In today’s fast-paced high-tech world, it’s hard to believe that ad sales were once conducted via human sales representatives that often would negotiate placements and prices face-to-face or over the phone. Over the years, these transactions have become increasingly automated, and the current in-app advertising landscape is now ruled by technology platforms that utilize real-time bidding to complete transactions in just 200 milliseconds.
Due to the complexity of the real-time bidding process, there are several different platforms at play in completing these transactions. In a previous blog post, we explained the difference between SSPs and ad networks. Today, we will look at the differences between supply-side platforms (SSPs) and demand-side platforms (DSPs).
Defining Intermediary Roles: SSP vs. DSP
Let’s start by defining these two roles in the in-app advertising supply chain.
What’s an SSP?
A supply-side platform (SSP) is a programmatic technology platform that connects directly to digital publishers. In the case of in-app advertising, this would include app developers and companies that have their own apps.
SSPs enable these publishers to auction off their inventory, fill it with the winning buyer’s creative, and earn revenue. The goal of the SSP is to maximize their publishers’ ad earnings (eCPM) and fill rate. The SSP accomplishes this by making publisher inventory available to a variety of buyers, including DSPs, ad networks, ad exchanges, agencies, or even directly to advertisers.
What’s a DSP?
A demand-side platform (DSP) allows buyers of digital ad inventory to manage multiple ad exchanges via one interface. These buyers commonly include trading desks, agencies, or advertisers directly.
To enable these buyers to bid on digital inventory, the DSP has to plug into an SSP. This programmatic advertising supply chain is visualized in the graphic below.
The Mobile Programmatic Supply Chain
And What’s a DMP?
Another initialism that often causes confusion along the programmatic supply chain are data management platforms (DMP). DMPs serve as warehouses of data in which the wide range of activity occurring across DSPs, ad networks, and exchanges can be tied together in one centralized location. Ad buyers can then use this data to optimize their future purchasing decisions and creatives.
What’s the Difference Between a DMP and a DSP?
A DMP is just used to compile, store, and analyze data. DSPs then use that information to actually buy ad inventory. DMPs can also connect to SSPs, for example, to enable publishers to optimize their eCPMs and fill rates. In this way, a DSP, SSP, and DMP can all work together along the programmatic supply chain to serve an ad.
DSPs, SSPs, and DMPs are all integral players to the in-app advertising world. By operating together, they enable the automated selling and buying of digital ad inventory on a scale never before possible. While many different configurations between these three players are possible, they each serve a unique function that has shaped today’s in-app advertising ecosystem.
If you would like to learn more about in-app advertising and the programmatic supply chain, check out the In-App Advertising Playbook.