There are many ways to advertise online. One of the most common methods is to display ads for your business on third-party websites. At one point in time, that type of advertising was arranged manually — today most of it is done through programmatic advertising.
Programmatic advertising is where you (the advertiser) and the site where you want to display your ads (the publisher) automate the transaction process rather than arranging a deal manually. That automation happens via demand-side and supply-side platforms.
But what’s the difference between a demand-side platform vs. supply-side platform? What roles do they play in the programmatic advertising process? Keep reading to find out!
Then, to get even more transformative insights into how to market your company, subscribe to our email newsletter, Revenue Weekly!
What is a demand-side platform vs. supply-side platform?
To begin our discussion of demand-side and supply-side platforms, let’s look at a basic definition of each term.
What is a demand-side platform?
A demand-side platform (DSP) is a programmatic advertising platform designed to help advertisers identify and obtain advertising opportunities at the lowest cost. DSPs automatically identify the most relevant and least expensive sites to show advertisements.
What is a supply-side platform?
A supply-side platform (SSP) is a programmatic advertising platform for publishers. It helps websites sell their ad inventory to advertisers for the highest price. Basically, SSPs are tools for helping publishers drive revenue by selling ad space.
What is the benefit of a demand-side platform vs. supply-side platform?
You may wonder what the benefits are of using DSPs and SSPs. Both platforms are preferable to manual advertising, but why is that?
Benefit of DSPs
There was a time when display advertising had to be handled manually. Advertisers had to seek out publishers and contact them directly about purchasing some of their ad inventory.
The core benefit of DSPs is that they automate the process of purchasing ad space — you set some initial criteria, and the platform takes it from there.
This feature makes DSPs a desirable choice for advertising. There are countless websites that offer ad inventory, and it can be a huge pain trying to navigate all those options on your own.
More than just saving you time and effort, DSPs can also help save you money. They don’t just look for any old ad opportunities — they look for the ones that are the least expensive while still being relevant to your business.
Benefit of SSPs
The main benefit of SSPs is the same as for DSPs — that is, they help automate the advertising process. Just like advertisers, publishers once had to seek out advertisers to purchase their ad inventory. Today, though, they have SSPs to manage that process for them.
However, there’s a key difference between a DSP vs. SSP. Where DSPs exist to help advertisers save money, SSPs exist to help publishers earn money.
DSPs will not only save publishers the trouble of finding buyers for their ad inventory, but they’ll also help those publishers drive higher bids and earn more revenue from the inventory sales they make.
How do demand-side and supply-side platforms work?
We’ve explained what DSPs and SSPs do, but you may now wonder how they operate. What goes on during the programmatic advertising process?
Keep reading to find out!
How do DSPs work?
When you use a DSP to find advertising opportunities, you’ll give the DSP some information on what you’re looking for, including:
- Types of websites
- Content topics
- Budgetary restrictions
The first thing your DSP will do is connect to several inventory supply sources where publishers have made their ad space available. It will then scour the options based on the criteria you provided to find the publishers that are most relevant to your business.
Your DSP will then begin automatically bidding on ad inventory for you, looking for the lowest prices and making sure to stay within the limits of the budget you provided. When it reaches a deal, it will get your ad up on the publisher’s website and begin tracking the results of the campaign.
How do SSPs work?
Much like DSPs, nearly everything SSPs do is automated. Publishers can set criteria for the kinds of ads they want on their site, and the SSP then sets to work putting the publisher’s ad inventory out on the market for advertisers and DSPs to find. It filters ads based on any criteria set by the publisher.
When multiple advertisers vie for the same ad space, the SSP will award the ad space to the highest bidder, driving up revenue for the publisher. It will then interface with the DSP to set limits on how often ads can be shown, what kinds of users to target, and so on.
Just like DSPs, the SSP will then track the performance of the ad so publishers can see how much value it brings to their website.
Review: What’s the difference between a DSP vs. SSP?
Now that we’ve walked through all the specifics, let’s go back to our original question — what’s the difference between a demand-side platform vs. supply-side platform? — and answer it by reviewing what we’ve talked about.
The two platforms are similar because both use automation to facilitate the programmatic advertising process. However, there are several facets that set them apart.
The core difference is that DSPs are for advertisers, while SSPs are for publishers. Additionally, while DSPs aim to keep costs low, SSPs help drive them up to produce more revenue. In that sense, they compete with one another.
However, the two platforms work together to make the magic of programmatic advertising happen.
WebFX can help you get the most from your programmatic advertising
Want some help with your paid advertising efforts? Don’t worry — WebFX has your back. With over 25 years of experience, we know how to drive revenue through advertising, and we’d love to show you firsthand what we can do for you.
With our paid advertising services, you’ll get help not only with programmatic advertising, but with paid search ads and more. We’ll get your products and services in front of the right audience to ensure that you make more sales and boost your revenue.
Join our mission to provide industry-leading digital marketing services to businesses around the globe - all while building your personal knowledge and growing as an individual.