Hari Shankar
Jul 22, 2011

OPINION - Demand side platforms - boom or bubble?

Hari Shankar, Asia-Pacific director at Performics, wonders if DSPs are a fleeting craze or here to stay.

Hari Shankar
Hari Shankar

There was a time when I remember signing up with DoubleClick Ad network and feeling proud on having acquired Display inventories online and feeling satisfied with the geo-targeting and content targeting capabilities of the network within IT communities. Proud because I was spearheading it at a time when online real estate selling models were still at their infancy and agencies & publishers alike were still struggling to justify exorbitant Online media dollars with clientele and flirting with multifarious models. And this was despite the hype and hoopla of the dot com era almost reaching a crescendo. And that was circa 1999.

Theory of Natural Selection:

No, I am not going Darwinian here but on reflecting a little deep in to the way Display impressions used to be sold by individual sites in that era to the way impressions are starting to be sold now via huge trading platforms, one can’t help but remember the Darwinian Theory.  How individual publishers coalesced in to networks and how networks are coalescing in to a new entity may be represented as follows:

Individual publisher > Representatives for multiple publishers > Horizontal Ad networks selling inventory across huge number of aggregated sites > Vertical ad networks targeting niches & interest categories > Auction based Ad Exchanges encapsulating both horizontal & vertical networks  > ‘Real Time bidding’ technology platforms encapsulating Ad Exchanges & Networks based on multiple selling models

So are DSPs and RTB just the latest progeny of Digital jargon that we live with daily or would there be more essence to it?

Real Time bidding and Demand Side Platforms:

A DSP (Demand Side Platform) is a technology platform that makes gargantuan pools of inventory available for advertisers who can do ‘real time bidding’ via a central hub (much like the Paid Search management consoles such as Google Adwords) in such a fashion that the advertiser decides how much to bid/pay for a certain ‘genre’ of inventory or impressions, that are sure to reach the ‘audience type’ that you want to target.

In its true sense, it is a technology that acts as matchmaker in the best interests of buyers on one hand and sellers on the other hand and the technology brings with it, a lot of goodies such as re-targeting, contextual type targeting, behavioral targeting so on and so forth that is available for advertisers based on multiple bidding models (impression based, Click based, Conversion based for example). For example, you may want to target only a certain Context /Theme based inventory such as SMB or you may want to re-target only people who have come to your site (or) abandoned carts on your site and in both cases, you would be willing to pay a premium that could differ depending on the markets that you want to cover.

The key differentiator between Ad Exchanges / Networks and DSP is the transparency by which advertisers can choose the inventory, set budget limits, tweak targeting criteria (audience segments), set frequency caps, control impression serving, have easy-to-use dashboards and overall, reach designated target segments with good accuracy with all ‘bells and whistles’.

Evolution is On-going. So is mutation.

Very similar to the way simple forums & BBS platforms evolved and mutated in to current gigantic Social platforms, DSP have already started evolving and mutating fast.

Talk about evolution and we find companies like SearchIgnite and Efficiency Frontiers who were quick at developing DSPs which have sophisticated technology that allows advertisers to have full attribution models between their Paid Search and Display Programs. These platforms offer media-buying optimization with predictive modeling, full campaign management and media trafficking, cross-channel attribution and analysis, and scoring for audience targeting and search optimization. While Paid Search programs largely focus on the ‘last mile’ alternative evaluation & Buy phases (and thereby used as a channel to drive conversions), DSPs are expected to efficiently fill in the role of driving Awareness / Interest / Consideration phases in the Consumer purchase journey.

Talk about mutation and we find the trend where Online Video networks have already started following the Display Network DSP trend. A good example is TubeMogul, which mutated in to a DSP offering real-time bidding on over billions of auctions per day across multiple formats, including pre-roll, in-banner, mobile and social media units. Yet another instance is where Mobile ad networks have quickly jumped in to the bandwagon and mutating in to Mobile DSPs, a good example being a company like DataXu which launched its mobile DSP service, integrating with inventory suppliers like Google, Admeld, Nexage.

In short, it not only makes Display Planning & buying as hassle-free as a Paid Search program but also allows marketers to look at Paid Search & Display working in unison towards defined objectives of Reach & Conversions.

Closer home, we have the likes of Google InviteMedia, Simpli.fi (a US based firm that has made the move to address the China market early) and Performics Audience On Demand (AOD) to name a few.

DSP -  Boom or Bubble?

As always, I will have to let time have the last word but if you ask my opinion, DSP technology is an evolution in the right direction which will provide an immense opportunity for marketers to see Digital audience targeting and engagement programs in a new light.

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