DSP vs SSP vs DMP in Advertising | Differences and Examples in AdTech

Understanding the Buy Side and Sell Side of Digital Advertising

In the world of digital advertising, the terms “buy side” and “sell side” refer to the two sides of the advertising transaction.

The “buy side” refers to advertisers and agencies who purchase advertising space and time on digital media. This includes companies such as brand marketers, media agencies, and trading desks. The goal of the buy side is to reach their target audience with the most relevant and cost-effective advertising.

The “sell side” refers to publishers and website owners who sell advertising space and time on their digital media properties. This includes websites, mobile apps, and other digital media platforms. The goal of the sell side is to monetize their website traffic and generate revenue from their digital advertising inventory.

In a typical digital advertising transaction, the buy side uses technology such as Demand Side Platforms (DSPs) to manage and purchase advertising inventory programmatically, while the sell side uses technology such as Supply Side Platforms (SSPs) to manage and sell their digital advertising inventory programmatically. The transaction between the buy side and the sell side is facilitated by real-time bidding, where the buy side sets a bid price and the sell side sets a minimum price for their advertising inventory. The highest bid price that meets the minimum price set by the sell side wins the impression, and the ad is displayed to the user.

SSP vs DSP

What is a DSP (Demand Side Platform)?

A demand-side platform (DSP) is a type of advertising technology platform that enables buyers of digital advertising inventory to manage, purchase, and optimize ad impressions through a real-time bidding (RTB) process.

DSPs offer a centralized platform that allows advertisers to bid on and purchase ad impressions from multiple ad exchanges and supply-side platforms (SSPs) in real time. This allows advertisers to reach specific target audiences and optimize their ad campaigns based on real-time data and analytics.

By utilizing a DSP, advertisers can streamline their digital ad buying process and gain greater control over their targeting, bidding, and budgeting. This can result in more efficient and effective ad campaigns and improved ROI for the advertiser.

Examples of DSPs are Google Ads DSP, Trade Desk, AppNexus (xandr), Adform, MediaMath, LiveRamp, and Adobe Audience Manager.

What is an SSP (Supply Side Platform)?

Supply Side Platform (SSP) is a technology platform that provides a solution for publishers and website owners to manage and sell their digital advertising inventory programmatically. An SSP helps publishers and website owners monetize their website traffic by connecting them with multiple demand sources, such as DSPs and ad networks, through real-time bidding. The SSP allows publishers to set rules for pricing and targeting and provides them with real-time insights into their ad revenue and performance.

Examples of SSPs are AppNexus (xandr), Rubicon Project, Index Exchange, OpenX, PubMatic, and Sovrn.

DMP vs DSP vs SSP

What is a DMP (Data Management Platform) and how does it work together with DSPs and SSPs

A DMP is a platform that collects and manages data about consumers, including their demographic, behavioral, and contextual data. Advertisers use a DMP to better understand their target audience and to create more effective and targeted advertising campaigns.

When an advertiser wants to purchase digital advertising inventory, they use a DSP to place a bid for a specific ad impression. This bid is then transmitted to the SSP for the relevant website or publisher. The SSP then auctions the ad impression to multiple demand sources, including DSPs and ad networks, in real-time. The highest bid wins the auction and the advertiser’s ad is served to the target audience.

The DMP provides the advertiser with data and insights about their target audience, which the advertiser can use to optimize their campaigns and make more informed bidding decisions. The DMP can also provide the SSP with information about the target audience, which the SSP can use to optimize the real-time bidding process.

In this way, DSPs, SSPs, and DMPs work together to provide a comprehensive solution for programmatic advertising. DSPs provide advertisers with the ability to reach their target audience with the most relevant and cost-effective advertising, SSPs help publishers and website owners monetize their website traffic by connecting them with multiple demand sources through real-time bidding, and DMPs provide advertisers with the data and insights they need to create more effective and targeted advertising campaigns.

DMP, DSP and SSP examples and use case

Consider the following example to understand how a DMP, Demand Side Platform (DSP), and Supply Side Platform (SSP) can work together in programmatic advertising.

A sportswear company, “SportyX,” wants to run a targeted digital advertising campaign for its new line of running shoes. The campaign’s goal is to reach running enthusiasts who are likely to be interested in purchasing the new shoes.

DMP: SportyX uses a DMP to collect and manage data about its target audience, including demographic, behavioral, and contextual data. The DMP provides SportyX with insights into running enthusiasts’ preferences, behaviors, and interests.
DSP: SportyX uses a DSP to manage and purchase digital advertising inventory programmatically. The DSP allows SportyX to set bid prices, target specific audiences, and monitor and optimize the campaign in real time. SportyX uses the insights from the DMP to create a highly targeted audience segment of running enthusiasts.
SSP: The running enthusiasts’ digital activity is monitored by an SSP, which then auctions the ad impression to multiple demand sources, including SportyX’s DSP, in real time.
Real-time bidding: When the running enthusiasts visit a relevant website or mobile app, the SSP auctions the ad impression to multiple demand sources. SportyX’s DSP, using the insights from the DMP, places a bid for the ad impression and wins the auction.
Ad display: The winning bid from SportyX’s DSP is accepted and the ad for the new line of running shoes is served to the target audience of running enthusiasts.

In this example, the DMP provides the necessary data and insights for the DSP to make informed bidding decisions and reach the target audience. The SSP connects the publisher or website owner with multiple demand sources through real-time bidding. And the DSP provides SportyX with the ability to reach the target audience with the most relevant and cost-effective advertising. By working together, the DMP, DSP, and SSP make it possible for SportyX to run a targeted, successful, and efficient programmatic advertising campaigns.