What Demand-Side Platforms Can Mean for a Media Plan

  |  December 14, 2009   |  Comments

A look at an approach that's designed to remove inefficiencies from the traditional display ad media buying model.

In my last two columns, I examined the exciting capabilities of real-time bidding (RTB) and the sources of RTB inventory, outlining the opportunity RTB holds for advertisers to achieve better performance from their online display campaigns. Along with these developments, a new category of service providers has emerged, offering advertisers a new way to purchase and manage auction-based media. These providers -- and their technology -- are both referred to as demand-side platforms. Their primary benefit? The advanced technology of demand-side platforms enables advertisers to make the most of real-time bidding capabilities across multiple inventory sources. As such, they play a key role in the evolving auction-based media buying model, and anyone considering RTB in their media plan should understand what they do and what benefits they offer. (Disclosure: I'm the CEO of a demand-side platform.)

Despite their decidedly unexciting moniker, what demand-side platforms can achieve is pretty compelling to anyone who has ever been challenged to improve performance and ROI (define) for an online display campaign. First and foremost, demand-side platforms are designed to give advertisers greater control over pricing, targeting, and managing their online media campaigns. Their mission is to eliminate some of the inefficiencies of the traditional display media buying model -- through automation and advanced analytics -- in order to make those improvements possible.

So what does a demand-side platform do, exactly? They typically offer the following common features:

  • A single system that connects to multiple ad exchanges and other media suppliers, accessed by a single user interface.

  • Campaign management tools to manually target or automatically optimize campaigns.

  • Automated bid management capabilities, often including real-time bidding.

  • Advanced analysis and "decisioning" about the value and desirability of ad impression opportunities.

  • Ability to capture and manage brand data and third-party data to improve targeting.

  • Control of budgets and campaign rates -- across all media sources.

  • Fully integrated reporting of campaign performance across multiple media suppliers.

How do demand-side platforms compare to some of the more common systems and media sources currently used in media planning? In the current display buying model, networks and exchanges selling ad impressions typically define audience categories, set pricing models, and require media buyers to access a different system for each provider in their media plan, across all of their campaigns. (That's a lot of passwords!)

Ad networks also have their advantages, but their inherent need to serve both publishers and advertisers means both sides have had to settle for less than ideal solutions. Demand-side platforms, in contrast, address many of the classic complaints about ad networks, offering advertisers better transparency, efficiency, and accountability. In fact, many have observed that demand-side platforms bring some of the favorable efficiencies of search engine marketing to the realm of display. As for ad servers, many offer significant operational efficiency, but demand-side platforms offer better media efficiency through granular targeting and valuing of individual impressions in real-time bidding. But both can work together easily, because demand-side platforms typically connect with any ad server.

Here is a summary of some of the key benefits of using a demand-side platform:

  • Access to multiple inventory sources through a single interface. As noted earlier, demand-side platforms deliver access to the large and growing inventory of auction-based media, meaning more availability of desirable display opportunities and, ultimately, better ROI. Better yet, some demand-side platforms can dynamically allocate buying decisions across exchanges based on market price moves.

  • Consolidated view of Internet audience. Access to such a large pool of display inventory offers unique opportunities for goals of reach and frequency. Demand-side platforms can enable frequency capping, behavioral profiling, and retargeting of users across a much broader portion of the Internet audience than a single network or exchange alone.

  • Real-time bid management. Beyond the sheer volume of targeting opportunities, demand-side platforms can also more precisely value each impression based on your campaign's goals. Ultimately, this can mean improved performance and ROI.

  • Campaign control. When managing a campaign across several media sources, consistent budget and rate control of a campaign can be difficult to achieve. To address this need, some demand-side platforms automatically manage and enforce your guidelines -- again, globally across all of its media sources.

  • Data management. Some demand-side platforms enable an advertiser to centrally manage collection and use of consumer data and even valuation of third-party data. This capability can save an advertiser a lot of time and money.

  • Reporting and insights. Along with an integrated campaign management interface, demand-side platforms also consolidate performance reporting across all media sources. This means that campaign results are derived from a broader pool of media and based on a consistent buying model. These insights, therefore, are more meaningful than trying to "connect the dots" across performance reports. Even the best analytics software can't fully account for different buying algorithms that may be used with each ad network, ad exchange, etc. when campaigns are run separately.

If you're managing display campaigns and are interested in the benefits of real-time bidding, demand-side platforms are definitely worth serious consideration. You really can't get the full benefits of one without the other.

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ABOUT THE AUTHOR

Mike Baker

Mike Baker is president and CEO of DataXu. He has been pioneering digital media platforms for 20 years and is a widely recognized thought leader in interactive advertising. Before cofounding DataXu, he was vice president at Nokia, where he created and ran Nokia Interactive. Baker came to Nokia through its acquisition of mobile advertising leader Enpocket in 2007, where he was the founding investor and CEO. Baker was previously a partner at venture capital firm GrandBanks Capital. He has also been executive vice president at CMGI and Engage Technologies, an innovator in online advertising and behavioral targeting. Baker holds degrees in law and telecommunications management.

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