If you could take a step back in 2005 to see how the digital ads were bought and sold, you’d be surprised to notice how different the process was from what we have today. Brands had to hire media-buyers or sales reps that nourished direct relationships with publishers and web source owners. The contracts were written out in Excel and then sent through Gmail boxes. After this, the ad publishing was entirely transferred to the hands of website owners.
In 2020, however, advertisers have the ability to log into the programmatic demand-side platform to identify exactly where they want to run the ads, without sales reps, negotiations, and contracts. More importantly, these platforms enabled ad personalization – the algorithm that serves the right message to the right people and at the right time. Let’s dig deeper into all strengths of DSP to understand how it increases advertising ROI, prevents overspending, and delivers outstanding user experience.
Strength #1 Automation
A demand-side platform is a technological platform for advertisers that utilizes a programmatic algorithm for purchasing and selling ads automatically and in real-time. Demand-side platforms connect brands and advertisers to the sources of inventory globally: websites, news portals, blogs and other web sources whose owners strive to monetize their traffic.
The media owners, in turn, put their inventory slots on SSPs (supply-side platforms) to reach the global pool of advertisers and immediately transact the deals, typically through real-time bidding auctions. The ad of the advertiser whose bid wins at auction is served on the web source.
This is the power of automation. The system allows myriads of publishers and brands to interact in real-time, providing a much larger scale for the media-trading. Thanks to the OpenRTB protocol, any brand gets the opportunity to place advertising content on any website – from small niche blogs to big news portals. Meanwhile, the most monotonous and routine processes are getting automated by DSP: from setting campaign parameters to defining appropriate bid per impression and actual bidding at auction.
Still, the ad serving process on DSP is much more than this – targeting is the most important thing that defines whether DSP will bid or not on a certain impression.
Strength #2 Precise targeting
When a user opens a webpage with the available advertising space on it, it triggers a notification about ad slot availability. The auction for this particular customer is then held among those advertisers who are interested in showing the ad to this user.
How does the algorithm define that? Thing is, when advertisers configure the ad campaign on DSP, they can select the targeting criteria: geo, language, age, gender, IP, zip code, traffic type, gadget brand, operational system, time of the day, and so forth. Matching this targeting criterion with browser cookies of a particular user, the system can define whether the ad can be relevant to this user.
At the same time, targeting in programmatic goes far beyond the cookies data. Customer data platforms, data-management platforms, and other data aggregation systems open up endless opportunities for improving targeting precision. Gathering third-party, second-party and first-party data they can enrich available data on DSP and facilitate execution of hyper-personalized campaigns based on user behavior.
Thus, the utilization of big data allows programmatic technologies to determine accurately if the ad will strike the interest of a particular visitor. If it does, the system will bid on an impression and then serve the ad to the user at the most appropriate time and channel. As a result – ad budgets will be spent only on most relevant impressions while users will see only the most interesting ads they are more likely to convert with.
Strength #3 User experience personalization
While 88% of сustomers note that weight a personalization for making the right purchasing decision is tremendous, 73% choose companies that actively personalize their customer experience. Collecting the data from website visits, past purchasing history and modifying offers according to this data is no longer enough to cause true user engagement.
Hyper-relevant customer experience is based on a deep understanding of both motivational and emotional components of the customer journey. Consumers value companies that pay attention to the slightest details of advertising personalization.
For example, the customer is at home, and their devices are connected to the same home network. First, they search for a “horror game” on PC. Then, they look up the “horror game” on the phone and the Android tablet. The network tells us that this is a user from previous searches. Then, the system serves them the playable ad which features a new horror game for their mobile OS. Bingo! The ad helps the user find what they searched for.
This way, the targeting settings that advertisers chose in DSP bound with the correct ad format may directly impact the effectiveness of the campaign. There are plenty of ad formats you can find on demand-side platforms each of which can suit a particular channel and help to achieve a particular advertising purpose. Most popular of them are:
- Rich Media – aka interactive banners. A format that is far superior to standard banners as it supports media elements, in-built video included. They are memorable and perfectly fit brand-awareness campaigns.
- Playable format – showcases the new (advertised) mini-game inside of the actual mobile game. The user can play the promoted mini-game and then download the full version. Excellent for in-game CPI campaigns.
- Video ad – one of the best formats, especially when the product or service has a lot of details to feature. Video advertising effectively attracts attention and works for brand-awareness campaigns.
- Native advertising – a popular advertising format that is not blocked by adblockers, it naturally fits the design and style of the website.
- Rewarded video – in-game ad type that pops up to the user screen at specifically designated intervals. It offers in-game bonuses for the ad watching which significantly increases video completion and engagement rate.
Strength #4 Omnichannel reach
Last year revealed curious statistics. It turns out those customers that interact with brands both online and in-store spend 15-30% more than those who e.g only purchase online (come from one channel). Only 20% of single-channel purchases are made online. In contrast to this, the omnichannel shopping experience significantly increases both online and in-store purchases.
By investing their budgets into the new omnichannel digital infrastructure and mobile marketing, advertisers can reach the opportunities of advertising both online and in-store. A DSP can target the users across digital channels, but it can also make wonders when it’s necessary to suit particular ad messages up to the point and place.
For example, mobile devices are an integral part of our lives. Smartphones can gather a lot of customer data that may become valuable for location-based advertising. Just imagine, you can target specific places or even your competitor stores and your target audience will receive hot offers and time-sensitive discounts right where they stand.
Geo-targeting technology is one of the targeting options that are available on demand-side platforms. It uses geodata like GPS to determine the current location of users. The location-based message is triggered and sent to those users whose online profiles match selected targeting settings. Some DSPs also use geofencing, in such case, the message delivery is solely bound to a certain selected area.
Anyway, the ultimate purpose of such location-based messages is to attract customers to the brand outlets or brick-and-mortar stores. The results of such campaigns often bring benefits and greater revenues to the advertisers since their customers are far more susceptible to ad messages when they stay nearby.
Strength #5 Campaign measurability
The biggest struggle of placing ads manually is that you don’t know how your ads perform, what triggers response among visitors, what doesn’t, how many clicks and conversions your ads get during the period and so on. Meanwhile, there’s nothing else like reporting that comes handy when you plan your next ad campaign and want to learn something from the past ones.
When you go omnichannel, the correct attribution allows you to evaluate the contribution of each advertising channel to the final result achievement. The target action for such campaigns can be measured in the number of views, clicks, conversions, etc. Measuring advertising campaign on the demand-side platform you can find out which channels provide you more profit: mobile, in-app, desktop or CTV.
Knowing that some channels work for your brand particularly well, you can invest in them more actively. Apart from this, programmatic advertising platforms like DSP are able to generate performance statistics in real-time.
So, in case you’re constantly monitoring and analyzing changes in the reaction to your advertisement, you will be able to respond to these changes timely and modify the campaign flow on DSP as soon as possible.
Demand-side platforms were designed to bypass the daily grinds of manual media-buying. With the power of automation, targeting, and campaign controls DSPs do it quite well. Smart programmatic platforms decide whether an impression is worth bidding, evaluate each impression based on big data, arrange bidding and ad serving processes altogether. This way, DSP provides digital advertisers with everything that they need in order to manage campaigns in a highly-competitive and dynamic environment.
Irina Kovalenko is a CMO at the global programmatic development company SmartyAds. Dealing with marketing and advertising technologies on a daily basis, Irina learned how to entwine her multidiscipline experience into tech-based strategies to intensify business effectiveness and profitability. For now, she strives to share her knowledge with readers.