effectiveness of removing humans from the equation. They also allow publishers to set “price floors”, which specify the minimum amount their inventory can sell for, and determine which advertisers are able to purchase inventory.

There was concern that automating the ad buying process would in turn reduce the value of publishers’ inventory.  However, SSPs help combat this and additionally help publishers manage their connections with ad networks and buyers.

However, human input is still necessary to facilitate SSP use. They can be used to direct campaigns, determine if salespeople or programmatic advertising is more efficient and sell inventory that has otherwise failed to sell. SSPs are simply a tool to simplify the selling process.

Companies including Google and OpenX are involved in selling SSP technology, and you may be able to find outlets more specifically related to your industry.

What is a DMP?

Last but not least we come to DMPs. DMP stands for “data management platform”, and these are used as warehouses for storing data. They are a type of software that accumulates, stores and arranges data in a way that is useful for marketing, publishing and business purposes. 

For marketers in particular, they are commonly used to control cookie IDs and segment audiences in order to target certain groups of users with specific ads. Advertisers are now frequently buying media across a range of platforms including DSPs, and DMPs help bring all of that data together in one location to optimize future ad campaigns.

While this sounds quite a lot like what a DSP itself does, DMPs have a completely separate function. DMPs only store and analyze data, whereas DSPs are responsible for buying ad space based on that information contained within a DMP. Information is transmitted from an advertiser’s DMP to DSPs to help instruct ad buying processes. They can also be linked to SSPs to help publishers sell their ads for more. 

Without other technology DMPs cannot do much to help your marketing decisions. Companies often offer combined platforms, linking DMP and DSP technology. However this can make your data less portable, and limit you to sticking with one DSP provider.

Don’t think that DMPs are only used by marketing personnel, as they are used across a range of industries to house and catalog data. They are most commonly used by agencies, marketers and publishers however, to create detailed data sets and understand customer bases better. 

It should now be clearer to you how these three types of software differ from and interact with each other, and how they contribute to your programmatic advertising strategy.

But what might not be clear is how you can get started using them. This can cost you time and money, and at Game Marketing Genie we know that every resource is valuable - especially if you’re a smaller business.

Come to the expert programmatic advertising agency that knows how to do all this and more so you can concentrate on growing your business for the future. Let's talk soon!

Want to know more? Check out our programmatic advertising page to find out how we can help you!