Demand-side platforms, or DSPs, work hand-in-glove with advertisers, media buyers, and trading desks, offering them a window into mobile audiences.
DSPs have become increasingly influential within the mobile advertising ecosystem. (Recently, Adfonic, a well-known ad network, launched a mobile demand-side platform of its own.)
To get a fuller take on the role DSPs are playing, BI Intelligence recently interviewed Alex Rahaman, CEO of StrikeAd. StrikeAd has a unique vantage point, having created the first DSP dedicated entirely to mobile. BI Intelligence has separately produced multiple reports on the Mobile Advertising, breaking down the entire mobile advertising ecosystem, and analysing what is currently holding mobile advertising back.
Here are some excerpts from our interview:
- Mobile DSPs like StrikeAd are a relatively new phenomenon: DSPs function similarly to ad networks, in the sense that they help match advertisers with inventory. “What you effectively had in the early days of mobile was different mobile ad networks competing to secure inventory,” said Rahaman. “This model, where a buyer goes to a supplier who aggregates lots of sites and apps, has been very important in mobile. So when I started StrikeAd in 2010 we went one stage further. We became a DSP (demand-side platform).”
- The main difference between a DSP and a mobile ad network is simple: it’s the DSP’s relationship with the buyer. “What the buyer — the advertiser, the ad agency, or the trading desk — wants to do is to buy exactly their desired audience with the minimum wastage, and at the best price,” Rahaman detailed. “The agency doesn’t really want anything else but that. The DSPs are on their side helping them do that.”
- The presence of DSPs allows for efficiencies to be created: Ad exchanges are primarily supply-facing at the moment, and have relatively few interactions with mobile ad agencies. They work to find as many buyers as possible and to make inventory as attractive as possible. Ad exchanges combined with DSPs to create a “more efficient market” says Rahaman. “On one side there’s the buyer, and the DSP — and on the other the seller and the SSP (supply-side platform). Auctions also make the market more efficient. The auctions are a new piece where real-time bidding comes in.”
- Key innovations have made this possible: The emergence of DSPs representing buyers, combined with real-time bidding capabilities and the creation of mobile cookies used to track users, has created an environment where “as a buyer, you can now identify a user who used a certain site or an app, and made — or nearly made — a purchase, or showed some prior interest in your brand. We really want that user. We’re going to pay more for that user.”
- Explain how the mobile ad ecosystem is fractured and complex
- analyse how mobile ad networks play a central role that is coming under threat
- Examine how demand side platforms and mobile ad exchanges are streamlining the market
- Break down how real-time bidding will play a growing role
- Detail how agencies are coming around to mobile and are trying to bring big brands along
- Explain how new companies are emerging with native ad formats that are hoping to upend the traditional banner ad
- Explore the “monetization problem,” in terms of both the challenges to revenue growth and the trends working in the industry’s favour.
- Outlines what is being done, and what needs to be done, for the mobile advertising industry to grow more quickly