AdvertisingListsPlatformsVideo SEOHow does Demand-side Platforms (DSP) work? A guide on DSPs for all beginners

Earlier, digital advertising involved more risks with lesser ad inventories and improper digital ad management platforms. Agencies, brands, and publishers bought digital ads and resources through salespersons and sellers.

The process of purchasing was mostly manual. Therefore, advertisers got limited inventories for specific ad campaigns at more expense. demand-side platforms

The traditional way of buying digital ads and sources were unreliable, expensive, limited, and slow. As there were no means to track and record the real expense, right target markets, and methods to advertise, the system failed a lot of expectations.

What is Demand-side platform (DSP)?

Advanced technology and developed algorithms have changed the way ads were bought, placed, and traced.

Demand-side platforms simplified purchasing and handling the ads inventories, thus, making it cheaper & reliable.

A Demand-side platform is an ad-buying ecosystem which aids in managing advertisements in an automated manner. It is a software meant for advertisers to purchase ads and manage ad inventories from several sources using a single interface.

The ad inventory buying is done using intelligent bidding software called the ‘Programmatic advertising’ that helps in the auction process.

These ad placements get auctioned within microseconds in a real-time bid. The price of each impression gets decided through this real-time auction, which is termed as the Real-time bidding’ (RTB). demand-side platforms

In the whole system, counterparts buying ads are termed as the “demand-side” while the media house owners & publishers are at the “supply-side”.

Thus, the Demand-side platform is used by advertisers to buy digital ads while the Supply side platform is used by publishers to sell their available ad inventories.

demand-side platforms
Source: Perengo

One of the significant purposes of the Demand-side platforms is to buy impressions on relevant inventory and display them to the targeted users at an optimum price.

This software is used by in-house marketing teams, advertisers, promotors, and ad agencies. Media buyers can get access to Ad networks, Ad exchanges, and several supply-side platforms on a single interface using the Demand-side platforms.

Buyers can purchase high-quality rich media, mobile ads, video, and native ads in real-time at best prices using the DSP’s.

The process of buying and selling digital ads gets accessible with the DSP’s and SSP’s because of its automatic operation. It makes the ad trading less time consuming, lesser priced, productive, and more profitable.

How does Demand-side platforms (DSP) work?

The functioning of the Demand-side platforms is technical and requires some attentive reading here.
While building an ad campaign buyers can use the tool to provide required metrics like age, gender, location, interests, incomes et cetera.

demand-side platforms
Source: Reklamstore

Now, the software will give a few options to choose from, to enhance the quality of an ad campaign that is getting designed. The ‘Daily Cap’ option allows an advertiser to distribute the budget for an ad in a day while the ‘Lifelong Pacing’ option lets them distribute budget over the lifetime of the ad.

Users can filter out the publisher websites as per choice too. Advertisers can create a blacklist of publishers that they would avoid. They can also block websites with controversial concepts to avoid getting their ads displayed there.

As DSP’s are self-serving platforms, therefore it is the advertisers who have to manipulate, optimize, configure, make changes, and tune the software. Fully serviced and managed DSP software are also available for users who need assistance in it.

To understand the total mechanism, supply-side platforms on the publisher’s end need an explanation as well.
Publishers make their ad inventory sources available on the DSPs, which connects to the advertisers. demand-side platforms

These ad inventories get auctioned in the real-time bidding process where advertisers can bid through the Ad exchange. The publisher sends an ad request via the Supply-side platform after the DSP wins the bid and displays the ad.

Buyers can now pick from the varied ad inventory placements from across publisher’s websites, apps basing the provided impressions.

Unlike previous DSP’s, the new generation software enables media buyers to consolidate the campaigns from different channels into one dashboard. Optimization, modulations, analyzing, and getting insights on all channels can be accessed from a single DSP.

Advantages of Demand-side Platforms (DSP) in Digital Advertising

1. Retargeting: The software has access to a large volume of information and inventory to recognize ad calls with publishers that an advertiser is searching.

It uses the demography, language, browsing behavior, device, context and personal data to study the relevancy of ads. Therefore, it targets the right market and can convert impressions by retargeting.

2. Global integration and broad reach: The data available on the Demand-side platforms make it available on most devices doing deals in multiple currencies.

Some DSP’s have links to Global ad networks which provide high class and premium level inventory to users.

3. Highly budget-friendly: Demand-side platforms allow small and medium level organizations to launch and maintain campaigns easily. This feature reduces the extra cost of third-party service providers. The pricing is based on separate impressions, i.e., CPM, CPI, CPC, CPA, and CPE, which reduces the cost. demand-side platforms

4. Right and relevant inventory: These Demand-side platforms, with its significant collection of data provides a range of ad inventory. The choice of inventory helps add to the success of Real-time bid.

5. Brand safety: The software allows users to optimize websites and select the right ones for the protection of their brand image. During the bid, advertisers can blacklist controversial websites, thereby avoiding the unnecessary & inefficient inventory.

It helps block fraud sites that are potentially harmful to the advertiser’s brand.

6. Campaign analytics: The Demand-side platforms software allows users to access multiple campaign channels on a single dashboard.

It provides a detailed track of engagements, views, traffic generation, click-through-rates, and more at one place.


Demand-side platforms are smart digital advertising processes. They are highly competent, advanced, and do not depend on other service providers.

demand-side platforms
Source: AdProfs

They have their team of developers, programmers, and engineers who design the algorithm and keep the software updated independently.

It is unbiased and compiles most data under one dashboard hence being easily accessible and simple.
The best part about a DSP is that it is customizable and users can make, break, change parameters as per choice.

Moreover, it is pocket-friendly, and any small and medium level business can get connected to global ad networks.

Also Read: 8 Types of Demand-Side Platforms (DSP) For Programmatic Advertising

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Salorita Mohanty

Peppy, chirpy, sane in her way. Sucker for wild travels & treks. Fond of murder mystery and non-fictional books. Open politics enthusiast and an agnostic atheist. Looks for wackiness in normalcy, adulting at her own pace!

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