If you’ve worked with programmatic advertising, then you’ve probably heard about DSPs and SSPs — two terms that are essential to how digital ads are bought and sold today.
While they often come off as complicated industry jargon, understanding what these platforms do is crucial to the automated buying and selling of ad space. A DSP (Demand-Side Platform) is for advertisers to buy ad space and reach their audience, while an SSP (Supply-Side Platform) is for publishers to sell their ad space and get the best value.
But whether you’re an advertiser or a publisher, understanding the roles of DSPs and SSPs is essential as both are needed to make the programmatic system work smoothly.
What is a DSP?
A DSP is a platform that allows advertisers to buy digital ad space programmatically in real-time. It’s where they can manage and optimize their ad campaigns across multiple publishers (websites, apps, and videos) and ad exchanges.
How DSPs Make Advertisers’ Lives Easier (and More Profitable)
Let’s say you’re launching a new line of sneakers and you don’t want to waste money showing ads to people who don’t care about sneakers. A DSP will bid for ad slots on, for example, sports blogs, workout apps, and streaming platforms exactly wherever your audience hangs out.
A DSP will also:
- Streamline Ad Buying: Which automates the entire ad buying process using real-time bidding (RTB) to purchase ads at the right price instantly.
- Enable Precision Targeting: That uses advanced data analytics to help advertisers find and reach the most relevant audiences, ensuring campaigns hit the mark.
- Expand Cross-Platform Reach: Which places ads across display, video, mobile, and CTV, maximizing reach without the hassle.
What is an SSP?
An SSP lets publishers (those who have digital ad inventory, like websites or apps) manage and sell ad space to the highest bidder — in real-time, through auctions. The SSP takes care of the selling process, ensuring that publishers can make the most out of their ad inventory.
How SSPs Unlock Higher Revenue for Publishers
Imagine you run a popular tech blog with thousands of daily visitors. Big brands want to advertise on your site, but reaching out to each one takes too much time.So, by listing its ad space on an SSP, multiple advertisers can bid in real-time, ensuring your blog gets the best possible price.
An SSP will also help you with:
- Yield Optimization: You get the best value by selling inventory to the highest bidder, maximizing revenue without any hassle.
- Diverse Demand Sources: SSPs connect publishers with various advertisers and ad exchanges, expanding the range of buyers for their ad space.
- Dynamic Pricing with RTB: With real-time bidding, SSPs adjust prices based on demand, ensuring inventory is sold at the best possible rate.
But how do they work together in programmatic advertising?
| STEPS | WHAT HAPPENS | WHO’S INVOLVED |
|---|---|---|
| Advertiser’s Demand (via DSP) | Advertisers set campaign parameters (target audience, ad creative, bidding strategy) in the DSP, which then participates in real-time auctions for available inventory. | Advertiser using a DSP |
| Publisher’s Supply (via SSP) | Publishers list their available ad inventory on an SSP. When an impression is available, the SSP runs an auction between multiple DSPs. | Publisher using an SSP |
| Auction & Ad Placement | The SSP runs a real-time auction where the highest bidder wins the ad space, ensuring optimal pricing for the publisher and a targeted ad for the advertiser. | Real-time Auction |
To summarize the differences between DSPs and SSPs:
| FEATURES | DSP | SSP |
|---|---|---|
| Purpose | Helps advertisers buy ad space efficiently | Helps publishers sell ad inventory at the best price |
| Who Uses It | Advertisers, brands, and agencies | Publishers, media owners, and app developers |
| How It Works | Uses data-driven bidding to purchase impressions that match advertiser goals | Runs auctions to sell ad inventory to the highest bidder |
| Main Benefit | Optimizes ad spend, targeting, and campaign performance | Maximizes revenue, fill rates, and ad quality |
| Technology | Uses AI & machine learning for better targeting and bidding | Uses automation & dynamic pricing to increase earnings |
Why DSPs & SSPs Need Each Other in Programmatic Advertising
A DSP and an SSP are like peanut butter and jelly. They’re distinct, but when combined, they create a much more powerful solution. Without a DSP, advertisers can’t effectively reach their audience. Without an SSP, publishers can’t maximize the value of their ad space.
Whether you’re looking to buy or sell ad space, knowing the basics of DSPs and SSPs is a crucial step to make the programmatic ecosystem work seamlessly for your objectives.
