A Tour of Online Display Advertising; DSP, DMP, RTB, Ad Exchanges

Ever wonder how a banner ad finds you?

Nowadays, exposure to banner ads continues to be rising.  With Facebook getting into the exchange business, it’s time to briefly review the display industry, focusing on demand side platforms, and how those ads appear on the websites you read.  By digging deep into the publisher-to-audience ad serving cycle, it’s amazing how many technologies exist with the goal to serve those banner ads to audiences most likely to be interested in your message, and capture the almighty click. 

Imagine- all of this serving and big data technology; in business to target messaging accurately as possible, and to increase that CTR from .02% to .04% and higher.  The low CTR of banner ads should never be the only measure of online display effectiveness.  By using analytics tools, you can measure reach, frequency, attribution, and affect on conversions.  Here’s an amazing chart detailing the major players in online display advertising.

  

My friends at WPP put together this nice diagram of how display works.

 

 

Let’s talk about DSPs.

 

DEMAND SIDE PLATFORM

A demand-side platform (DSP) is a system that provides the technology needed for advertisers to unlock the value of real-time bidding (RTB) information provided by ad exchanges. An ad exchange is a hub through which ad networks, and some large advertisers or agencies, can trade inventory within a single central marketplace. DSP’s serve as a single access point to RTB inventory from across all ad exchanges, evaluate sites and impressions against campaign targeting and budget criteria, and provide integrated ad serving and analytics for each winning bid. Popular DSPs are MediaMath, Turn, X+1, and The Trade Desk.

 

REAL TIME BIDDING

Real-time bidding (RTB) is a digital ad buying process that allows advertisers to evaluate and bid on individual impressions. Component of a DSP, ad exchange or network, RTB lets buyers use their own data and targeting options to bid for each ad impression. Advertisers can take factors such as site, placement, price, and user data into account when bidding on each impression. The winning bidder gets to serve the ad, which is often customized on the fly to better tailor the message to the audience. The entire bidding process for each impression takes less than 25 milliseconds!

 

FACEBOOK EXCHANGE

The DSPs now can buy ads on the new Facebook Exchange, a retargeting tactic.  Say someone goes to your website and doesn’t convert.  By working with an approved DSP, you can now target those Facebook marketplace ads to audiences who did not convert on your website.  So next time you recognize a Facebook ad from a website you’ve been on, you’ll understand how it got there!

 

Here’s a visual representation of a DSP’s role in display buying, again thanks to WPP Digital

 

 

YIELD OPTIMIZATION

Yield optimization is a technique utilized by ad servers to improve the performance of a given advertiser creative. In this technique the ad server tries to identify publisher impressions which are working well as per campaign parameters from the impressions that are not. It then tries to place more creatives on the impressions that are working and less on the ones which are not.  This solution makes the most of ad impressions that are otherwise ineffectively monetized. Yield optimization companies provide a solution which looks at each impression available on a web publisher site and then matches that impression with an available ad from one of the myriad of ad networks or exchanges. Examples of yield optimizer platforms are Admeld, Rubicon Project, and Pubmatic.

 

DATA MANAGEMENT PLATFORM

A data management platform (DMP) is a centralized data management platform that allows advertisers to create target audiences based on a combination of in-depth first-party and third-party audience data.  DMPs enable advertisers to consolidate online and offline customer data from various sources into a single location, then use it to create demographic and behavioral segments that can be used to target online advertising. Performance data from each campaign is then fed back into the DMP, creating a feedback loop that improves optimization efforts and can be used for related reporting and analysis. Examples of DMPs are Blue Kai, Exelate, and DataLogix. 

 

Here’s a sample media buy I was working on recently, showing specific audience segments I plan to target, with the help from the relationships DSPs have with big data DMP platforms.

 

GOOGLE DISPLAY INTEREST TARGETING

By the way, Google’s Display Network uses third party data DMPs as well when it comes to display interest targeting.  That’s what Google means when they refer to third-party data below in their help section.  So now you know!

 

 

One final graphic shows the breadth of a DSP; as you can see, there is tremendous reach potential by partnering with a DSP.

 

 

SUMMARY

 

Buying online display via a DSP has a number of advantages:

  • Higher message reach
  • Lower CPM/CPC
  • Integration with DMPs for specific targeting
  • More retargeting options
  • Efficient execution

 

Utilizing a DSP depends on your goals.  Buying ads direct through publishers or ad networks allow more premium inventory, at higher cost.  DSPs and exchanges usually bid on excess or available inventory.  It’s best to leverage the strengths of each form of inventory source, and balance between costs, inventory, and transparency.  DSPs and RTB strategies are ideal for overall branding and efficient inventory, but if you want better placements guaranteed, you may wish to compare DSPs with ad network targeting and technology.

 

Just have your goals in mind, and understand how online display fits into a purchase funnel.  Remember, search ads you find; display ads find you.  Now you know how banners find you. Let’s hope the message is compelling enough to interest you to click, or to build recall so that when you’re ready to buy, blame the banner ad for that persuasive impression.  Click.

 

About Paul Mosenson

NuSpark Marketing Founder, Chief Lead Generation Strategist and Online Media Director An experienced B2B and B2C marketer, Paul has been helping clients generate leads and grow their businesses for over 25 years. Paul helps plan and optimize marketing and lead generation programs.

1 Comment

  1. hopwood

    So… this is why my Facebook ads are always sooooo irrelevant… 🙂

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