What Is a DSP, SSP and Ad exchange, and how do they fit together?

Jess Thompson
Jess ThompsonCommunications ManagerMore about Jess

In our previous Bannerconnect Basics blog post we examined programmatic; the automated buying and selling of advertising impressions, and RTB, or real-time bidding, a type of programmatic that occurs as a lightning-quick auction. This automated trading between online publishers and advertisers is powered by intricate technology. You’ve probably heard of DSPs, SSPs and ad exchanges, but what are they? How do they fit together? And what do they do to power programmatic advertising? We take a closer look in this Bannerconnect Basics blog.

#1. What is a DSP?

A DSP, or demand-side platform, allows advertisers to buy impressions from a wide range of publisher sites that are targeted to specific users based on things like location and previous browsing behaviours. A DSP ‘plugs in’ to an ad exchange (covered below), where publishers make their inventory available. DSPs analyse the impressions SSPs put out and purchase on behalf of advertisers. They might pay more for impressions in a certain location or to reach a consumer who might find that ad relevant

#2. How is a DSP different to an ad network?

DSPs pick up where ad networks left off. There’s some overlap in that you can access a wide range of inventory and targeting, but the key differentiator is that DSPs offer a centralised tool for buying, serving and tracking ads, and therefore the ability to optimise campaigns more easily.

#3. Is this another example of machines taking over?

Kind of, but that’s only a problem if you’re a lover of faxing. DSPs remove some of the more monotonous tasks involved in advertising to empower campaign managers to focus on optimising campaigns and improving the quality of their advertising. DSP removes any risk of human error and cuts costs on sales people and ad buyers. This makes the process cheaper and more efficient, as there’s no longer any need for negotiating ad rates or faxing manual ad insertion orders

What Is a DSP, SSP and Ad exchange, and how do they fit together?

#4. So then what’s an SSP?

An SSP, or Supply-side platform, is used by online publishers to automate the selling of their advertising space, or inventory. It’s basically the same as a DSP but from the other side. While a DSP used by marketers to buy ad impressions from exchanges as cheaply as efficiently as possible, SSPs designed for publishers to maximise prices they sell impressions at. They’re both powered by similar kinds of technology.

SSPs allow publishers to connect their inventory to multiple ad exchanges, DSPs and networks all at once, opening it up to more potential buyers. SSPs also offer publishers the ability to set up ‘price floors’, or the minimum amount they will sell their inventory for to specific buyers or through specific channels. For example, some publishers may lower their price slightly for a new advertiser as a way to bring them onto their site. SSPs are also sometimes referred to as a sell-side platform or yield-optimisation platforms.

#5. Got it. So an ad exchange is like a digital marketplace

Yes. Publishers stock up ad exchanges with their impressions, and advertisers pick the ones most appealing to them. This benefits both sides, as publishers make their inventory more widely available and advertisers have a bigger range of choice, all in one place.

An ad exchange is similar to an ad network, but networks will often add their own mark up to the inventory. Ad exchanges can be open or private, with the latter giving the publisher more control over which advertisers can buy impressions on their site and at what price.

Now you know a bit more about the technology behind programmatic trading. Stay tuned to our Bannerconnect Basics blog series as we aim to make ad tech more accessible and easier to understand.

Interested in how this technology could help power your campaigns and make your advertising more effective? Talk our team today!

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