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Pre-Bought Vs. Demand-Side Platforms - Know The Difference

Pre-Bought Vs. Demand-Side Platforms - Know The Difference Jay Friedman

Demand-side platforms, or DSPs are becoming a buzzword lately, along with impression scoring and real-time bidding.  These three terms all point to platforms that allow an advertiser to procure its inventory "on the spot" without any waste.  This is very different from the many ad networks that pre-buy their inventory in bulk and parse out on the back-end. 

Full disclosure here.  We are an ad network that does not pre-buy inventory.  We buy on demand as clients agree to work with us so that we can get the exact inventory that independent data says will fit their goals.  That said, firms like Invite Media and Media Math are now making news for similar functionality.  The gist is that whether buying through exchanges or through publishers directly, and pairing the latest behavioral data with that inventory, DSPs are able to acquire only the impressions that are the best fit for their advertisers' needs while turning away any impressions that don't make sense for clients on the roster at that time.  Many on the DSP side say that this method eliminates waste and improves metrics.

Networks that pre-buy, and most ad networks that have become popular in the last few years do so, acquire their inventory from their publisher list up front.  Sometimes it’s a quarter in advance, sometimes it’s a year in advance.  These networks and work to have a large and diverse enough client base such that they pre-purchased impressions are beneficial to each client. Left over inventory is either then resold to other networks, sold on an exchange, or blended into a client's campaign, or simply burned.  Networks that pre-buy believe they have an advantage because they get first pick of inventory from popular sites.

The goal of this piece is not to tell you which is better, but hopefully to shed light on the difference.  Which is right for you?

Jay Friedman is COO of Goodway Group, and a partner in the 3rd-generation family company founded by Milton Wolk in 1929. Friedman joined in 2006 to add a digital media component to Goodway’s offerings, beyond the existing print and promotional...

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