DSP, SSP, and Ad Exchange: What is the Difference?


The difference of DSP, SSP, and Ad Exchange

Are you new to programmatic? Are you already feeling lost with all the terms and jargon? 

Then this article is for you! 

In this article, we aim to give you a clear understanding of the key programmatic players and how they interact with one another. 

Ready to learn? Then let’s start from the beginning.

What is Real-time Bidding?

Real-time bidding is essentially an auction where ad impressions are sold and bought, in transactions that take milliseconds to execute. Although the terms “RTB” and “programmatic” are often used interchangeably, they are not the same. Programmatic is the umbrella term: it is the technology that automates the decision-making process of media buying, through targeting specific audiences and demographics. RTB is simply how advertising inventory is bought and sold on a per-impression auction basis.

The Three Players of RTB

To understand programmatic, you need to be familiar with the following terminologies and understand how each component fits into the programmatic landscape:

  • Supply-side platform (SSP)
  • Demand-side platform (DSP)
  • Ad Exchange

What is an SSP? 

Supply-side platform or SSPA supply-side platform helps publishers (who might also be app developers supplying ad space) monetize their advertising inventory/apps. It enables publishers to make their advertising inventory available to ad exchanges, and it sets controls to maximize revenue yield on their impressions across all demand sources. This includes setting minimum pricing levels, rules for allowed advertisers and accepted categories, ad types, and more.

What is a DSP? 

Demand-side platform or DSPA demand-side platform is the SSP’s counterpart on the advertiser side. Brands (or app developers who want to advertise their apps) can use DSPs to set up their campaigns and define their terms for maximum bids, budget caps, the target audience parameters and, their campaign goals. DSPs differ depending on their inventory scale (determined by the number of partnerships they have) and by their technology used to execute the buy (their infrastructure, bidding, and optimization models).

DSPs are used by advertisers to buy ad impressions from exchanges as cost-effectively as possible; SSPs are used by publishers to do the opposite - to maximize the yield for their inventory. 

We have gathered below some of the benefits you can achieve by partnering with a DSP: 

  • A single interface to launch, manage, and optimize all your campaigns
  • Access to thousands of ad placements at once
  • Rich audience targeting capabilities
  • Real-time insights
  • Access to the most vital metrics to analyze campaign performance
  • More effective budgeting

What is an Ad Exchange?

Ad exchangeAn ad exchange is what allows these two sides of the same coin (SSPs and DSPs) to connect with each other. It is a neutral, autonomous platform that enables the entire buying and selling process via real-time auctions.

 

How do they Interact with One Another? 

Below is a simple illustration of the RTB auction process.

Real-time bidding or RTB auction process

In reality, it is much more complex due to several reasons: 

  • the same app developer can be both a publisher and an advertiser 
  • a single publisher can be connected to multiple SSPs
  • an advertiser can be connected to multiple DSPs
  • a single DSP or SSP can be connected to multiple ad exchanges. 

On a side note, the industry does not operate consistently across all markets. While American ad tech companies handle either the DSPs or the SSPs, the APAC ad tech players serve both sides, and local advertisers might have their own DSPs, while some publishers build their own SSPs.

How Does Aarki Help Advertisers?

Aarki is a 100% real-time bidding demand-side platform. As a DSP, Aarki is focused on delivering performance at scale across the entire marketing lifecycle, from acquisition to re-engagement, which means that we work with many of the biggest and most successful developers. We also have integrations with all the major global exchanges for RTB, which enable us to access inventory across the globe from our five data centers. To drive performance, we activate our data assets through proprietary machine learning algorithms and engage users in real-time with personalized creative.  

Would you like to learn more about programmatic, or how can Aarki help you grow your app? Keep an eye on our Insights page. 

Topics: Marketplace Insights