Technology has advanced many fields in the past years. That includes advertising. Aside from advertising on print media, TV, and radio, advertising is now online.

For many advertisers, the most difficult part is to find the best material; however, for online advertisers, matching the advertising inventory—the available ad spaces offered by publishers— and the goals of what they are advertising is a very important factor, and it has proven to be a big challenge. To help leap this challenge, various ad networks and ad exchanges came up; and then demand-side platforms (DSPs) came up.

What is Demand-Side Platform?

A demand-side platform (DSP) is a technology that automates and optimizes an ad company’s search for advertising inventories based on their audience targeting parameters.

DSPs work by letting advertisers buy ad spaces from a wide range of ad space providers in an automated way.

In the old days, looking for an ad space and bidding for it are done manually. This made advertisers and businesses hire several people to look for the appropriate online ad space provider that would help them target the right group of online audience.

This has proven to be less accurate, less efficient, more expensive, and much more time-consuming.

Later on, ad networks and ad exchanges came out. This automated the process of online advertising; however, these still proved to be slow as well, although faster than the manual form of online advertising, which makes it less expensive and less time-consuming.

In DSPs, there is an ad auction that happens between the ad space provider and the advertiser; but unlike other forms of advertising and the older forms of online advertising, DSPs utilize an algorithm that would facilitate the process.

Searching and bidding of online ad spaces then happen automatically, making the process more optimized and more organized. This becomes more accurate, more efficient, less expensive, and is less time consuming for both advertisers and publishers.

The ad space bidding happens in an online marketplace for advertising inventory. This marketplace is known as an ad exchange.

In an ad exchange, there is an interface for demand and supply. DSPs represent the demand that advertisers use to serve their ads on ad inventories.

On the other hand, side-sell platforms (SSPa) represent the supply from the publishers, which allows them to send out the impressions they have regarding the advertiser or advertisement.

DSPs allow advertisers to collate the impressions of the networks regarding the advertiser or advertisement. With that, the advertiser can automatically view the various offers placed by the different ad space providers. After that, once the correct advertising inventory is found, the DSP starts the bidding and the advertiser sees this bidding process in real-time to monitor what is happening. The advertiser can then start buying an ad space from the space provider.

This entire process may sound a little tedious and long, but with DSP, this will only take a few milliseconds, almost equivalent to the amount of time used when loading a webpage.