Demand-Side Platform (DSP)
For most of history, advertising best practices were pretty cut and dry. Advertisers would reach out directly to publishers months in advance of their marketing campaigns running. Both parties would go back and forth on rates. And they would close the deal with the hope that their campaigns would reach the right audiences.
But in today’s landscape, that method of advertising is almost uniformly ineffective for brands of any size. Modern consumers aren’t loyal to specific publishers or sites like they were in the past. Instead, old social media platforms and editorial platforms have given way to the next big thing—and consumers can’t get enough. They bounce from phones to laptops, from streaming TV to in-store shopping, all at rapid pace. To keep up, marketers need to let go of assumptions they have about how their target audience wants to interact with their brand. Instead, they need to adopt a channel agnostic mindset. Each campaign should be optimized to target consumers wherever their digital life takes them. And the easiest way to do this is to work with demand side platforms, more commonly known as DSPs.
DSP definition made simple
DSP stands for demand‑side platform. A DSP is software that lets advertisers buy digital ads automatically across many websites, apps, and streaming environments—without needing to individually reach out to publishers. They act as a single source of truth where marketers can plan, buy, optimize, and measure their digital advertising.
To run their ads, marketers set their own budget, audience, and creative within the DSP. Once done, they connect to ad exchanges and supply‑side platforms (SSPs) to bid on the right impressions in real time. This provides reach, control, and transparent reporting in a single dashboard. Before we move forward, let’s dive into a few of these new terms.
Ad Exchanges & Ad Networks
An ad exchange is essentially a digital marketplace where publishers can sell their advertising inventory (known as remnant ad space) and brands can buy that inventory. These exchanges offer access many, many different ad networks in order to facilitate that. Ad networks, in turn, are collections of publishers that all have similar interests, topics that relate to each other, or are subsets of the same parent company. This buying and selling of advertising inventory is called real-time bidding, because it happens almost instantaneously. For advertisers, this is a so because it gives them the ability to target and reach their customers at a moment’s notice. All while controlling how much they are willing to pay for the individual ads.
DSP vs SSP: the 10‑second comparison
A DSP represents the demand side of advertising. It supports brands by helping them buy inventory for their ads. This inventory can then showcase ads to gain audience impressions. An SSP represents the opposite side of the coin—the supply side. An SSP is used by publishers and larger retailers to sell access to this ad inventory. They meet in the middle at an ad exchange. If you’re an SMB asking “what is a DSP platform” or “what is DSP in advertising,” this is the key distinction to start with—DSPs are your tool; SSPs are the publisher’s tool.
How DSP advertising works (step by step)
Let’s walk through how this works in a quick flow:
1. You set the advertising plan
First, you define your campaign goals and identify your target audience. Then, you create your ads—complete with visuals and copy to best reach your target audience. Afterwards, you set your budget based on how aggressive you want your bids to be in order to reach these audiences and meet your goals.
2. The DSP bids in real time
When one of your target audience members loads a page, opens an app, or streams content, an associated remnant ad slot goes up for auction in the ad exchange. Your DSP evaluates whether that impression matches your goals and, if yes, places a real-time bid in milliseconds. A winner is chosen based on that bid.
3. The ad serves instantly
If your bid wins, your ad appears. Again, almost instantly for the consumer. The DSP tracks the outcome. Was there a click, did they view it, were there conversions? Your DSP takes this information and uses it to alter bids moving forward to increase ROI and more effectively meet your goals.
4. You continuously optimize for what works
Over time, reporting on ad performance start to showcase trends across each channel and ad format. Your DSP will relay this information to you and you’ll be able to adjust your strategy, create new ads, or inform future marketing campaigns.
Why DSPs matter for any size business
For many brands, a DSP is the difference between minutes and weeks of campaign setup. This is because it removes guesswork around individual sites or platforms your target consumers are visiting this week. Working with one will help you find your customers across the open web and premium apps, plus newer channels like connected TV. And you won’t have to worry about budgets as much because it will do all this at fair‑market prices via auction.
Because it sees more of the journey, a DSP can also optimize in real time. The system raises bids where conversions are likely, lowers them where they aren’t, and shifts spend between channels to hit your target metrics. The best platforms use AI trained on large, commerce‑focused datasets to do this.
DSPs also vastly improve targeting. Assumptions are not needed here. DSPs can easily track the attributes of consumers who make purchases with your brand. Things like demographics, location, interests, even income. You can retarget these consumers with highly personalized ads based on this information to help drive more conversions.
Importantly DSPs are fantastic at extending reach. Brands no longer need digital marketing teams of 5 or 10 people to create campaigns across search, social, connected TV, web, and more. The DSP will serve ads across all these platforms at no additional operational cost. Best yet, a DSP will instantly track the performance of all these ads and optimize your bid strategy and channel placement to make sure performance remains high.
Managed‑service vs self‑serve DSP: choosing the right fit
Both models buy media the same way. The difference is who’s in the driver’s seat.
Managed‑service: means an account team runs campaigns through a DSP for you. It’s helpful if you need hands‑on support, but it often comes with higher minimums and less day‑to‑day control. And, importantly, if you want to get campaigns up and running quickly this option may present a challenge because you’ll rely on an outside manager to pull the levers.
Self‑serve: puts the controls in your hands when it comes to launching ad campaigns. For most SMBs, self‑serve is the sweet spot because it optimizes day-to-day campaign management while also giving flexibility to brands to start and stop campaigns as they please. Self-serve DSPS typically provide quick, out-of-the box setups and generally don’t have budget minimums. This frees advertisers to test our strategies in fun and new ways, without needing to worry about performance tanking.
Keep these things in mind when assessing which type of DSP is right for you. If you’re looking at new solutions, create a checklist centered around fast setup, transparent, granular reporting, and strong AI optimization.
Example use case: a seasonal push for a local ecommerce brand
It’s October, and a local home goods store wants to start promoting their annual holiday sale. In the past, they’ve relied heavily on word of mouth, flyers, and the independent newspaper that runs in their town. But this year, they want to go big. They decide to invest in digital media to better target out-of-town visitors who come to admire their fall foliage. The holiday season is already kicking off, and those leaves are already coming down, so they know they must move quickly.
Before kicking off their campaign they align on what they want to set up:
- They identify their target audience as middle-aged parents and retirees.
- They know that they want to target users who are outside of their city limits but within a 75-mile radius of their stores.
- They want to optimize their campaigns to drive as many conversions as possible while these visitors are in town.
The store employees have little advertising experience, so they decide to build a plan with a DSP that offers an out-of-the-box solution designed to drive conversions and backed by a commerce-focused AI. The DSP runs search‑intent data, retail media audiences, and category signals to find likely buyers across news sites, lifestyle blogs, and apps, plus CTV for reach.
During the first week, their DSP notices strong buying intent from recipe sites and gardening forums. They also notice that emerging social platforms and entertainment media are delivering weak performance. Instead of worrying, they notice that their DSP automatically shifts budget to higher performing ad sets. After the second week, their retargeting campaigns start to home in on conversion trends. Since the data is being passed back instantly, they’re able to pivot quickly and create retargeting ads that bring in net-new customers from travel sites that weren’t previously on their radar.
Their net result: more online orders than ever before, higher in‑store traffic from net-new customers, and a clean view of what to repeat for next year’s sale.
FAQs about DSPs
Do I need a DSP if I already use search and social ads?
Those channels are mainstays for any marketing campaign. But, they don’t give marketers the ability to target customers outside of their walled gardens. A DSP lets you add the open web, retail media, and streaming inventory to ensure the highest performance possible.
Are DSPs hard to use?
Look for a self‑serve option built for speed. Modern workflows can launch in minutes with guardrails that keep budgets focused on your goal.
What formats can I run?
You can run most formats through a DSP. Display ads, video ads, native ads, audio, and connected TV are common but not the only ones. Marketers in the know also use DSPs that support retail media and dynamic product ads.
How do DSPs optimize my campaigns?
The DSP uses AI to predict which ad impressions are most likely to hit your goals, then adjusts bids and placements in real time. You set the goal; the platform does the rest.
What should I look for in reporting?
Above all else, transparency. Many platforms will hide their reporting to pump up their stats. Look for placement‑level transparency, audience and device breakdowns, conversion paths, and the ability to compare performance across channels.
Do DSPs work for any budget?
Absolutely! DSPs are designed for campaign performance, not exhausting budgets. One of the best things about DSPs is that they democratize the marketing landscape, allowing small businesses to compete with the largest brands.
Your partner in smarter advertising
Whether it’s driving more conversions, keeping ROI high, or building your audience, DSPs are one of the simplest, quickest ways to launch high-performing ad campaigns. Check out ways that Criteo can help you take advantage of all the benefits that DSPs have to offer. Or dive into more ad-tech best practices on the Criteo Blog.