Over the past 15 years, the need in the Internet advertising market has rapidly changed—shifiting from separate ad server and ad network technologies to full ad exchanges, which incorporate them both. And the principles of advertising sales are shifting, too, from selling placements to selling data about the visitors themselves.
Market trends point to the need for Ad Exchanges with robust DSPs—demand-side platforms—as the future, because they give buyers and sellers the ability to value inventory on an impression-by-impression basis with real-time bidding.
In DSP platforms, the cost of advertising space is determined through auctions among all the different parties using a real-time-bidding technology—one that provides a marketplace for online ad auctions to occur instantly.
It’s a Supply Problem.
Today, most of the ad market is occupied. Supply is limited. Demand is high—and growing every day. Analysts predict it will take new demand-side platforms with real-time bidding to handle the bulk of this demand, going forward.
The under-supply situation in digital advertising is due to three major changes over the last 15 years:
- Improvements to systems that gather information about visitors
- Improvements to systems that analye user and consumer behavior
- The rise of social networks, which have made online advertising more attractive to brands and businesses—and far more attractive than the space the new networks created
Advertisers can now identify specific visitors and analyze a lot of their information, things like:
- Social status
- Specific areas of search or ??interest
As this information gets more plentiful, competition for ad space with access to those better-understood consumers gets even more competitive. It’s time for real-time bidding!
What’s In A Real-Time Bidding System?
Perhaps the most critical component of the system is the DSP, which focusses on advertisers—the people who seek to buy. But a good Real-Time Bidding system should include several elements, including:
- DSP—a demand-side platform for the advertisers, which allows them to shop for ad space on one or more ad exchanges
- SSP—a supply-side platform for publishers, usually combined with an ad server, that allows publishers to get ad supply from multiple ad exchanges.
- Ad Exchange—a platform for interaction between publishers and advertisers.
- Data Proviision—a system that provides extensive information about visitors to both publishers and advertisers
The ad exchange system imposes restrictions on the time of the auctions in the DSP platform. This time is usually in the range of 50 to 100 milliseconds. A DSP system must therefore work extremely fast to pick up many factors (or «target parameters») for many different advertising campaigns, hold an auction, and to give an answer to the ad exchange.
DSP Is More Than Raw Speed.
The DSP system must also be integrated with existing ad exchanges and data providers, working through the API.
The Internet Advertising Bureau recognizes a standard for this integration between the DSPs and ad exchanges called OpenRTB protocol. Research shows most major providers do not currently use OpenRTB, although many say they plan to move toward its use in the future.
But the development of DSP is much more difficult than the development of ad server systems. DSP requires expertise from developers and is a full order of magnitude more demanding of physical resources, like servers and communication channels.
We Are In Forefront of the DSP Trend
Based on our experience with enterprise-level ad management systems and having understood the direction the market was heading long ago, we began designing our DSP systems with full faith in their future.
And that future is here.
I’m happy to announce the final development phase of our new ad exchange system is underway—built using OpenRTB protocol and integrated with DMP providers. We have completed the design phases and, pushing ahead, cannot wait to release our new ad exchange to the market.
Better advertising and better business are in store for everyone in online advertising. And we were fortunate to be ahead of the curve on the DSP migration, striving to bring real-time bidding to our customers the right way from the beginning.
Look for our new release soon!
And if you have any questions, please leave a comment or contact us directly. We’d love to hear your thoughts about the challenges and the opportunities you see with DSP in your business.