With new technology comes new possibilities. Today, we’re experiencing a mobile revolution. Only a decade or so ago, it was an online revolution. Before that, an IT revolution. Go as far back as you like: the first man-ape to bang the rocks together immediately gained an advantage over his rivals, as depicted in Kubrick’s film.
Also, new words. How incomprehensible some of our language today must seem to people only, what, 30 years ago? From PCs to modems to broadband, we increasingly use the jargon of tech without a second thought.
It follows that mobile advertising today rides on the tech that enables sufficiently capable mobile devices to show rich media and video ad units, capacious broadband to deliver these ads, and powerful systems in the background that drive all this. And with this new form of advertising comes new terms: DSP, RTB, SSP, and so on.
So here’s a very quick guide to DSP and RTB. For a much more comprehensive version, take a look at the Q&A our Director of Enterprise Solutions Emmet Geaney put together for mobithinking.
Demand-side Platforms: Tech helps the buyers
The simplest definition of a DSP is that it’s a system that helps advertisers find the right opportunities to show their adverts.
A good analogy is that of financial traders who want to beat competing traders to the best buys. To do this, traders use platforms that bring together feeds, accumulate data, and employ smart algorithms that identify opportunities and enable them to buy according to their clients’ goals. If you’ve seen pictures of traders with figures and charts on their screens, you’ve seen them using these kinds of systems.
Or, another analogy is that of weather modelling. A few years ago we had forecasters with slightly dodgy hairstyles sticking symbols onto charts. Today the Met Office in the UK processes more than 10 million weather observations a day which they feed into an IBM supercomputer that can perform 1,200 trillion calculations per second.
The message is clear: greater processing power and data means you win. So, in a mobile advertising universe that is expanding at an increasing rate, buyers need a means of handling scale while ensuring they find the right inventory.
This is where a DSP comes in. It brings together data for buyers, and uses algorithms to process that data and find the right opportunities, in the form of real-time placement of advertising against the ad slots for an individual user. This is contextual data – that is, from the publishers themselves, describing their inventory – combined with first-party advertiser data describing the target audience, second-party audience and ad tech data from the DSP and third-party data bought in.
Real-time Bidding: Tech helps the market
But what does the DSP plug into, to find this inventory?
The answer is an exchange. The financial trading analogy is very powerful here. Traders plug into exchanges so they can access more breadth of activity and buy more stock. In the same way, a DSP plugs into automated exchanges where ad slots are traded.
These exchanges are based on auctions, primarily using a form of programmatic buying called Real-time Bidding. With RTB, when a user access a page online, the exchange is notified of the slots that need filling, and the DSP checks to see if those slots are relevant for what the buyer wants to advertise. If so, the DSP bids for the slot and if it wins, it displays the ad. This happens in milliseconds – while the page is being rendered in fact. It’s like an ultra-fast eBay, right down to the second-price auction that the winning bidder pays.
If this seems a bit esoteric, take a look at the ad slots on this very page. It’s entirely possible that they were placed through RTB, in between you clicking a link to see this page, and the page being displayed.
Supply-side Platforms: Tech helps the seller
Adfonic is a DSP, and we help buyers. On the other side of this equation are the sellers, who want to monetise their sites or apps, and they use Supply-side Platforms (SSPs). Everything that we do, they do too, but the other way around: they employ processing and data, and plug into the RTB exchanges, to maximise the revenue they get from their ad slots. I wrote last year about how RTB can benefit sellers as well as buyers.
Mobile: Tech without the cookies?
Finally, a word about mobile specifically. While DSPs, RTB and SSPs exist in both the mobile and desktop advertising space, mobile does present unique challenges that desktop does not. In summary this boils down to the lack of cookies in mobile, and fragmentation of the mobile world, and I wrote about this for my very first post on Fourth Source.
This is why a mobile solution needs to be built for mobile from the ground up. DSP, RTB, SSP, these are all theoretical models. It’s the implementation that counts. If you want to reach mobile inventory, you need to use a mobile DSP.
As I said in the intro, this is a brief introduction to these terms. Adfonic’s Director of Enterprise Solutions, Emmet Geaney, worked recently with mobithinking to put together a comprehensive Q&A which looks at other issues such as how mobile DSPs and ad networks compare, the main players in the market, and a checklist for choosing a mobile DSP.
So click this hyperlink to download the latest on DSP and RTB – and consider how meaningless that sentence would have been only a few years ago.
