Demand-Side Platform vs Ad Network: Which One Is Better For Media Buying?

Published in

Marketing And Growth Hacking

10 min readFeb 18, 2019

The duopoly of DSPs and ad networks explained

The landscape of digital advertising is always undergoing continuous changes. New technologies, companies, and solutions pop up every month and they all have their mission focused toward the online world.

This also refers to media buying platforms. On the one hand, there are plenty of them — and media buyers can easily find the traffic for even the most whimsical offers. On the other hand, the online advertising industry is already overcrowded. And sometimes media buyers spend months (and tons of dollars) to discover traffic sources with a worthy performance.

On this oversaturated landscape of online media buying, there are two avid competitors — ad networks and demand-side platforms. Both of them serve the same goal — provide access to online inventory and technically support the process of media buying. However, ad networks and DSPs do that in different ways.

The duopoly of ad networks and demand-side platforms in 2019 reminds the coexistence between Neanderthals and Homo Sapiens 70 000 years ago. The fact is that Neanderthals weren’t so weak and simple-minded as many people may think. If one of the Neanderthals and one of the Homo Sapiens met for a one-on-one fight — the Neanderthal would probably kill the Homo Sapien. Yet if these species stood 1000 in front of 1000 — the Neanderthals had no chance to survive. Why so?

The Homo Sapiens (we) have one thing that the Neanderthals weren’t so lucky to obtain. It’s abstract intelligence.

Abstract intelligence is the main reason why Homo Sapiens became the only species who have been dominating the world now. Hence, even with this game-changer in their pockets, they still needed 30 thousand years to conquer the planet.

Now let’s come back to ad networks and demand-side platforms. Similar to the Neanderthals, ad networks became the trailblazers in online advertising. In 1993 the first clickable banner with ads was delivered to the commercial website “Global Network Navigator”. Since the 1990s, ad networks started operating as middlemen between websites that wanted to monetize their space with ads and advertisers that aspired to promote their products and services online.

For better or worse, the monopoly of ad networks hasn’t been around for 30 000 years. By the end of the 2000s, programmatic companies appeared on the horizon. Demand-side platforms or DSPs sprung to life and became the main competitors of ad networks. In 2018 the US invested over $39 billion into programmatic ads which is 81.5% from the total display ad spendings in the entire country.

While many think that demand-side platforms represent the next level of evolution of the media buying platforms — they are not. Just like the Homo Sapiens weren’t the Neanderthals descendants, DSP is a completely separate branch of the evolution of online advertising. This is why DSPs are able to coexist alongside ad networks while providing more comprehensive and automated media buying.

In this article, we’ll explain how demand-side platforms differ from ad networks, uncover their obscure corners and find out which of the two may bring you to your advertising goals faster.

What is a Demand-Side Platform?

The demand-side platform or DSP is a technology that allows the buying of online impressions from multiple traffic providers in real time.

In other words, it’s a platform where users may promote their offers (services, products, goods, etc.) through setting up ad campaigns, managing performance and driving new leads.

For media buyers, the DSP is a gateway to hundreds of traffic sources like desktop and mobile websites, mobile apps, SSPs and ad exchanges. With only one DSP in a toolbox, the media buyer can reach the intended audience through millions of touchpoints at a time.

Most of the DSPs (MediaMath, Epom Market DSP, Sizmek DSP, etc) are self-serve platforms. That means that from the moment of signing up and until the daily report tracking the user has full control of what is happening to the DSP account.

Even though it may sound complicated, the DSP is built in a way to simplify media buying. It сarries extensive capabilities like audience targeting, automated optimization and real-time reports. For example, the Epom Market team developed the so-called Bidding Autopilot feature. As its name suggests, the Bidding Autopilot takes traffic bidding under its full control.

The user sets advertising goals for specific ad campaigns such as expected CTR, eCPM or cost per conversion. Later the DSP automates KPIs and lowers the bid for specific traffic sources if they don’t achieve set ad goals (or moves these publishers to the blacklist).

For allowing the Bidding Autopilot to guard their performance, the users only need to check the box in front of Bidding Autopilot in their DSP accounts.

Actually, this is how the DSP works; if you want to put something to work — just click on it.

All in all, the DSP creates the perfect setting for running multiple performance ad campaigns simultaneously and eliminates the human-factor aspect. The platform needs milliseconds to deliver the impression and to display results of the ad performance on a private dashboard.

3 Main Benefits of DSPs

1. Cost-effective online advertising

When buying traffic within a DSP, media buyers set a bid that they can afford to pay. Then the DSP takes this bid and offers it to publishers, SSPs and ad exchanges. Then the DSP purchases the impression that ideally matches the media buyers requirements.

As demand-side platforms have real-time bidding technology under the hood, everything happens in real time.

With this approach, media buyers don’t overpay for the traffic while simultaneously getting cheaper inventory without losses in their KPIs.

Although most DSPs integrate third-party data providers to empower businesses with insights into their audience. DSPs offer extended targeting features, like the age, interests, and other details about users. Data-based ads secure media buyers from purchasing irrelevant impressions.

2. Сomplete automation

The demand-side platform automates most processes that media buyers are dealing with. There are plenty of one-click options like mass copypasting, connecting to specific SSPs, retargeting, report downloading, etc.

The best part of it is that the DSP automates everyday optimization. This super feature exempts media buyers from babysitting daily analytics. The platform defines the best-performing traffic sources and gives them a higher priority while blacklisting publishers with poor results.

With the DSP everything is as simple as this: media buyer sets performance indicators and the platform ensures set goals are achieved.

3. Consolidation of media buys (ad server, anti-fraud protection, viewability, detailed reporting).

When the media buyer decides to break into programmatic advertising, a DSP is a perfect starting point. Why so?

Along with a DSP account, the users also get a technology, access to millions of screens around the world, the audience, performance tracking tools, protection against fraud and many more vital things. The DSP only needs your creatives and your budgets. Some DSPs provide functionality for designing your ad units also. For instance, the Epom Market DSP supports branding and designing native ads from top to bottom.

With only one DSP, media buyers may acquire mobile impressions, reach desktop screens and run video creatives at the same time. Keeping all ad campaigns in one place helps to understand which creatives work better and which ones are better to be excluded.

The DSP Profile

For whom are DSPs?

For advertisers and media buyers.

2. Onboarding Time

Signing up only takes a few minutes.

3. Pricing

The media buyer has control over bids, the price is directly proportioned to the quality of the traffic.

4. Transparency

100% transparent. Media buyers are able to choose, block and track the sources that send impressions to ad campaigns.

5. Optimization

Automated; handled and maintained by the platform.

Now let’s overview ad networks as platforms for online advertising

What is Advertising Network?

The first ad networks arose as companies that matched advertisers who wanted to promote their goods or services with the right audience through ads on specific websites. Of course, since the 1990s ad networks evolved significantly. Nevertheless, in 2019 their mission remains the same ‒ operating as middlemen between the websites (publishers) and advertisers.

Along with access to multiple websites, ad networks also offer media buyers the technology. Every ad network uses an ad server, one of the key elements that make online advertising possible. When media buyers sign up to a specific ad network, the latter provides them with two things. The first is access to the online inventory and the second is an account for tracking numbers and the results of ad activities. Up to this moment, ad networks seem very similar to DSPs, right? However, it’s not exactly so.

Ad networks provide users with access to accounts with more narrow capabilities compared to DSP accounts. This means that the media buyer is able to view stats or put ad campaigns on hold (not always). And the process of ad campaign set up, connecting to particular publishers, everyday optimization are resting on the shoulders of the manager who stays behind the ad network.

Unlike DSPs, ad networks have a lot of room for human work. When media buyers sign up for an account, they are assigned to the ad network’s manager. The manager is the one who takes the creatives and campaign details and then sets everything up on the ad networks side. So the media buyer saves time on all the hassle connected with the ad campaign launch.

For the most part, the work of account managers stays invisible. The media buyer just has to analyze stats on a daily basis. If ad campaigns or creatives need some improvements, the media buyer reaches out to his personal manager and asks to make changes. The volume of manual work behind traffic buying may vary for different ad networks. Some of them offer better-equipped accounts, other ones have only dashboards for checking stats.

This approach has both advantages and shortcomings. With ad networks, the media buyer doesn’t invest much time in the technical setup or everyday optimization as everything is already done for him (or her), but these services are not free. Usually, ad networks take a high margin and media buyers aren’t aware of how much they pay to the middleman and how much they give for the traffic.

With ad networks, a lot of things stay blurred. For example, users of ad networks rarely have enough luck to see names of publishers that send traffic to their ad campaigns. And they also don’t know how much the traffic really costs.

Nevertheless, advertising with ad networks still has its undeniable benefits for media buyers.

3 Main Benefits of Ad Networks

1. Access to top-ranked and niche publishers

There are different types of ad networks. For example, topic-specific ad networks sell traffic for particular kinds of offers such as business-oriented ads, automotive ads, or even fashion ads. Inventory-specific networks focus on mobile, desktop, video or native advertising. If someone wants to place ads on popular websites with millions of daily visitors, the publisher will probably forward you to a partner premium ad network. Affiliate networks are the best fit for affiliate activities and performance ad campaigns.

The world’s top publishers of the CNN or HuffPost level don’t trust their inventory to SSPs or ad exchanges. They also don’t sell it directly to advertisers. This is why ad networks encapsulate the only way to reach premium inventory. Although ad networks often help smaller or niche hard-to-reach publishers monetize their impressions.

2. An option of paying for clicks and conversions

While DSPs sell traffic for fixed bids, many ad networks have the option of paying for conversions, installs or clicks. In this way, media buyers may secure their budgets from underperforming traffic. For example, Leadbolt ad network offers users to benefit from running two separate accounts — one for CPM/CPC ad campaigns and another one for CPI advertising.

3. Save time on setup and daily optimization

Yet again, ad networks are irreplaceable when it comes to time-efficient media buying. If the media buyer doesn’t want to bother with the setup or optimization of ad campaigns, ad network teams may help with this for sure.

Ad Networks Profile

For whom?

For publishers and advertisers

Onboarding Time

From a few minutes to a couple of days, it usually depends on the response rate of a specific network.

Pricing

Usually fixed CPM prices regardless of the quality of the inventory. CPC, CPI, and CPA payment options are also available.

Transparency

Lower than 100%. Blurred reports

Optimization

Required, usually manual, but also automated.

Conclusions

To sum up, DSPs and ad networks are absolute must-try options for businesses that want to grow online. Especially for the ones that have already exhausted their social media audience. In the next couple of years, it’s expected that programmatic media buying will continue to soar but at a slower pace. Ad networks have all the chances to go to oblivion.

The Neanderthals and Homo Sapiens had been living side-by-side for 30 000 years. We don’t know for how long DSPs and ad networks are going to coexist, but we’ll find this out in the next 5 years.