Demand-Side Platform vs. Supply-Side Platform All You Need to Know

Estimated reading time: 7 minutes

If you have dabbled in digital advertising before, you probably have a good idea of what demand-side and supply-side platforms are, and if you don’t – don’t worry, all will become clear.

In this article, we’re going to take it back to basics to give you a good understanding of what demand-side and supply-side platforms are. We’re also going to look at the pros and cons of each and discuss the merits of Amazon DSP – a demand-side platform that allows you to buy ads and connect with shoppers at scale, on almost any device, on and off Amazon. 

What are demand and supply-side platforms?

Very simply, demand and supply-side platforms are software that makes it easier to buy and sell advertising space online. 

  • Demand-side platforms allow marketers to advertise their products at a lower price and with better tools to track their ads’ performance.
  • Supply-side platforms, on the other hand, make life easier for advertising sellers, by letting them reach a wider range of advertisers.  

That’s great as a headline, but how do they both work?

How do demand-side platforms work?

A demand-side platform (DSP) allows marketers and digital advertising companies to bid on and buy digital ad inventory, such as video ads, display ads and rich media ads (audio and animation etc.) across different publisher sites. 

The DSP does a big part of the advertisers’ job for them. It has access to all the advertising deals available instantly, so you don’t have to spend hours contacting and negotiating with publishers individually. It also uses data to find the best ads for your target demographic based on things like age, gender, location and income level, so you can reach the right audience.   

And how do supply-side platforms work?

Supply-side platforms (SSPs) help digital advertising publishers sell their ad inventory at a pre-determined price range through online auctions. All you have to do is connect your advertising inventory to an SSP and it will do the rest. 

It can evaluate advertisers, set bidding ranges and rates, provide relevant ads to advertisers based on their geographic location, and determine which ads meet the buyers’ requirements. It also allows real-time bidding, which streamlines and speeds up the ad-selling process.   

The differences between demand-side and supply-side platforms  

DSPs and SSPs are two sides of the same coin. They work together to simplify and enhance the buying and selling of ads, with each platform representing the interest of different parties – the demand side for ad buyers and the supply side for ad sellers. Here are a few other key differences.

They have different technical functions

Both DSPs and SSPs use machine learning and AI to operate. They are also both connected to large data sources and real-time bidding auctions. However, the way they operate differs. 

Supply-side platforms help publishers better manage their inventories, achieve the best possible price for their ads and improve their revenues. Demand-side platforms, on the other hand, are more focused on how ads are targeted. They allow ad buyers to set a host of parameters such as location, demographics and behaviour, to help them find the right audience for their products. 

They use data for different reasons

Both DSPs and SSPs rely on huge amounts of data to streamline the advertising buying and selling process for their users. But what each platform does with that data is different.  

Supply-side platforms use data to help ad sellers better understand their customers. The insights they provide allow publishers to charge the best price for their ads. Demand-side platforms, meanwhile, give ad buyers more information about the audience they want to reach, from their purchasing behaviour and the websites they visit to more specific insights such as what they like to eat.  

They help ad buyers save money and sellers make money

Both DSPs and SSPs plug into an ad exchange, which is effectively an online auction. However, they both have opposing roles when it comes to the money their users spend and make. 

Supply-side platforms help ad publishers sell their ad inventory for the highest possible price and maximize their earnings. A demand-side platform works the other way, helping ad buyers save money by giving them access to the best quality ad sites at the lowest possible cost.  

Introducing the Amazon DSP

Now you know the fundamentals of the two platforms, it’s time to introduce a game changer in the programmatic advertising space, the Amazon DSP

What does Amazon have bucketloads of everyone?

“Money!” Well, yes. But also – “Data!”

Using the Amazon DSP, ad buyers can tap into that unparalleled consumer purchase data to target highly qualified audiences with mobile banner ads, video ads, desktop display ads and more, not only on Amazon but also away from Amazon. The ability to reach customers off Amazon is a key benefit because it allows Amazon sellers to reach shoppers earlier in their purchase journey, long before they’re ready to make a purchase.  

So, if you’ve tried all the ad products in Seller Central and you’re still struggling to reach your customer acquisition goals, Amazon’s DSP could be the answer. And the good news is that any vendors and third-party sellers can use Amazon DSP to target potential customers.  

What are the benefits of Amazon DSP?

  1. Target unique audiences with your ads

Amazon DSP gives you the ability to target very specific audience types to improve your new customer acquisition. For example, perhaps you want to target customers who bought a product from you a year ago but haven’t done since, or better still, customers who buy from your competitors?

Alternatively, perhaps your products are perfect for customers who have just bought a wine rack, a baby’s cot or a winter coat? Now you can grab those ASINs and target them, too.

  1. Use advanced targeting features

Amazon DSPs targeting features outstrip those you’ll find on sponsored display, sponsored products and sponsored brands. As well as targeting your ads based on geographic location, demographic and date/time schedules, you can also go a step further with additional targeting that includes:

  • Mobile versus desktop-specific ads
  • Postcode
  • Ad placement – above or below the fold
  • Ad frequency per unique visitor
  • Specific domains
  • And lots more
  1. Retargeting repeat buyers 

Attracting new customers is a vital part of growing your business, but it’s also important to keep engaging customers who have bought from you before. Campaigns focused on repeat buyers help you generate a quicker return, and Amazon DSP’s retargeting capabilities can become a powerful weapon in your arsenal.  

You can use either pixel or ASIN retargeting to track potential customers who visit your website or product page on Amazon and:

  • Cross-sell complementary products
  • Introduce previous customers to new products they might like
  • Re-engage people who have visited your site before
  • Give previous customers reminders about when to repurchase your product
  1. Dynamic targeting so you can tweak your ads

The landscape can change very quickly when you’re selling online. Social media callouts you didn’t plan for, stock shortages and even things like pandemics can change the way consumers shop in an instant, which is when dynamic targeting can save the day. 

It enables you to tweak your ads and shift your strategy immediately to suit the changing landscape. That could be shifting the placement of ads, adding an ‘add to cart’ button, switching the domains your ads are featured on or focusing your spend on different ad types. That helps you adapt quickly so your ads are always relevant and ready to boost your ROI.

Ready to grow your ecommerce brand?

If you want to increase sales, acquire new customers and boost your brand’s exposure, demand-side platforms, and Amazon DSP in particular, could be a great option for you. Find out more about our Amazon services, get a free audit and contact us to discuss how we can accelerate your sales.    

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