Difference between DSP and Ad Exchange

Key difference: DSP stands for demand-side platform. It is a buyer’s side platform. It allows digital advertising buyers to manage multiple ad exchange and data exchange accounts through one interface. An ad exchange is a technology platform that allows publishers and advertisers to connect. The ad exchange facilitates bidding on online media advertising inventory from multiple ad networks. It helps advertisers and publishers to manage and monitor ad campaigns in a multitude of formats and across thousands of websites.

DSP stands for demand-side platform. It is a buyer’s side platform. It allows digital advertising buyers to manage multiple ad exchange and data exchange accounts through one interface. In order words, DSP allows digital advertisers to buy display impressions from multiple ad exchanges through one interface.

Using a single interface has a distinct advantage. Marketers can target a very narrowly defined audience segment at scale, without having to manage multiple ad networks or exchanges. The DSPs use behavioral targeting data, collected from cookies and data exchanges, to identify the said audience segments.  DSPs also allow users to optimize based on set Key Performance Indicators such as effective Cost per Click (eCPC), and effective Cost per Action (eCPA).

DSPs let the marketers choose audience characteristics. The DSP then publishes the ads depending on the target audience. Hence, the marketer does not have to worry about picking the right websites to advertise on, as the DSP does the work for them.

Furthermore, the digital advertisers bid in real-time in the ad exchanges, while the marketers can manage their bids for the ads. This allows advertisers and brands to buy audiences rather than specific website ad placements. Real-time bidding or RTB was considered one of the most revolutionary aspects of DSPs, as the platforms do all the work of bidding and buying impressions for the marketer.

Ad exchanges as the name suggest are somewhat similar to stock exchanges. An ad exchange is a technology platform that allows publishers and advertisers to connect. The ad exchange facilitates bidding on online media advertising inventory from multiple ad networks. It helps advertisers and publishers to manage and monitor ad campaigns in a multitude of formats and across thousands of websites. Ad exchanges are touted due to the efficiencies they provide to both buyers and sellers.

Currently the most well known ad exchange is Google acquired DoubleClick. DoubleClick has become the biggest player amongst real-time ad networks. The ad exchange allows advertisers to run display ad campaigns across the Google Content Network and on YouTube.

Image Courtesy: adexchanger.com, ianthomas.typepad.com

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