Demand-Side Platform: What Is It and How Does It Work?

Demand-Side Platform: What Is It and How Does It Work?

Trapica Content Team

Marketing Guides
4 min read
April 29, 2021

For those with experience in digital ads, you’ll remember the days of buying them manually; for some people, this is still the chosen method. As you can imagine, in a world of technological advancements, this is now expensive and unreliable. We have all the hopes of launching an incredible ad campaign only to then learn we can’t buy enough inventories to make it work. 

As mentioned, this is a world of technological advancements and it means we now have DSPs (demand-side platforms) to help with the process. 

What’s a Demand-Side Platform? 

Rather than doing everything manually, DSPs are designed to make the ad inventory purchase process easier than ever. With a single interface, advertisers can not only purchase but also manage ad inventories even when they come from several sources. 

As with most things these days, this is achieved through advanced software. With all users coming together, an auction takes place to decide who earns each inventory. There are two main benefits of choosing a DSP for advertisers – a less expensive process and a more reliable system. 

When researching in this area, you might see the term ‘programmatic advertising’. Essentially, this defines the whole process used on DSPs. Using RTB (real-time bidding), ad placements are auctioned quickly with the whole process  taking only seconds from start to finish. 

As you may have noticed, the premise for DSPs is very similar to platforms like eBay and Amazon. The idea is to bring buyers and sellers together with advertisers (and those seeking ad inventories) on the demand side and media owners and publishers on the supply side. 

How Does a DSP Work? 

For the longest time, businesses and marketers were forced to buy their ad space on individual platforms. For example, they would go into the Facebook Ads system and create ads for Instagram and Facebook. Elsewhere, the Google Display Network manager allowed us to pay for Google impressions. The problem with this old-fashioned system is that we can only target one platform at a time. Thankfully, DSPs are completely independent of all media owners. Instead, they simply provide the software to collate all potential ad opportunities. 

As buyers, we look through the available opportunities and bid on the ones pertinent to our strategy. From here, it’s then a case of analyzing performance and managing ads. As mentioned, several networks are available in one place ultimately saving both time and money. 

When it comes to DSPs, some common misconceptions cause unnecessary confusion among prospective buyers. Perhaps the biggest one is that the DSP owns the media or ad space; this isn’t true. Instead, the DSP is solely a portal that holds the listings and facilitates the auction, bringing both supply-side and demand-side together based on defined criteria.  Think of it as a farmer’s market, the DSP is neither the farmer who brings his produce for sale nor the consumer that purchases the fruits and vegetables; the DSP is the guy who owns the market. 

In summary, publishers list their inventory on a supply-side platform and they then communicate with the demand-side platform to make the inventory available for advertisers. We mentioned that DSPs are similar to Amazon and eBay; the only difference is that there’s a platform on each side rather than only on one side. 

Benefits of Using a DSP 

We’ve mentioned a couple of the benefits already, but here’s a more extensive list of why you should consider using a DSP this year. 

Save Resources

DSPs are best utilized by those who have trouble managing campaigns because they’re active on several networks. The days of logging onto multiple different platforms are over because everything is accessible through one easy-to-use dashboard. 


As we all know, targeting is a key element of advertising and the good news is that DSPs excel in this area. There’s an increase in data and it allows users to personalize landing pages and ads themselves. As we tailor ads to the audience, they’re more likely to resonate and the conversions should come flooding in. 


We’re in a world of data, and those who know how to manage large amounts of data have the best chance of success. Most advertisers have access to vast amounts of data with a DSP because these platforms work with third-party data providers. Again, this is much more efficient than assessing data across several individual platforms. If necessary, you can also use a DMP or CRM to import your own data. 


Another misconception in this field is that DSPs don’t have access to high-quality inventory, which simply isn’t true. With the right DSP, you’ll have access to all the biggest media owners and networks. Before choosing a platform, research the market and look at those with all the networks you need. 


In recent times, DSPs have also earned a reputation for going above and beyond with support. Beyond the standard help, DSPs go the extra mile to help users which is ideal for beginners. 

Drawbacks of Using a DSP 

Unfortunately, no platform or solution will ever be perfect, nor will they work for all users. Therefore, we’ve compiled some potential drawbacks below. 


It’s fair to say that DSPs often come with a learning curve; the less experience you have in this field, the longer it will take to learn everything. There’s always a risk with aggregating data because it can complicate matters. We know some businesses and marketers who have tried DSPs only to revert to their original strategies. Especially for small businesses, DSPs lose value when you’re only interested in one or two networks. 


We mentioned small businesses, and another drawback is that DSPs are designed for those with a significant ad spend. If you’re only spending a couple of hundred per month, you’re better off going it alone still with Google Display Network. On the other hand, upwards of $5,000 is best accommodated on a DSP. 

DSPs vs Ad Networks 

We know, DSPs sound an awful lot like ad networks. In case you haven’t seen these either, ad networks compile ad inventories and allow users to buy them in bulk. Ad networks work for some, but there’s a feature that separates these and DSPs - real-time bidding. Unfortunately, this has been a problem for ad network users for some time. 

When using a DSP, advertisers bid on ad space in real-time. Additionally, extra features include stronger audience targeting settings and the ability to analyze and optimize on one dashboard. In terms of targeting, a DSP will often extend to contextual targeting, geo-targeting, retargeting, demographic targeting, keyword targeting, and device targeting. 

If you have a particular interest in retargeting, DSP offers value through volume. With a target audience in mind, DSPs can handle ad inventories in large quantities, and this means we meet marketing goals with less effort than before. 

Choosing a DSP 

With all of this in mind, all that’s left is to choose a DSP. The first thing you need to decide is whether you want a full-service DSP or a self-serve DSP. What’s the difference? With a full-service DSP, you may pay more money but in return, you get an account manager and expert assistance. Ideal for less-experienced individuals, account managers contribute to planning, targeting, budgeting, and more. 

Consequently, self-serve is designed for people who don’t need this assistance. If you choose the latter, you must have confidence in budgeting, targeting, bidding, and optimizing. With full control, the success of campaigns is down to you alone. 

Once you know the type required, it’s time to look at the options available on the market. Although this can get overwhelming, having a choice is always a good thing because it means getting a platform that fits your every need. Here are a couple of considerations to keep in mind: 

Ad Exchanges

We assume you want a DSP connected with lots of different ad exchanges - the more ad exchanges, the more daily impressions available. For example, names like Basis DSP have billions of impressions. Not only this, but they’re also spread across lots of different channels and devices. 


Not all data is equal, and each DSP will focus on either first-party data or third-party data. 

Other Factors

You should also consider the training required to get up to speed with a DSP, its cost, necessary interface, user experience, and the amount of support provided by each platform. We’ve seen our fair share of difficult and ugly interfaces in our time, but rest assured, with so many DSPs available, there’s no reason why you can’t choose one with a simple interface, lots of support, and which requires minimal training. 

With this, you now know the ins and outs of a DSP (and how to choose one that suits your needs!).

Learn how Trapica can help you automate and optimize your DSP ad campaigns

Marketing Guides
4 min read
April 29, 2021