A: A demand-side platform works in conjunction with a supply-side platform, which is a platform that aggregates advertising inventory sources. An ad inventory source is anywhere you might be able to deliver, write, or place an ad. An example of a destination is ESPN.com. You might be able to work with ESPN directly to put your ad on there, or you can work with a supply-side platform to deliver an ad to multiple places. Those places could include ESPN.com, NBA.com, CNN, and more.
Typically, supply-side platforms have a particular focus, like video advertising. They aggregate all video inventory, or as many videos as they can. Other supply-side platforms might aggregate as many display ads as they can, or have multiple focuses.
Supply-side platforms aggregate all the ad space, and they're basically like brokers for all these inventory destinations. Then the demand-side platform has a lot of potential media buyers. Advertisers will work with DSPs because they have ads they want to put somewhere and they don't want to work one to one with ESPN.com or NBA.com. They want to be as broad as they can and reach a wide range of sources in an efficient way.
A DSP will figure out where to place the ads based on the parameters that you want. It makes the process more efficient because it sees a wider view, which is why it's able to optimize. If you’re only working with ESPN.com and then you’re only working with NBA.com, information is not talking to each other. You're working in a silo, and you can’t optimize very quickly. So when you aggregate all the information together, you get a fuller view.
A demand-side platform is where a lot of advertising technology is consolidated and aggregated. Not only can a company push their advertising out to multiple locations in real-time using ad exchanges, but they can use the optimization algorithms of a DSP to figure out where to place their ads, or use brand safety tools to prevent fraud and placement on unsavory sites.