DSPs, SSPs, RTBs, DMPs - Online Media's Newest Alphabet Soup

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If audience size is any indication of a topic's popularity, based on the "Ad Networks, Exchanges & DSPs" session at last month's ad:tech NY conference, the topic must be all the rage – the session was standing room only. I think the elevated attendance level was in part from curiosity and in part due to a burning desire to really make sense of what has otherwise been seen as a confusing and complex side of the online advertising business. Admittedly, my motives were split, and I probably came away with more questions than answers. After doing some additional research, I aim to simplify this subject for the rest of you too.

First off, I want to give kudos to session moderator (and fellow ClickZ columnist) Adam Cahill for breaking down and concretely organizing what could have been a pretty overwhelming topic - just check out this collage of display ad technologies!

Cahill led off with a few great nuggets:

• 90 percent of online ad inventory goes unsold
• Google Ad Exchange (AdEx), only a little more than a year old now, is the most important player in the market, though not the biggest…but "they're really withholding a lot of information right now."
• (Ad) agencies are very willing to talk with clients about exchanges and DSPs, but "most of what they say is inspirational."

Ingredients of the Soup

Before I move on, let me give you some basic definitions:

Ad exchange: An open online advertising marketplace that lets publishers and advertisers connect (think of a stock exchange). The inventory offered in an exchange isn't necessarily premium inventory - it's whatever the publisher wants to make available.

Ad networks: A closed advertising marketplace where the network owner disintermediates the publisher by sourcing and selling/reselling ad inventory to buyers (though sometimes publishers can also create their own ad networks).

SSP: The supply-side platform enables publishers to "plug into" the ad exchanges to make their inventory available. Through SSPs, publishers hope to gain the highest eCPM for their inventory, as opposed to selling it at low-cost remnant prices.

DSP: The demand-side platform allows advertisers and ad agencies to more easily access and efficiently buy ad inventory off an exchange because the DSP aggregates inventory from multiple ad exchanges. DSPs eliminate the need for another cumbersome buying step, the request for proposal (RFP) process.

RTB: Real-time bidding enables ad buyers to bid for each and every ad impression - based on campaign goals, audience profiles, and cost thresholds - which when won is instantly served on the publisher's site. The fulfillment technology enabling these dynamic transactions is called a "bidder" and can be built into any of the above platforms.

DMP: The newest introduction to the alphabet soup, a data management platform helps all parties involved in the buying and selling of ad inventory to manage their data, facilitate the usage of third-party data, enhance their understanding of all this data, pass back data, or port custom audience data to a platform for even better targeting.

Who's In the Pot?

Ad exchanges: Besides Google AdEx, the most popular are:

• Right Media
• AdECN (owned by Microsoft)
• AdBrite
• OpenX

Ad networks: There are over 200 ad networks, though most are blind, meaning the buyer doesn't necessarily know what sites or portions of sites are brokered by the network. Two transparent networks are Interclick and Collective.

SSPs: Include AdMeld, Rubicon, and PubMatic.

DSPs: Though apparently more and more companies (including in-house departments of ad agencies) want to claim they're DSPs, most insiders define only a handful of true DSPs:

• Turn
• Invite Media
• MediaMath
• Triggit
• [X+1]
• DataXu
• AppNexus ("maybe")

To determine the opportunity to reach their audience through a certain DSP, potential buyers can browse or generate reports provided by the DSP based on branded data acquired from companies like BlueKai and eXelate (of course, this all might change based on if/how federal "Do Not Track" regulation pans out). If the buyer deems the audience size is too small, she can then open up the defined scope, go to other DSPs, or go to publishers directly.

RTB: Since RTB is a technology that theoretically anyone can build and use on a platform, what you need to know instead is that:

• Not all publishers participate in RTB; they can elect to opt out.
• Targeting can be controlled. Buyers can target by segments or demographics (audience criteria vs. publisher/placement), and certain publishers can be eliminated from contention based on campaign/advertiser restrictions.
• Since RTB means you win, you get an instant ad serve, advertisers need to first load their campaign and ad creative, then bid.

DMP: Includes companies like BrightTag, Demdex, TagMan, and Brillig.

Got it? Good! Stay tuned for my next column where I cover some more of Adam's ad:tech session, other industry insight, and predictions from the experts. Happy Holidays everyone!