Why Do we Need CTV Demand Side Platform (DSP)?

55.1 million users are expected to cut cords by 2022 which opens new doors for advertisers. According to Steelhouse’s forecasts, ad spend on CTV will hit $20 billion this year. Now, the task for advertisers is to start a conversation with viewers on CTV. But how? The answer lies in three letters: DSP.

An Ideal DSP for CTV

A demand-side platform is arguably one of the most complete solutions to buy traffic on CTV for both direct advertisers and agencies for its safety, transparency, and reliability. The trick is to choose the one that fits your business. This is not so simple given that DSP market size is projected to grow up to $2.97 billion by 2025, attracting more and more new players to compete for ad budgets. So how do you choose the right platform?

When it comes to advertising on CTV, there’s a certain list of criteria a DSP must meet:

Trusted traffic sources. Advertisers need to make sure the traffic they pay for comes from verified supply-side platforms that offer premium and even exclusive inventory such as the access to Hulu’s private marketplace with Magnite. Some SSPs to look out for are Magnite, Freewheel, Beachfront, SpotX and others.

Extensive targeting capabilities to create audiences based on location data including ZIP codes, addresses and selected areas on a map. It’s also important that a DSP offers targeting by publishers, bundles, content, duration, etc. Another feature to look for in terms of targeting is the availability of include and exclude lists.

Fine-tuning ad campaigns. Before signing up for DSP services, advertisers need to check to which extent they can adjust budgeting, pacing, micro bidding, and other settings in their campaigns.

Exhaustive reporting on performance of the ongoing and completed campaigns including by API.

Full support of private marketplaces deals recognized by the International Advertising Bureau (IAB): Invite-only Auction (IOA), Unreserved Fixed Rate (UFR) and Automated Guaranteed (AG).

Safety tools. Safety is absolutely crucial for OTT/CTV advertising as it is threatened by a lack of regulations, increasing fraud and wealth of user-generated content. IVT avoidance, brand-safety targeting, and other pre-bid technologies, as well as support of ads.txt/app-ads.txt/supply chain technologies, are vital for providing a transparent and safe environment for brand advertising. Post-bid fraud and viewability measurements implemented on DSP side are a very desirable supplement to pre-bid solutions. These safety capabilities can be provided by either an in-house or 3rd party solution such as DoubleVerify, Moat, and Pixalate. The key requirement is that it can effectively mitigate safety risks on OTT/CTV. Also, an advertiser should be able to integrate their preferred measurement solution with a DSP.

Data management platforms (in-house or 3rd party) with the right CTV audiences.

Creative validation tools (in-house or 3rd party).

These are some basic requirements. However, there are demand-side platforms on the market that offer a more complete media buying experience to their clients. Here are some capabilities that set a great DSP apart from a good one:
Traffic funnel visualization. Brand advertisers need clarity and confidence in the CTV traffic they pay for, as well as an understanding of possible reasons for losing auctions. To help advertisers in the client-oriented CTV environment, a DSP provides them with tools that explain the whole traffic buying funnel from the estimation of traffic volume available per different dimensions to the information on win rate, bids in the auction, lost and won responses. Such knowledge gives brands a clear idea of the overall performance of their CTV ad campaigns.

Library of ready-made targeting packs for both open auctions and private marketplaces.

Running complex cross-device campaigns when not only CTV users are targeted, but also those on OTT, mobile, and web.
Running combined campaigns with ads on CTV tracking conversions on mobile or even offline.

Measuring actual campaign coverage by audience segments. For example, a client can get clear evidence if their campaign impressions reached the desired audience, or, if they were distributed correctly over different segments.

DSP Services: Just Do It or Let Someone Else Do It

Demand-side platforms provide self-serve and managed services. With self-serve, advertisers run their advertising campaigns single-handedly making all the important decisions. When it comes to a more complex task, say effective CPI optimization, managed media buying comes into play. This type of service enables a DSP to purchase traffic on behalf of clients. Both options hold rich opportunities and it’s up to each brand or agency to decide which one to choose depending on objectives, business scale and ad budgets.

Managed Services

Pros. Provided that a DSP has all the features listed above, its managed services hold numerous benefits. Experienced professionals fine-tune campaigns taking into account budgeting, targeting, objectives, placement, etc. Moreover, a DSP takes care of effective optimization, monitoring, selecting and setting up niche traffic sources and private marketplaces. Also, clients don’t have to deal with selecting custom audiences, setting up special cases with conversions, etc. And finally, with this type of service, advertisers can opt for postpaid payment, operate large budgets and be guaranteed ordered volumes of traffic.

Cons. The first disadvantage of managed DSP is that to start an advertiser needs to sign an Insertion Order(IO), a contract that confirms the commitment of the advertiser to run the campaign with a DSP. Another handicap is that since all the campaigns are managed from end to end, brands and agencies cannot directly adjust campaigns as all the alterations have to be discussed and approved by a DSP representative. It’s especially inconvenient when there’s a need to make an update in real-time.

Pros.

Advertisers on self-serve get to enjoy a quick start instantly signing up and charging the account. Additionally, as opposed to managed services, with self-serve an advertiser gets complete control over their campaigns, budgets, targeting, etc. Numerous DSPs provide real-time monitoring of the key specifications and the funnel of the buying process. What’s more, the most advanced platforms allow clients to manage campaigns with API.

Cons.

First, there’s a prepaid payment which means a user has to top up their account before running campaigns. The good thing is that starting budgets are significantly lower. Second, here advertisers cannot execute complex campaigns, nor will they find customized private marketplaces or audiences (while it is true for most DSPs, some do provide access to PMP and customized audiences upon request).

Self-serve works best for brands and smaller agencies that look for a programmatic media buying solution with more flexible budgets, control and scalability. Advertisers place ads single-handedly and manage their campaigns at all stages from creation to optimization.

White Label: Your Own Personal DSP

A powerful DSP with rich targeting, reliable safety solutions, 3rd party tools integration and other vital capabilities is guaranteed to make advertising on CTV efficient and painless. Each business gets to decide on which terms to partner with such a platform. Many large scale advertisers choose managed services because they spare the headache of managing sophisticated campaigns and guarantee results.

On the other hand, smaller agencies and brands usually decide to go with self-serve that offers full control, flexible budgeting, and transparency. And agencies that want to offer their clients a programmatic media buying within their environment resort to white label DSPs.

White label is another widely utilized solution. It is a programmatic media buying tool that companies sell as their own. Thus, agencies create their ad product without spending time and effort on developing real-time bidding infrastructure. WL DSP is a great software to optimize media buying expenses and management.

White label has a considerable contribution to the agency’s branding, too. An out-of-box WL gives agencies a full-fledged DSP already integrated with supply sources, data management platforms, IVT avoidance and measurement solutions. Also with API, users can establish additional 3rd party integrations to connect a new traffic source, preferred DMP and a safety solution, as well as set up internal integrations for their CRM. WL enables agencies to manage a DSP and provide it to their clients right from their environment, under their own logo and URL.