Forrester Wave: Demand Side Platforms Unleashing Marketing Potential

forrester wave demand side platforms

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1. Introduction To Forrester Wave Demand Side Platforms

The Forrester Wave report on demand side platforms (DSPs) is an invaluable resource for business and technology leaders who are looking to leverage customer obsession for accelerated growth. By providing a comprehensive evaluation of DSP vendors, the report assists in making informed decisions about choosing the right platform for their advertising needs. With the ever-evolving landscape of digital marketing, the Forrester Wave offers valuable insights into the capabilities and strengths of different DSPs.

2. The Emergence And Growth Of Demand Side Platforms (DSPs)

Demand-side platforms (DSPs) were introduced in 2007 to coincide with the emergence of real-time bidding. These platforms acted as intermediaries between advertisers and exchanges, enabling transactions for publishers’ desktop display inventory through open auctions. Since then, DSPs have continually evolved to meet the changing needs of the industry.

• DSPs emerged in 2007 alongside real-time bidding.
• They facilitate the trading of publishers’ desktop display inventory through open auctions.
• DSPs have expanded their role and capabilities over time.
• These platforms serve as a connection between advertisers and exchanges.
• DSPs play a crucial role in the programmatic advertising ecosystem.

“DSPs have revolutionized the way advertisers connect with publishers and purchase inventory in real-time.”

3. Evaluating The Current State Of DSPs

In the 2010s, Forrester conducted evaluations of various DSPs. However, none of the platforms that were assessed during that time remain in business today. This demonstrates the ever-changing nature of the DSP landscape, where constant innovation and adaptation are crucial for survival. Despite the turnover, DSPs continue to be integral components of brands’ and agencies’ advertising technology (AdTech) stacks.

4. DSP Usage Among US B2C Marketing Leaders

According to Forrester’s Q1 2023 B2C Marketing CMO Pulse Survey, 78% of US B2C marketing leaders are utilizing two or more DSPs. This statistic highlights the widespread adoption and recognition of the value offered by DSPs in the modern marketing landscape. As the industry evolves, DSPs are becoming increasingly essential for reaching and engaging target audiences effectively.

5. The Significance Of DSPs In Adtech Stacks

DSPs, or Demand Side Platforms, are essential components of AdTech stacks for brands and agencies. These platforms empower advertisers by offering comprehensive management of audiences, channels, and publishers. Through automation and real-time optimization, DSPs enable marketers to make data-driven decisions that yield superior results. In an ever-evolving advertising landscape shaped by consumer expectations and technological advancements, DSPs equip marketers with the necessary tools to stay ahead of the curve.

6. Key Features And Benefits Of DSPs

The definition of DSPs (Demand Side Platforms) has evolved to include a range of functionalities beyond their original purpose. Besides effectively managing display inventory through real-time bidding, DSPs now offer additional capabilities such as commerce media, cross-channel video advertising, and identity resolution. This expanded feature set enables marketers to tap into exclusive and direct signals of consumers’ intent, along with durable identity solutions. Consequently, DSPs are now competing on the strength of these valuable signals, as well as their expertise in people-based marketing and proprietary audience insights.

• DSPs have expanded their functionalities beyond managing display inventory.
• They now offer commerce media, cross-channel video advertising, and identity resolution.
• Marketers can access unique, direct signals of consumers’ intent and durable identity solutions.
• DSPs are increasingly competing based on the strength of these signals, people-based marketing, and proprietary audience insights.

7. Expanding Functionalities Of DSPs

DSPs have experienced a shift in focus. They are no longer just managing ad inventory, but also utilizing data to improve targeting and personalization. In order to achieve this, DSPs are investing in identity solutions that reduce signal loss and enhance user experiences. By leveraging these expanded functionalities, marketers can optimize their advertising strategies and provide more relevant and personalized experiences to their target audience.

• DSPs are now not just managing ad inventory but also utilizing data for targeting and personalization.
• Identity solutions are being adopted by DSPs to mitigate signal loss and enhance user experiences.
• Marketers can optimize their advertising strategies and offer more relevant and personalized experiences by leveraging these expanded functionalities.

“DSPs have seen a shift in focus towards not only managing ad inventory but also capturing and utilizing data to enhance targeting and personalization efforts. As a result, DSPs are investing in various identity solutions to mitigate signal loss and enhance user experiences.”

8. Refined Focus And Competition Among DSPs

With the growing emphasis on data and signals, Digital Signal Processors (DSPs) are now prioritizing the provision of unique and direct access to these resources. Various platforms are in competition, with strengths and reliability of signals being key factors. Additionally, the ability to utilize people-based marketing and proprietary audience insights is crucial. This competition fosters innovation and provides marketers with a diverse array of DSP options to align with their goals and requirements.

• DSPs are focused on providing unique and direct access to data and signals
• Different platforms compete on signal reliability and strength
• The ability to leverage people-based marketing and proprietary audience insights is important in DSP selection
• This competition promotes innovation and offers marketers a wide range of options

9. Top Factors Influencing DSP Selection

When choosing a DSP (Demand Side Platform), marketers consider several factors. Among the most influential factors are the quality of audience insights and reporting capabilities offered by the platform. Marketers rely on these insights to guide their strategies and make data-driven decisions.

A robust reporting system is essential for tracking performance and understanding the effectiveness of campaigns, enabling marketers to optimize their advertising efforts and achieve their desired outcomes.

• Quality of audience insights: Marketers need accurate and detailed information about their target audience to effectively reach and engage them. A DSP that provides comprehensive audience insights can help marketers understand their audience’s preferences, behavior, and demographics, allowing them to tailor their advertising messages accordingly.

• Reporting capabilities: Marketers need access to detailed reports and analytics to measure the success of their campaigns. A DSP with advanced reporting capabilities can provide insights into key performance metrics such as impressions, clicks, conversions, and return on investment. This information is crucial for evaluating the effectiveness of different marketing strategies and making data-driven decisions.

With the right DSP, marketers can leverage audience insights and robust reporting capabilities to optimize their advertising efforts and achieve their desired outcomes.

10. Investment In Identity Solutions For DSPs

Identity solutions have become a significant area of investment for DSPs. As cookies and other traditional tracking methods face increased scrutiny and depreciation, DSPs are actively seeking alternative ways to capture and utilize user data while respecting privacy standards. These investments ensure that DSPs continue to provide valuable services to marketers in a privacy-conscious era. By leveraging identity solutions, DSPs can deliver more accurate targeting, enhance audience segmentation, and improve performance across channels.

With the expansion of functionalities and the focus on capturing meaningful signals and user identity, DSPs empower marketers to unlock the potential of customer obsession and drive accelerated growth. By considering the factors outlined in the report and leveraging identity solutions, marketers can make informed decisions and harness the power of DSPs to deliver impactful and targeted advertising campaigns.

FAQ

What does a demand side platform do?

A demand-side platform (DSP) is a powerful tool for advertisers to automate the process of buying advertising. By utilizing automation, DSPs enable advertisers to efficiently purchase high-quality traffic across various platforms, particularly in the mobile advertising space. With minimal friction, DSPs greatly streamline the process and enable advertisers to reach their target audience effectively at scale.

How do demand side platforms make money?

In addition to transaction fees, demand side platforms (DSPs) generate revenue through a variety of methods. One way is by offering additional features or services that advertisers can choose to opt into for an extra cost. These may include advanced targeting options, real-time analytics, or optimized campaign management tools. By providing enhanced functionalities that cater to the specific needs of advertisers, DSPs can generate additional income.

Another approach to monetization is through data licensing. DSPs accumulate vast amounts of valuable user data, including browsing behavior, demographics, and interests. They can leverage this data by offering it to advertisers for targeted ad campaigns or to third-party companies for market research purposes. Licensing data allows DSPs to generate revenue while maintaining user privacy, as the data is typically anonymized and aggregated before being shared.

How does a demand side platform DSP determine what to bid for each ad?

A demand side platform (DSP) determines what to bid for each ad through a process called real-time bidding (RTB). This process occurs within milliseconds when a user loads a web page or engages with an app. The DSP analyzes various factors such as the user’s demographics, browsing history, and the context of the ad placement to estimate the value of the impression. Using this information, the DSP places a bid that reflects the perceived worth of the ad impression, aiming to secure the ad placement at the most competitive price possible. The bidding process enables DSPs to make efficient and informed decisions, ensuring that the ads with higher potential for engagement and conversion receive appropriate bids.

What is a DSP publisher?

A DSP publisher refers to a publisher who utilizes a demand-side platform for programmatic advertising. In this context, the publisher makes their ad inventory available for bidding through the DSP, allowing advertisers and media buying agencies to automatically bid for and purchase ad space across various mediums such as display, video, mobile, and search. DSP publishers enable a more efficient and streamlined process for advertisers to reach their target audience across a diverse range of platforms, while also providing publishers with a wider pool of potential buyers for their ad inventory. This symbiotic relationship between DSPs and publishers facilitates a more automated and data-driven approach to digital advertising.