The three parts of an ad auction
- The demand-side platform (DSP) works for the advertiser. It looks at each slot that comes up and bids for the ones worth having.
- The supply-side platform (SSP) works for the app or the website. It offers each slot for sale to many buyers at once.
- The ad exchange is the marketplace in between, where the auction runs and the best bid wins. Some supply-side platforms run an exchange of their own.
The words “demand” and “supply” are the economist’s: advertisers want the space, publishers have it. Our guide on how real-time ad auctions work follows one slot through all three.
What a DSP decides
For every slot that comes up, in a fraction of a second, a DSP works out:
- whether the slot is in the place, on the days and in the shape the advertiser asked for;
- whether the advertiser still has budget left to spend;
- what the viewing is worth to the advertiser, and so what to bid.
If the bid wins, the DSP delivers the ad to be drawn in the slot, and it records the result for the report.
A DSP is not an ad network
An ad network buys space in bulk and resells it to advertisers as a package. A DSP buys one slot at a time, in auctions, for the advertiser it is working for. The first is a wholesaler; the second is an agent at the auction.
Why most advertisers never meet one
Most DSPs are used by agencies, who run campaigns for many advertisers every day, and are built for that work. A small business seldom has a reason or a way to use one directly, so it buys through an agency or through a service that keeps the buying out of sight.
Where Ailumic fits
Ailumic is a DSP designed for small businesses to use directly. You do not operate it. You set an amount, an area and the days, and it does the bidding and writes the report in plain words. How the pieces fit is on the page about how Ailumic works.
A game app has a banner slot. Its supply-side platform offers the slot to an exchange. The exchange asks the DSPs what they will pay. A bakery’s DSP, which knows the bakery wants to be seen near its shop on weekends, bids; the best bid wins; the bakery’s banner is drawn in the app. All of it takes a fraction of a second.