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DSP vs SSP: Let's Nail This Down Once and for All

Written by Self Advertiser | Nov 7, 2017 8:52:00 AM

What is a DSP? What is an SSP? How do they fit together? How do they differ? These are all questions that intrigue plenty of marketers but most are embarrassed to ask and sometimes searching on Google can result in a little migraine. Don’t worry - we’ve got you covered. This post will clear all confusions and help you close any knowledge gaps you may have in this respect. Let’s dive in.

The Basics

A DSP is a demand-side platform that allows advertisers broad access and management of digital inventory through multiple ad exchanges, with the options to serve and track ads, perform real-time bidding on ads, utilize wide targeting, and optimize. Also, some DSPs offer inventory only from their network, such as Google Adwords (a DSP), which can only bid on its inventory and partner inventory. Google’s DoubleClick Bid Manager (aka DBM), AppNexus, TubeMogul, and others are examples of DSPs.

On its other end you have the SSP - a supply-side platform that allows publishers to place online ads before a selected target audience, as well as to manage, automate and optimize their advertising space through a single interface. Examples include Google’s DoubleClick for Publishers (aka DFP), AdSense, PubMatic, The Rubicon Project and more.

Customer Difference

Basically, both DSP and SSP are the same thing for different users. It’s like looking at the number 6 plastered on the concrete from different perspectives. Looking from the bottom up, it’s a six alright but look at it from the other way around and it becomes a nine. A similar thesis can be used to explain the DSP/SSP situation, much in a way the ad network vs ad exchange dilemma is often described. Both platforms are two sides of a coin, complimenting each other. The first real, tangible difference here is who is the end customer.

For DSPs, those would be marketers and advertisers who seek to find the platform that will offer them the most impact of their ads and control over them. These ads are accompanied by a set of constraints provided by the marketer/advertiser, such as geo and device targeting possibilities or more advanced keyword-based targeting. The cost is one of the main factors whether a DSP is worth considering as it directly influences the ever-important return on investment. The end customer for an SSP is the publisher, whose main purpose is to sell ads at a maximum price level to the demand side.

Scope of Work

It’s easy to see where the confusion starts as both platforms are powered by similar technology. The difference in terms of the scope of work done by DSPs and SSPs is another key differentiator. DSPs present a centralized tool for all things ads - buying, serving and tracking - essentially an ad server that serves the ads. Hence, they have a more narrow focus and the ability to optimize different campaigns with ease. SSPs are more encompassing platforms, allowing publishers the possibility to connect inventory to multiple ad networks and ad exchanges, as well as DSPs, all at the same time. At the moment, they are among the largest sources of ad inventory, which ultimately helps publishers in establishing some “ground rules”. For instance, a publisher can set up a minimum selling amount of its inventory to a specific media buyer or through a specific channel. This tactic is sometimes used to attract new advertisers to a publisher’s website, which is why SSPs are also often referred to as a sell-side platform.

How DSPs and SSPs Work

Both advertisers and publishers access advertising exchange through their respective platforms. Advertisers use DSPs while publishers use SSPs. The entire process begins with a user visiting a website with an ad slot. Ad networks put a code snippet on the publisher’s website for the said ad slot, which allows advertisers to place their ads there using a DSP that the ad network supplies. The info is then routed through an ad exchange, the place where publishers provide their stock to advertisers directly using an external DSP. Ad exchange, in turn, translates this information into an auction. Bid requests are sent to DSPs and they “answer” by making the bid on behalf of the advertiser. The ad exchange collects all the bids and passes the winning one to the original tag from the publisher ad server.

An overview of how a DSP and SSP function

Source: OrbiSoft

Try to look at it from a different angle. DSPs represent a layer of technology in the entire media buying machine, helping to make the buying process as straightforward and streamlined as possible. This is done by making decisions on an impression level (at its lowest), filtered through multiple parameters and data sources. The role of a DSP is to aid media buyers in combining, bidding, and ultimately optimizing digital inventory across the entire media landscape. On the other hand, an SSP is more of an upper-level layer that acts as a mediator on the supply side of the media buying process. Its purpose is to help publishers manage how they sell impressions, provide a better management of their inventory and its price, as well as maximize the advertising revenue. In a way, it’s the publisher's counterpart of a demand-side platform.

Different Sides of the Same Spectrum

Here is yet another way to look at the issue. A DSP portrays the “buyer aspect” of media buying while an SSP depicts the “seller aspect” of it. With a demand-side platform, an advertiser gets a scalable, direct approach to reaching its target audience at any time and place, under the preferred context. A supply-side platform enables a publisher to manage and control its digital ad inventory and make as large as possible revenue from every form of digital media.

Where the two platforms go their separate ways is the user’s intent. Whereas DSPs are used to buy ad impressions in bulk as cheaply as possible (thus more efficiently), SSPs do the reverse thing and maximize the prices of those ad impressions. The general notion is to make the impressions available to a broad advertiser public, often by RTB (real-time bidding), in order for publishers to attain higher levels of revenue for their inventory. Both platforms come under one ecosystem, yet are different enough in their operations.

Why DSP and SSP Matter

Both platforms are a result of a historical need for eliminating the human factor. If that sounds like a plot from a Terminator-like movie, rest assured that it isn’t. It’s just the fact that historically, people were the sole driving force behind buying and selling of digital ads. The process was costly and often unreliable until DSPs and SSPs came into the big picture and made it more wallet-friendly and efficient. By removing the human factor out of the equation, DSPs eliminated the need to negotiate ad rates and do things manually. From the publisher’s point of view, SSPs are a crucial figure in reducing the risk of programmatic selling undervaluing their inventory. In addition, they are an immense help in taking relationships with a number of networks to another level.

Hopefully, this post explained the key differences between a DSP and an SSP. Now that you know a little bit more about the technology, you can use it to your advantage and implement in your marketing strategy.