Commentary

Five Things Your DSP Can't Do

Demand-side platforms (DSPs) are all the rage in online advertising today.

Why?

As buying and selling of online inventory moves from the relationship-driven, "three-martini-lunch" deal to a programmatic, impression-by-impression auction, advertising buyers are salivating at the opportunity to "cherry pick" the best inventory. So fire up your DSP contract, set your traders loose, and bask in the glory of online advertising victory!

But hang on. The DSP promises of convenience and efficiency are certainly compelling. But the path to achieving real success in finding, engaging, converting and retaining your audiences and prospects online is much more complex than DSPs will admit.

Here are five functions a DSP cannot do for major advertisers.

1. Create highly specific audiences. DSPs do not allow advertisers to leverage rich datasets from a variety of sources in order to create highly granular audience definitions, and in turn, deliver highly-relevant advertising experiences wherever the consumer may be.

2. Deliver dynamic marketing content tailored for each audience. DSPs cannot offer full-funnel conversion rate optimization which enables advertisers to create a relevant experience - specific ads and landing pages - for each consumer.

3. Control all ad placements across all media. DSPs do not support multiple patterns of media acquisition. These platforms excel at buying remnant display inventory from ad exchanges but do not allow the integration and placement of Class 1 inventory.

4. Manage multi-channel advertising. DSPs are display-centric solutions. They don't serve ads across channels -- search, social media, mobile -- all rapidly growing areas of interactive marketing. The result is even more data fragmentation - and who wants that?

5. Attribute conversion to all exposures across multiple channels. DSPs focus on the last click and attribute success to that ad exposure - a primitive way to evaluate a campaign's success. Today's advertisers must be able to evaluate how many times a customer was exposed in an exchange, across exchanges, and across channels to perform attribution and calculate their real ROI.

In the end, the current DSP players are focusing on the problems of advertisers much too narrowly.

If DSPs want to truly play a role in controlling the lion's share of online advertising dollars, they need to raise their game. They must focus on delivering relevant and engaging advertising experiences that capture the attention of consumers -- regardless of the ad exchange or online channel with which the consumer chooses to interact.

Until DSPs have the five critical functions listed above, advertisers must look for other solutions to deliver the relevant experiences that consumers crave. If not, these advertisers may as well return to enjoying those three martini lunches.

4 comments about "Five Things Your DSP Can't Do".
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  1. Andrew Ettinger, March 16, 2010 at 8:54 a.m.

    well said

  2. Chris Weiss from LucidMedia, March 16, 2010 at 12:10 p.m.

    I believe the story is far more subtle than just; "... no DSP can ...". There are buy-side solutions out there that do these things as core capabilities. There are DSP providers that allow advertisers to leverage rich data (both in-house and 3rd party) for highly granular audience targeting that can reach more than 95% of the online US population. They deliver dynamic content precisely tailored to a specific audience optimized for CR (or CPC or CTR, all in real-time no less); control placements across not only all media types but also media classes including real-time bid media; offer semantic conversation targeting to blogs, social media, or UGC if needed that can include in-text, dynamic, video, mobile, and search options; and can attribute conversion data to unique user history including view-through data which breaks any last-click dependency. And these DSP solutions provide the page-level insights critical to real ROI calculations.

  3. Sean Kegelman from VivaKi, March 17, 2010 at 2:45 p.m.

    Murthy,
    Good points on the platforms themselves. Sometimes agency and holding company efforts in this space get labeled "DSP" as well. Some of these, VivaKi's in particular, do go beyond some of these limitations and, when coupled with the agency offerings DO provide support for everything you outline and more.
    That's part of the point. Just like search, there was a focus and arms race to build the best capability. We're doing that today, but we have also learned that we need to quickly work on ensuring that this is not an isolated effort, but one tightly integrated into all communications and marketing efforts and channels. And I also don't mean channels as narrowly as you limit them to the digital channels. You can't just be focused on digital.

  4. Ken Berquist, August 28, 2010 at 4:38 p.m.

    Valid points w/r/t a DSP technology provider, but I am with Sean on this one. Adnetik can and does address each on the limitations noted above with its AIM, Audience Investment Management platform which includes full DSP functionality and connection to all the major exchanges. Further, Adnetik has acces to Class 1 inventory from a variety of publishers within the exchange although they do set a floor bid for the impression which if not met is filled with a direct publisher client. Adnetik can provide complete transparency w/r/t where the impression is served, including white & black lists, as well as the number of ads o the page. And, we integrate campaigns which may include social, video and mobile all within our manged services.

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