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RTB, DSP, SSP, WTF?

Sacha Berlik
RTB, DSP, SSP, WTF? Sacha Berlik
Most readers of the iMedia newsletter will have heard of ad exchanges. Slowly but surely the marketers and media planners at agencies are replacing non-transparent network buys with ad exchange buys. So, let me give you a brief overview of the history: back in 2005 an ad serving company called Right Media, developed into the first ad exchange with the idea to serve as a market place for unsold display media inventory. That was necessary because networks couldn't cope with the explosion of available publishers, e.g. web 2.0 inventory. Also, it made life easier for publishers to monetise their remnant inventory on exchanges, selling it for the highest bidding price. Like an eBay really for display inventory.

The landscape in 2010 looks different, yet so familiar if you look across to search marketing: you find that Right Media was bought by Yahoo!, Google has an exchange based on the doubleclick technology they bought, and Microsoft just invested in a technology called AppNexus.

SSP

Or supply side platform. From a buying perspective it is another acronym and could in the wider sense be treated as an ad exchange. From a supplier side there are quite a few differences, different technologies, algorithms etc. to get the best price for the publisher inventory.

DSP

Stands for demand side platform and is nothing else than a technology that allows the marketer or agency to bid across the above mentioned and many other bidding platforms. Really very similar to a bid management tool for PPC (pay per click). The small difference to search is the amount of additional platforms, different strategies and more complexity to make display campaigns work across those platforms. A highly technical knowledge is required which is rarely available.

DEM

Hence there are specialist companies that call themselves DEM, yet another acronym for display engine marketing agency.

The existence of DEMs is simple: it is a service solution for agencies and advertisers alike to run synchronised bid management across all major ad exchanges and SSPs.
 
There are some that have their own technology, and others white label major DSPs. The latter could be dangerous as you heavily rely on one technology, essentially putting all your eggs in one basket.

And, it is still early days. With new re-targeting companies entering the market daily, new data propositions, new exchanges popping up, new technology being developed, a good technology will take, similar to search, three to five years to successfully bid across all platform.

Yes, DSP is probably the most common acronym in our part of the industry, and everyone seems to want to operate one. But not many people know how to operate them. It is like buying a stick shift car when you only know how to drive an automatic. You are in for a very bumpy ride. Also, the transparency is lacking.

Isn't it the data that is important for you? The insights into where your campaign runs, which publishers convert, which ones don't. As a marketer you want to have consolidated data across your campaign to make instant decisions on whether you are on track to reach your KPIs. Now, a highly serviced DEM can offer you all that, and does the work for you too. :)

You can tell by now, that I am really keen on this product. Admittedly, I am a bit biased, but you soon will find out why it all makes sense. Let's look at another acronym: RTB -- real-time bidding. Wow! It's like a rollercoaster ride.

RTB


Real-time bidding. This means you identify a user based on a cookie, bid for the ad impression in real time, win the bid, and show them an advert according to their behaviour or interests. That sounds like the golden egg, doesn't it? But some ad exchanges allow for RTB, some don't. So having a RTB technology doesn't mean you get all inventory, it might actually limit your exposure if you only focus on RTB. Hence, successful campaigns are not only based on RTB capabilities but more on the knowledge of the publisher market. If you know the publishers where certain campaigns perform, if you have the data to make the campaigns work, and the service level to give timely feedback to the advertiser -- then you have a strong performance product. Would you have guessed that DEMs can do that today?

DDM


People also talk about a DDM: A data driven market place. That means you can buy data to target your audience online. This is common practice and works very well in a homogenous markets like the USA (I don't need to explain that acronym) but across Europe we still see some limitations for that. However, again looking into the future, we will see exchanges for this data based on quality and collection. This will change the game across the markets once again. Be prepared, there is more to come!

WTF?


Exchanges and SSPs will probably soon trade up to 75 per cent of all display inventory online. This is an estimate, and auction based media trading won't be limited to remnant inventory, and not all remnant is bad inventory. So the market is evolving towards exchange buying, away from networks and that means to get the cheapest conversion for your advertising dollar, you need to jump on it with a reliable partner.

Ask your agency which technology they use and what experience they have. Also, ask them to test different ad exchange buying technologies and service providers: the common misconception that one should only have one exchange buyer on the media plan as this increases the bidding price is to our mind BS (sorry, another acronym). We have ran over 3,000 campaigns in the last 18 months against various competitors, including re-targeting and no frequency cap limits, and there was no bid price increase. So go for it! Again, don't put all your eggs in one basket, be bold and test. Only partners delivering against your KPIs will stay on the plan, won't they?

Quick recap to see if you can still follow us: DSP and RTB technologies buy inventory across exchanges and SSPs. DEMs offer a service to do this successfully using in house technology but, being platform agnostic, can use any technology. This is important because when the battle begins whether a DSP owned by Google will have access to Microsoft and Yahoo! Inventory or vice versa, only DEMs can change between technologies to achieve the ROI of your display campaign. This also means if you only know how to operate one DSP (and they are very different) this could result in you losing out on up to 70 per cent of the all available inventory. Ouch! We can see your ROI dropping.

We see that most so called DSPs either just aggregate data or work similar to DEMs as a managed service for a minimum of six months. It shows what I have been saying on conferences for many years, that the personnel who are able to optimise across the exchanges and SSPs are limited. So a success of any display campaign boils down to two things: People using technology and knowledge of the publisher market

Simple!

Now, a case study...

Let's assume advertiser X is looking to sell its product to a specific audience. Maybe a bank targeting a male or female between 25 and 30 for a mortgage product, with an ideal household income above £30,000 a year.

Now what we do is set up this campaign in multiple exchanges. To do that we need to...

Upload either creative or ad server tags according to different creative specifications. Matching them with our in-house database to figure out the best set-up for a finance B2C campaign.

Defining the set-up strategy together with the agency or advertiser, e.g. maximum bid of £1 which might come in as low as 80p, allowing for 20 per cent more ad impressions for any given budget.

Opening the campaign in several DSPs, ad exchanges, SSPs and RTBs to start the campaign with a frequency capping across the board, including retargeting.

Monitoring this campaign through our dashboards hourly and analysing it to optimise the campaign-strategy permanently towards the advertiser's target.

And this is only the beginning. With this in mind, you will soon find out that unless you have experience in the sector, or your DSP consultant isn't on holiday and busy serving 500 other clients with the same experience as yourself, you end up outsourcing it to a DEM to make RTB, DSPs and WTF work.

We are looking at a very immature market place with new technologies and players that jump on the band wagon of RTB and targeting. We look at new technologies emerging on a monthly basis with most players coming to Europe from the US market. It is naive to believe that a technology can represent successful bid management across multiple markets, exchanges, SSPs, data markets and complete different publisher markets.

But as I said, I am biased. Let me know what you think!

Sacha Berlik is the CEO of Mexad

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