A Geek's Guide to the Demand Side Platform
Amazon’s Demand Side Platform was born out of brands expressing a strong desire to sell their products to audiences and potential customers more effectively.
So why has it historically been so ineffective to sell products to consumer audiences? While brands often sell directly to audiences in Business-to-Business (B2B) sales, it’s much less common for Business-to-Consumer (B2C) brands (i.e. toothpaste, batteries, t-shirts, water bottles, groceries, etc). Think about it - could you imagine receiving telemarketing calls from Colgate trying to sell you toothpaste? Likely no.
Since consumers strongly dislike being bombarded with sales pitches for B2C products, advertisers can use Publishers (also known as Content Producers and Aggregators) to reach audiences.
What are Publishers?
Publishers broadly include any entity that creates, aggregates, or shares content. Examples of Publishers include Rolling Stone, CNN, Facebook, ESPN.com and YouTube.
By reaching audiences through Publishers, potential customers are more likely to engage with marketing and sales efforts from brands without feeling like they’re being sold to. You’re much less likely to be annoyed by Colgate if you see an advertisement while reading your favorite news article than if they called you multiple times a day with a sales pitch - am I right?
How do I know which Publishers to work with?
There are a growing number of Publishers out there, and this makes it difficult for advertisers to know which Publishers to work with to reach their target audiences efficiently. What’s more, audiences consume content from many different Publishers, which makes it tough for advertisers to know which audiences they’re reaching and how many times they’re reaching them.
That’s where Ad Exchanges come in. Ad Exchanges were created to help Advertisers and Publishers work better together by standardizing ad formats, rates, tracking, and reporting. Exchanges enable brands to advertise through more Publishers easily. They also enable Publishers to make their advertising inventory (places in and around their content where brands can show ads - like commercials, display ads banners and pre-roll video ads, etc.), available to more advertisers.
With Ad Exchanges, Colgate could show you one ad banner on CNN.com, one ad banner on Facebook, and one video ad on YouTube without having to work directly with each of those Publishers.
Let’s add some complexity into the mix…
Since audiences consume so many different types of content nowadays, there are more types of Publishers than ever before. For example, a Publisher could produce and/or aggregate content in the form of a mobile app to a social media site to an online game to a video sharing platform, and more.
The gap between producers and aggregators is more blurred now than ever before, as well. And there are an increasing number of entities that do both production and aggregation. Let’s take Netflix, for example. Netflix produces its own content and syndicates content produced by others. Another example is LinkedIn. LinkedIn aggregates content on its site by letting users share content published just on LinkedIn.
This added complexity not only increases the number of Ad Exchanges that Advertisers and Publishers can work with, but it also opens up the possibility that brands could reach their Audiences more efficiently if they could decide whether to show a video ad, a mobile ad, a display ad banner, an ad in an email inbox, or a native ad as an advertorial. That’s why two additional layers were created in the path between Advertisers and Audiences:
Here’s where the Demand Side Platform comes in.
The Demand Side Platform allows advertisers to reach their audiences efficiently and effectively across many Publishers - this includes Publishers with different types of content and ad inventory, and ones that are content producers and/or aggregators.
DSPs provide advertisers with highly customizable controls regarding how to target, where to advertise, what ads to show and when to show those ads. They also provide brands with the ability to programmatically (i.e. use automation) save money and drive more sales from potential customers by using machines to increase efficiency across the entire path between advertisers and audiences.
Using our Colgate example again, with a DSP, Colgate can ensure that they only show their ads to potential customers who are about to run out of toothpaste. Colgate can also use machines to find the most cost-effective way to reach those potential customers with each advertisement - whether it be an ad banner, video ad or mobile ad.
DSPs are powerful tools for brands. Each DSP has different features and benefits, but they all share one common capability which is to help brands reach their potential customers without having to work with thousands of Publishers at once.
If you're curious about DSPs in general, or Amazon's DSP, reach out to us at Amplio Digital today.