June 21, 2017 by Sara Jabbari
What are SSP and DSP?
While ads were traditionally bought and sold by human sales representatives, these transactions have increasingly been automated. This new process, referred to as programmatic advertising, is both cost-effective and efficient in matching advertisers with their target audiences on publishing websites. Two of the most common ways of selling and buying ads are through supply-side platforms (SSPs) and demand-side platforms (DSPs).
A supply-side platform (SSP) is a software used by publishers to sell inventory to advertisers at the highest possible rates. By connecting publishers’ inventory to ad exchanges, ad networks and DSPs - the SSP counterpart for advertisers - impressions are sold to the highest bidders through automated auctions. SSPs are useful in instantly connecting publishers to a large range of demand sources, allowing them to monetize unsold inventory at competitive prices. This supply can include display, native, and now, video ad inventory on both desktop and mobile devices.
As advertisers prioritize video, video supply-side platforms (SSP) have become the newest addition to programmatic solutions, building off of existing supply side platforms to include video. Video SSPs work in the same way as SSPs but are integrated with video ad servers because they are only concerned with video inventory on publishers’ websites, including display and native out-stream as well as in-stream video ads. However, because video inventory is still relatively scarce - compared to display - the vast majority of these transactions are made in private market places (aka PMP), where premium publishers offer their ad inventory to an exclusive group of buyers, or through direct sales, at premium rates.
Today’s major supply-side platform companies include AppNexus, Rubicon Project, Pubmatic, and OpenX, while leading video SSPs include Freewheel, SpotX, VertaMedia, Altitude, Smart+ and Beachfront.
Demand-side platforms (DSPs) are to advertisers what SSPs are to publishers. DSPs are used by advertisers and agencies for buying advertising inventory from suppliers, i.e. online publishers. Like SSPs, they operate automated, real-time auctions. DSPs connect to ad exchanges or SSPs, giving advertisers access to a multiple ad networks, and bid on advertising space at the best possible rates, taking into account advertisers’ maximum budget and targeting requirements. DSPs are used to buy many types of online advertising, such as display, video and mobile ads, but can also be channel specific. Most of DSPs also come with capabilities for tracking the success and expenditures of advertisers’ campaigns.
Major DSP companies include DoubleClick, TubeMogul, Invite Media, DataXU, Turn, Rubicon Project, BrightRoll, Videology, StackAdapt and MediaMath.
By removing the possibility of human error, and saving both time and resources, SSPs and DSPs have created huge opportunities for publishers and advertisers, and are becoming standard ways of buying and selling inventory. However, until more premium video ad inventory becomes available, it is likely that publishers will continue to sell this inventory to a limited set of advertisers in invitation-only auctions.