What is the Difference between a DSP and an Ad Network

The world of digital advertising is completely different than it used to be 10 or 15 years ago. We have shifted from direct inventory buying to a more centralized process where ad networks become of great help. However, there is little reason for technologies to stop with programmatic advertising. Flexibility is the key to adapting to the quickly changing paradigms. Today we will try to clear the air and discuss thes main difference between traditional ad network and one of programmatic components – Demand Side Platform (DSP).

What advertising network is about.

In its traditional understanding, there is no programmatic part. The online advertising network buys inventory from Publishers. Generally, they buy that part that can’t be sold directly to an Advertiser.

Their main advantage is that direct contacts are not always possible, especially if you want to sell somewhere abroad. Ad networks offer a variety of websites that play Advertisers needs when they want to cover a wide spread of audience.

Company and individual websites owners often use them to launch different types of campaigns and, thus, need different types of devices being covered (desktops or mobile gadgets), with different pricing models (CPA, CPC, CPM or others) and places for displaying (websites, mobile audience, applications) etc.

There are only two points that may frustrate participants in this process:

  • financial
  • transparency issues

Ads on the network are more expensive than direct advertising. It can be explained by the fact that all that buzz, from negotiations with clients up to support and maintenance systems needs to be paid; besides, the network itself will siphon off some income from the business.

The second point concerns honesty. Both Publishers and Advertisers should keep an eye on the process as nobody is safe from fraudulent activities.

Demand Side Platforms

If you remember, the idea of programmatic is having the buy-sell process automated and using an auction process. We cannot physically attend several auctions at once, but DSP can. It connects to several platforms of programmatic nature and offers several variants for Advertisers to choose from.

The process of bidding is quite transparent for everyone (visitor’s location, approximate age, device type and so on) and what price will be acceptable.

The main advantage here is that it’s not about websites where potential audiences may hang out, but instead try to use a personalized approach for each visitor. The ads for fashionable bags can be shown to those whose data indicates they browse fashion websites frequently.

In such a situation, people stop treating advertising as something irritating and distracting. According to surveys, people are ready to click on ads if they are relevant to their current needs and interests.

Is programmatic better?

Yes and no. Marketers are still suspicious about a new technology they don’t quite understand. But both of the approaches have much to learn from each other: ad networks started acquiring something from programmatic approach and vice versa; traditional technologies are implemented into DSPs as a whole. It would be wrong to expect that we are going to see a displacement of one technology by another; it is more likely to be a fusion of them.