Supply Side Platform and Advertisement Auction
Supply-side Platform (SSP) is a type of software platform that helps digital publishers sell their advertising spaces with the highest prices possible. It is one of the most important components, along side demand-side platform and ad-exchange, that facilitates the allocation of online advertising spaces between publishers and advertisers. In fact, the platform is very relevant to the auction process we have learnt in class. While the demand-side traditionally plays a more important role in ad space auction, with technology innovation, supply-side platform gradually builds a stronger presence in the auction.
To understand Supply-side Platform’s role in the ad space auction process, we first need to know the basics of ad-exchange. An ad-exchange matches digital publishers who supply the advertising spaces with advertisers wanting to place advertisements. Publishers on the supply-side will signal their available ad slots to a SSP, which will then connect the sellers to the ad-exchange and eventually the buyers. SSP plays a critical role is the process as it helps allocate the ad slots to the appropriate and often multiple ad-exchanges to return the highest yield. Simply speaking, it helps publishers to best set the criteria of bidding and have their say in the bidding process.
The entire ad space auction process is a second-priced auction. In the past, the auction is dominated by the buyers due to the more sophisticated demand-side platform. The supply side used a manual inventory management and sales system. However, with consistent improvement, SSP now helps the sellers maximize the bids in a number of ways. Firstly, it connects the sellers to ad-exchange with the most buyers, maximizing the chances to find the buyers who have the highest true values. Secondly, it now collects and analyzes user data, helping to track and target the appropriate customer group for a specific ad slot. This drastically increases the value an ad slot represents to the customer. Thirdly, the system now allows the sellers to customize their inventory management such as setting pricing floors on certain inventory levels and help sellers to best determine their needs and adjust their supply.
In general, the innovation in the supply-side platform makes the auction of ad spaces more complex and competitive. With the better system, ad slot suppliers are finally catching up with the well-developed demand side platforms and increasing their gains in the digital advertising world. Now, they have obtained more information than ever to approximate the buyers’ true values and increase their margins.
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