Tips for getting started with DSPs

Demand-side platforms (DSPs) are touted for their ability to enable advertisers to quickly and efficiently buy display media. What isn't clear is how DSPs will allow advertisers to do this most effectively. For example, in this emerging display ad market for real-time bidding, how do advertisers control costs? How do they protect their brand? How do they most effectively target? What are the most important creative considerations?

Before getting started with any DSP, marketers should ask themselves these questions to ensure they are on track to be successful. 

How do I ensure my ads will appear on the right websites?
Protecting the integrity of your brand by matching your target demographic with a site's demographic is not an option via DSPs. DSPs give advertisers the ability to target by audience segment, rather than by specific website. The most commonly available audience segments are industry-based category and geographic. If you want to target audiences that visit social network sites in the San Francisco Bay area, for example, that is not a problem. However, you won't know on which specific web properties your ad may appear. While many DSPs do partner with third-party data suppliers to provide more specific audience segments -- including demographics and contextual segments -- these segments vary in quality and normally require a financial commitment before you can try them out.   

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The most reliable audience targeting by far is your own. By bidding on your existing customer base, you can be confident that your ads will be displayed to the right audience in the right place. This type of targeting requires syncing up your customer data with the DSP's data -- which typically amounts to adding some tags to your site. The sooner you add the tags, the larger your targetable segments become.

How do I control costs?
After you have decided which audience you want to reach and have taken care to target appropriately, you need to take the proper precautions for bidding cost control. While DSPs usually offer the ability to enter a bid amount per audience, you may not know how much of that audience will be available or what the appropriate bid price should be to win that audience. For example, if you bid too high, you might exhaust your budget in minutes. In order to avoid wasting your budget, you must run trials and tests to determine the right price for your desired audience.

The following is a good, basic strategy to get you started:

  • First and foremost, look to work with DSPs that provide the tracking and reporting capabilities you need to make informed decisions about your budget and spend.
  • Begin with a low bid amount alongside a narrowly defined target audience. You should also be prepared to test the waters by upping your bid amount incrementally, and increasing the target audience in order to win more bids.
  • Carefully monitor the cost-effectiveness of the bid amount you are making in relationship to your return on investment for that bid.
  • Make sure the DSP provider has the ability to distribute your overall budget over a specific time period. In other words, the DSP should be able to stop bidding automatically if you have already won X number of bids for a given time slot (hourly, daily, etc.)

As the real-time market for display ad inventory develops -- and as DSPs evolve to provide more automated budgeting controls -- the cost control challenge will lessen. For now, start slowly and cautiously with your budget until you know your price point and return on investment. Make sure that the DSP provider has reporting that will not only show you how much you are spending throughout the day on the media, but also on the back-end charges from the DSP you are using. 

What are the most important creative considerations?
In terms of creative dimensions, most Interactive Advertising Bureau (IAB) standard sizes are supported by DSP vendors. However, be aware that certain sizes will have more ad inventory available to them. If you want to win more bids, focus on 728x90, 300x250, and 120x600, as they are the most common sizes available. In terms of creative type, keep it simple. Just as you will be blind to the sites on which the creative will appear, the sites are equally blind to which creative will appear on their site. As such, real-time bidding exchanges have been restricting the types of media that advertisers can use via DSPs. For the most part, simple Flash, .gif, or .jpeg creatives are widely supported.

How will I measure and improve performance?
Although some DSPs may elaborate about the innovative optimization algorithms that come with their systems, you will need to monitor, evaluate, and optimize based on the typical variables with which you are already familiar. As with any display campaign, you will need to have reporting metrics that at a minimum show total cost and average bid, along with click-through and view-through conversion results by campaign, exchange, audience segment, and creative version.

Reports should be updated continuously throughout the day, showing activity in the same day, yesterday, last week, last month, or any custom time range you wish to define. You should also be able to download and receive reports via a scheduled email. Ideally, you will have consolidated reports for your real-time bidding and non-real-time bidding buys, so that cost and performance can be compared and contrasted across all of your display media.

DSPs are rapidly evolving and improving, offering tremendous promise for marketers. Just as search marketing has gained efficiencies through the use of search engine marketing platform providers, the display ad market will gain efficiencies from the use of real-time bidding through a DSP platform. Addressing the key questions discussed in this article when evaluating a DSP vendor is a good place to begin as you decide if -- and when -- you are ready to get started.

George Allen is a senior product manager at Mediaplex.

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