If you’re an advertiser accustomed to purchasing inventory from individual publishers or publishers with groups of sites, working with a network, exchange or DSP is an entirely different ballgame. For one thing, you’ll be looking at information for thousands of sites instead of just one, two or a dozen. So questions like, “What are your site’s demographics?” are unlikely to yield useful information. It’s a new advertising world, one where you can give your preferred audience requirements to the network, exchange or DSP and they’ll deliver impressions to users who meet your requirements wherever they exist online.  This is instead of picking among several sites to see who has the best demographic profile and then hoping those users show up which is the way the direct buys work.  So in this brave new world of aggregated advertising with unlimited reach and scale, what questions should you ask when trying to select the right online advertising platform to manage your media buy so that you get the best return on your ad spend?

Can you apply a universal frequency cap?

If you’re working with a number of different networks simultaneously, it’s possible that your ad may delivered more than the maximum number of times to a single individual browser than is really optimal. Even premium publishers sell their remnant inventory on the exchanges so your ad could turn up for a single user from both sources more times than you would have planned if you’d had a choice. De-duping your media plan has historically been one of the big efficiency killers in display adverting and reach extension programs.  Managing your buy through a unified display advertising platform that allows for a universal frequency cap across all sources can help you reach your conversion goals in the most efficient manner.

What is the cost of the third party data you will be using to create my audience segments?

Unless a company has proprietary audience segments (which some do), they will most likely be purchasing data from a company like BlueKai, eXelate or AlmondNet. This data is not free, whether the company has a comprehensive agreement with one of the data companies that allows for the purchasing of data on platform or not. The cost will be built into the price somewhere and it may be beneficial to determine the cost of that data compared to a contextual system that targets specific keywords and key phrases or to a direct from publisher model that allows you to target certain sites or certain pages of sites.

Is the targeting used broad or narrow, optimized or fixed?

The direct buys were frequently limited in how much scale they could bring to the table.  You bought a site or a network of sites and your ads ran there, usually within a channel or two as a rudimentary form of “targeting”.  The new breed of aggregated campaigns can run as wide as the web so you need to stop and think about the approach, audience, content and scope of your campaign.  Do you want to reach a specific demographic trait like the lucrative A18 to 49?  Or is it more detailed like “Moms with Kids”?  Or do you want to run on certain kinds of content like golf equipment or hybrid SUVs?  These are fixed-type campaigns with a specific segment to reach.  Do you want to limit your campaign to only those requirements or do you want to run wider to make some serendipitous performance discoveries?  Running wide will often expose whole new pockets that perform for your brand.  We often see with our learning impressions that there are great performing segments, in audience and content and behavior, that can be exploited online to exceed goals.  These kinds of optimized campaigns run a parallel stream of wide learning media using an optimizer to maximize the learnings.  Then use your platform to scale the learnings to hit that perfect balance of pacing, price and performance.

The new frontier in advertising means asking a whole new breed of questions on how your buy will be put together. To ensure that you are getting the most return from your buy, make sure you’re asking the right kind of questions so you’re getting the kind of data you really need to succeed in a real-time world.

There’s something about advertising online that makes some marketers forget all they once knew about the marketing basics. We’ve seen it most dramatically recently in the full-scale social media pushes that some companies are making. For example, in the gold rush to grab precious social media eyeballs, all strategic concerns are forgotten. So if you’re considering moving a portion of your traditional ad spend online, here’s a list of common mistakes that we see some display advertisers make when they start managing their own campaigns for the first time.

1.  Not Testing Creative

When it comes to basic industry best practices, display is no different from any other advertising medium. Though experience helps in determining what creative, tagline or call to action will work best for your brand, the most successful advertisers allocate a portion of their spend—particularly early on in a campaign—to A/B testing creative elements. It might not seem like a color, word change, or even an exclamation point could make a huge difference, but it often does.  You test layouts and colors and fonts in your print ads so why not do it online too? Try different things online in small batches across a broad swath of media and heavy up on the components that work.

2.  Not Ramping-up Properly

Any campaign can benefit from a ramp-up period. The temptation at the start of a campaign is to want to see dramatic results quickly. However, particularly when you’re working within an auto-bid or optimized framework, the results will be better later on if the campaign starts slower and makes common sense optimization changes incrementally until the optimum performance pockets are found and scaled. This lets your platform of choice learn where the valuable impressions are and pick more like those in the future.

3.  Not Focusing on Performance

With the proliferation of all sorts of data, there is a strong temptation to want to limit buying to a very narrow demographic segment because you have always marketed to that particular audience effectively. However, just because you can buy highly specific segments doesn’t mean you should when online. Most campaigns are more effective when there are a wider range of potential impressions to bid on. Some campaigns can benefit from a very high CPM and a very narrow slice of the population, but this is not true for most advertisers. If this is your first foray into display, cast your net a little wider and look for those wonderful serendipitous discoveries that work for your brand.

4.  Not Addressing Saturation

You can saturate your audience with a message in any medium and nowhere is that more true than when you are online because it’s so easy to acquire massive amounts of media.  It’s easy to launch your campaign, arrive at the right media mix and creative elements, then let it run its course.  But a long, multi-month flights should have multiple creatives and messages ready if and when performance drops off.  A smart frequency capping strategy helps but even with just a few daily exposures your customers can get turned off quickly.  Change it up regularly and see if that doesn’t keep the conversions coming right up to the ending bell.

If you can avoid these simple newbie mistakes you’ll be on your way to a successful display campaign. All it takes is a little know-how, a little experience, and a lot of common sense and you will quickly find the combination of tactics that work for your particular brand online.

Reprinted from iMedia Connection

Overview:

DSPs are really just networks in disguise, they will make networks obsolete, and are a fad with no real staying power.  All false.  In just a few short months, the term demand-side platform (DSP) has become ubiquitous in the online advertising industry. It has become synonymous with all things real-time bid, exchange-sourced, display advertising — in many cases replacing the mainstay term “network” as the model of choice for advertisers. All kinds of media brokers are now scrambling to offer a DSP solution, relegating words like “network” and “optimizer” to the dustbin of display terminology. But as more platforms wade into the opportunity waters, it seems like an equal amount of fog is being injected into industry discussions. So I thought it would be an opportune time to lift some of that fog and expose several of the bigger DSP myths being perpetuated today.

Myth 1: DSPs are really just networks in disguise

False. There are some real differences between DSPs and networks, but recent trends have blurred those lines and given birth to this popular myth. At a fundamental level, traditional networks rely on a large stable of direct publisher relationships to deliver premium placements, easy reach, and ample scale, while owning the media risk and performance responsibilities. Many of these traditional networks live on today amid the DSP wave, successfully delivering campaigns along the way. But networks have begun to rely on exchanges as easy aggregation points for quick scale, and that is what started the move to DSPs. Then when the networks began to layer on automated optimization and advertiser-facing controls alongside their exchange-sourced media — either managed or self-service — they started to look like a lot like DSPs. This is how the whole DSP phenomenon began to accelerate. As networks began to rely heavily on exchange-sourced media while automating the trafficking process and exposing levers and knobs to the advertiser, some essentially became demand-side platforms. With the scale of the real-time bid exchanges and external facing controls, yesterday’s traditional ad network becomes today’s “hot” DSP. But there aren’t going to be as many DSPs as ad networks — read on for why.

Myth 2: DSPs will make networks obsolete

False. It will remain so until all available inventory is transacted on the exchanges. That said, DSPs are creating a “sofa bed” problem (neither a sofa, nor a bed) in the network business. At one end are networks — and publishers in some cases — delivering high-value inventory perhaps with custom or innovative creative. At the other end is the pure performance network that shoulders the media risk and runs cost-per-action performance campaigns. In this scenario, the exchanges are a fabulous source of cheap inventory for the performance networks. In the middle of this are the networks with a rapidly eroding publisher base. It is these networks that are in the greatest danger of obsolescence.

Myth 3: Using a DSP means you get brand-safe campaigns

False. It seems like brand safety is being treated like transparency in our industry. Everyone offers it in one form or another, but like transparency, brand safety means different things to different organizations. Just like transparency, everyone defines brand safety differently. There is one thing that separates effective brand safety from all the other forms of impression analysis and delivery verification out there today: preemptive filtering. Is your flavor of brand safety truly preemptive? Or is the “brand safety” you are getting really just post-impression analysis? Is it reactive?

Automatic brand safety is another of the industry myths perpetuated by networks rushing a DSP to market. Real brand safety, meaning a demonstrably safe environment for a brand advertiser to promote its message online, comes from truly preemptive brand safe filtering. But in practice, pre-impression analysis for relevance and safety is difficult to do. Evaluating a billion impressions a day for applicability takes a robust platform and intelligent integration with all of the real-time sources – and this requires investment in technology and people to do it right. But preemptive filtering pays huge dividends in efficiency and thus returns. With truly preemptive brand safety, you only buy what is safe and there is no waste. No wasted targeting, optimization, time, or ad-spend.

Myth 4: There are dozens of DSPs today, and there will soon be hundreds more

False. There is no shortage of organizations claiming to be a DSP. But you can count on one hand the number of solution providers able to deliver a truly successful DSP campaign (perhaps even minus a couple of fingers). In the heyday of networks, there were reportedly more than 300 ad networks out there, but few had a significant amount of their own proprietary technology. It is the large, technology-rich networks that have successfully transitioned to become real DSPs. The rest are scrambling to rely on relationships for their technology, as they had little or no technology of their own to expose when the DSP tsunami hit our industry’s shores. Because of the technology required, there will be far fewer successful DSPs than there were ad networks. Dozens? Maybe somewhere down the line. Hundreds? No way.

Myth 5: DSPs are a fad and will not have real staying power

False. Far from a fad, the DSP trend is about control, efficiency, and profitability. Advertisers never wanted to outsource all of their control; they did it for the quick scale and reach that networks provided. Now that the exchanges have matured and have exposed real-time bid APIs, control can move back to the advertisers, while retaining all of the scale and reach that networks can offer. Once we go down this road, there will be no turning back. The DSP trend is causing a fundamental change in the nature of how display media is used.

With any significant new trend, there is bound to be some confusion. Hopefully this clears the air around some of the more prevalent myths in our industry. There are sure to be more myths and many different viewpoints, but this is a start. What is certain is that the trend toward the self-service DSP model is going to have some staying power. It has already made an irrevocable impact on how display media is brokered and continues to drive upheaval. It was way back in 475 BC that the Greek philosopher Heraclitus said, “The only constant in life is change,” and those words are just as true today. The display advertising industry has gone through constant change since Hotwired ran the first banner ad in 1993, and the nimble organizations will be the ones that continue to flourish.

Nearly every online marketer is concerned with transparency and brand safety.  These seem to be the biggest roadblocks to brands embracing display.  A quick search on AdExchanger reveals a dozen articles on both subjects in the last few months.  We’ve all talked about it yet there still seems to be more misconceptions than fact surrounding what is possible when it comes to real brand safety.

In April of 2010 Winterberry Group LLC reported that “transparency and brand safety have conspired to inhibit billions in potential online display ad spending.”  Brand safety continues to undermine a broad investment in display advertising by brand advertisers despite the obvious efficiencies being delivered by today’s ad networks.  This is because truly preemptive brand safety is difficult so most have settled for simple post impression verification and are therefore not getting a truly brand safe environment for their message.  But the DSP trend changes all that.

With the advent of contextual display advertising, a host of new advertising opportunities opened up for marketers across every industry.  Whether contextualization is done at the site level (i.e. ESPN.com is about sports) or at the page level (i.e. automotive content on CNN.com), the ability to target ads around content—in addition to demographic and behavioral profiles—is pretty powerful stuff.  But with these big opportunities comes an equal amount of risk.  Imagine an automotive ad next to a news story about a horrific car crash or an ad for a vacation package next to tsunami news coverage of the same destination.  We see it in contextual search as well as display.  It’s enough to make any brand marketer anxious about any sort of online advertising.

The good news is that advances in targeting technologies and demand-side platforms (DSP) with real-time bidding (RTB) are creating truly brand safe environments for brand advertiser.  But like transparency, everyone defines brand safety differently.  There is one feature that separates effective brand safety from all the other forms of impression analysis and delivery verification out there today.  It‘s preemptive brand safety.  Is your trusted flavor of brand safety truly preemptive?  Or is the brand safety you rely on from your DSP really just post impression analysis disguised as safe filtering?  This is another great myth in our industry often perpetuated on purpose only because preemptive is difficult to pull off.

Real brand safety, meaning a demonstrably safe environment for brand advertisers to promote their message online, comes from sanitizing the ad space before the ad is served.  Of course pre-impression analysis for relevance, performance and safety is very difficult to do so it’s the least prevalent form out there.  Evaluating billions of impressions a day for relevance takes a robust platform and deep integration with all of the real-time bid aggregation points.  But it pays huge dividends in both safety and efficiency by guaranteeing quality impressions and eliminating the need for pass-backs.  With truly preemptive brand safety you only buy what is safe with no waste in the equation.

But when pages are not categorized for meaning in advance, ads get served next to inappropriate content and the advertiser simply gets a report indicating that it has happened again.  That isn’t preemptive brand safety, that’s reactive reporting.  It’s the equivalent of closing the gate after the cows get out (and wander down the middle of the highway disrupting traffic and endangering your brand investment).

Everyone knew it would take third-party providers to deliver real brand safety.  Back in March, Jonathan Margulies at Winterberry Group acknowledged as much right here on AdExchanger.  It isn’t in the publisher’s best interest to exclude their own content from advertising—for a publisher the more bidders the better.  The interest in such technology falls on the demand side but most advertisers lack the engineering infrastructure to build such a solution.  In the display advertising landscape, providing preemptive brand safety is the responsibility of the demand-side platforms.  Various platforms provide this ability in varying degrees – from zero to truly preemptive.  Ask the question.  Make sure you are getting the truly preemptive kind that boosts efficiency and return on spend.

Reprinted from AdExchnager.com Data-Driven Thinking column, a media community blog containing fresh ideas on the digital revolution in media. Follow LucidMedia on Twitter @lucidmediaVIP and follow AdExchanger.com @adexchanger.com.

It seems like “brand safety” is getting to be like “transparency” in our industry; everyone offers it in one form or another but like transparency, brand safety means different things to different people.  And just like transparency, everyone defines brand safety differently.  There is one thing that separates effective brand safety from all the other forms of impression analysis and delivery verification out there today.  Preemptive.  Is your flavor of brand safety truly preemptive?  Or is the brand safety you are getting from your demand-side platform (DSP) provider post impression analysis?  Is it reactive?  This is another of the industry myths perpetuated by other solutions rushed to market.  Real brand safety, meaning a demonstrably safe environment for a brand advertiser to promote their message online, comes from truly preemptive brand safe filtering.  But in practice pre-impression analysis for applicability and safety is very difficult to do.  Evaluating a billion impressions a day for applicability takes a robust platform and intelligent integration with real-time sources.  But it pays huge dividends in efficiency.  With truly preemptive brand safety the pass back is meaningless.  With truly preemptive brand safety you only buy what is safe and there is no waste.  No wasted targeting, optimization, time, or ad spend.  Make sure your brand safety is preemptive before you put your message out there.

We recently talked John Ebbert, the publisher and managing editor at AdExchanger.com, regarding our big funding news story.  Here are some of the most frequently asked questions.

Q: Please discuss your new round of funding and why you chose MMV.

A:  We had many options available to us in this round but MMV was the ideal funding partner at this stage in our execution plan and capitalization strategy.  MMV is truly dedicated to providing timely and effective growth capital to emerging technology companies like LucidMedia.  They are focused on the North American market and the amount of capital they typically provide ranges from $1.5M to $10.0M which was also a perfect fit for us.

Q: Where do you see the $4.5 million going?  Any critical needs such as “feet on the street”?

A:  We are applying the proceeds from this funding round to expand on our recently launched self-service platform (www.LucidMediaDSP.com) that gives agencies and advertisers more control and enables them to more efficiently manage their display advertising campaigns. The funds are being used to bring additional capabilities to market and to do so sooner so we can better capture the escalating DSP opportunity.  And since we own the full technology stack in our demand-side platform, with the additional funds we are launching new capabilities not as disparate products but as unified new features within our platform.  It allows us to be more nimble and responsive to our advertiser’s requirements.

Q: Are there too many demand-side platforms today and how will LucidMedia differentiate?

A:  There are not really all that many demand-side platforms out there.  Much of the static in the DSP space today is centered around attracting attention in the venture capital circles.  But when it comes to getting in front of an advertiser and demonstrating real capabilities in a real product that you can actually use to deliver value and efficiency, the number of DSPs can be counted on one hand (minus a few fingers).  There are too many companies calling themselves a demand-side platform though.  We have run hundreds of successful campaigns for the majority of Fortune 500 companies out there over the last 18 months that we have been operating as a DSP.  In that time we have proven that several capabilities are unique to what LucidMedia offers.  This includes our proprietary contextual and audience targeting, ability to police a true universal frequency cap (UFC), and real-time assessment (RTA) across all sources.  In addition, our DSP provides dynamic inventory allocation across RTB sources and even premium buys, true preemptive brand safety, and campaign optimization at the page-level.  We also offer custom integrations with all 3rd party data providers, real-time bid (RTB) inventory availability insights by channel, and a server-side cookie store for proprietary audience targeting.

Q:  Anything surprise you about the reported acquisition of Invite Media by Google this week?

A:  No surprises there.  Peter Kafka broke the Google-Invite news a month ago on All Things Digital.  The industry has been holding its collective breath waiting for the big roll up for a long time now.  In March Epic Advertising acquired Connexus Corporation including the Traffic Marketplace and now Google grabs Invite.  This is likely the start of a bigger consolidation in display media.  Our focus is still on executing against the truly exciting opportunities available to us today in the still emerging DSP space.  We believe there is a considerable amount of value to be had here and we are focused squarely on positioning our technology, products, and team as effectively as possible with agencies and advertisers.

digiday:DAILY is a regular content hub and e-newsletter that features the top stories in digital media and marketing with a focus on digital content, advertising, and emerging platforms.   John Gaffney, the award-winning journalists, recently wrote a great review of our self-service launch.  Here’s what he had to say.

DSPs are going DIY. Demand-side platform LucidMedia announced the launch of a self-service version of its formerly managed service software yesterday, hoping to enable agencies and their clients to gain full-control over their targeted digital campaigns.

Ajay Sravanapudi, LucidMedia Founder and CEO, says the self-service switch will give agencies accessing an in-house, “white labeled” solution with a proprietary base of more than 14,000 targeted categories, page-level transparency, and multiple layers of filtering to protect branded advertisers from inappropriate content.  He also says the DSP has not overlooked the publishing side of the business.

“The industry trend of self service DSPs also impacts publishers positively.  Many immediately discount the notion that what is good for the demand side can also be good for the supply side of the equation. But the trend is actually good for the whole display industry,” he says. “Early on, publishers heard that the advent of mega-exchanges would only drive down display media prices.  The story was that premium inventory would be treated as interchangeable across the big networks and traded like commodities.  But the self service DSPs have actually done the opposite.  They have allowed publishers to differentiate their inventory in ways never before thought possible.  What we really faced were insufficient tools for buyers and sellers to truly value impressions properly and that is what the DSPs, and the readily available self service front ends, are doing for publishers.”

Sravanapudi also believes publishers that are creating real value and results for advertisers can now be compensated for this service through the agency self service platforms like LucidMediaDSP.  Agencies will have a new level of unified, actionable optics and insights, he says. Tools like billing and reconciliation are integrated making proper attribution a reality, allowing for true differentiation and proper valuation of the publisher’s impressions.

Among the features:

* Real-time Assessment (RTA): LucidMedia’s RTA provides immediate insights into real-time bidding availability covering up to 95% reach potential in the US;

* Real-time bid (RTB) inventory availability:  Agencies and advertisers can get real-time insights by channel and by demographics, delivering the most flexible optimization available;

* Dynamic inventory allocation:Inventory from all real-time bid sources, as well as spot buys, is automatically allocated to campaigns, enabling more efficient ad operations teams and higher returns;

* Page-level semantic transparency: Provides deep insights into what drives the desired campaign outcomes and maximum campaign performance;

* Proprietary content and audience targeting technologies: A universal frequency cap (UFC) and server-side database provide maximum control and leverage.

This weekend while many of you were sitting down to a quiet meal, LucidMedia was celebrating an historic milestone. One year ago LucidMedia processed our first real-time bid (RTB) impression. At precisely 6:45PM Eastern Time February 21st 2009 LucidMedia turned on the RTB engine in our demand-side platform (DSP) and began acquiring impressions in real-time. We have since processed tens of billions of impressions and the scale continues to grow. We are quite proud to be one of the pioneering companies behind the current real-time bid inventory acquisition wave that is sweeping our industry. And although we are a relatively new company, we are one of the first demand-side platforms operating today in what is rapidly becoming a crowded space. We saw very early, late in 2007 in fact, that advertisers needed more control and the DSP model was the future. Back then we did not call it a DSP though. It was simply a better kind of ad network where inter-mediation was streamlined, transparency was paramount, and brand safety was the dominant capability. Now it is the future of the ad network.

(Reprinted from ADOTAS) 2010 is already shaping up to be the year of real-time bidding (RTB) technologies and demand-side platforms (DSP). The availability of real-time bid access into the major ad exchanges is converging with an industry-wide preference for agency-administered ad-buying and ad-trafficking platforms.

The traditional ad network model achieved many things but has yet to deliver on the promise of truly cost-effective scale. The rules of engagement changed when downward-spiraling CPM prices forced publishers grudgingly onto the emerging exchanges to improve their yield and back-fill diminishing ad revenues. The networks had to follow their publishers and a new aggregated sourcing model emerged.

Real-time bidding is the hot feature this year and a staple of the effective DSP. Now the combined capabilities of RTB-enabled DSPs built on the exchange model are replacing traditional ad networks with a new buy-side network paradigm that is more nimble, more economical and more in touch with advertiser goals.

Control is subsequently moving closer to the advertiser, intermediation is being reduced and prices are arriving at a true market-driven equilibrium. Not only do advertisers have more control over targeting, performance and safety, but buying has become more centralized and access to inventory become more streamlined.

It is no secret that LucidMedia has one of the most robust contextual targeting engines in the marketplace, but what we have achieved in the DSP space over the last year has not been widely publicized. Late in 2008 we began engaging all of the large aggregators to co-develop RTB solutions. Next we developed an advanced, proprietary ad server to give us one of the most nimble systems available for trafficking campaigns.

We also built a unified inventory management system that could dispense with the complexity of hard-wiring campaigns to inventory sources. We included an automated optimization engine that can evaluate thousands of campaign facets in real-time, project performance trends, and govern campaign targeting based on advertiser goals.

In January 2009 we deployed the platform internally, effectively making it the industry’s  first production RTB-enabled demand-side platform. Named ADvisor DSP, LucidMedia has since executed hundreds of successful campaigns on the platform and is currently processing up to 45 billion impressions each month. This pioneering experience makes us uniquely qualified to access the necessary features of a successful RTB-enabled DSP initiative.

There are certain universal features that agencies need for any successful DSP initiative. All buy-side platforms must offer multisource RTB integration and scale, an advanced ad server, page-level contextual analysis for targeting and brand-safe filtering, audience profiling for retargeting, universal frequency capping, detailed performance roll-up reporting with discrepancy management and reconciliation, flexible and intelligent bidding strategies, the ability to leverage third-party targeting data and a managed service deployment approach.

Advanced Ad Server: A good DSP starts with an advanced ad server. Core ad serving capabilities like frequency capping, day parting and targeting are minimum requirements. The savvy agency should also look for full-featured holistic campaign management features like cross-aggregator universal frequency capping, pre- and post- impression auditing, preemptive brand-safe filtering, page-level impression verification and hyper-segmented targeting based on content, demographics, behaviors, site, location, and time of day. Discrepancy management and reconciliation are also critical aspects of the built-in ad server.

Integrated RTB: Properly integrated real-time bidding is not standardized or modularized. There is still a great deal of heavy lifting development needed to bring on each inventory source, scale and balance the volume, and bid effectively. A good DSP needs to have these problems already solved.

Intelligent Bidding: Smart bidding strategies are also critical to an agency’s bottom line. The DSP model promises that agencies can claim a larger slice of the ad spend dollar, moving it further and further away from the networks. But without intelligent and flexible bidding, that slice can be lost. Look for detailed graphing of bid price and win ratios and the tools to quickly adjust bidding per source. Look for RTB solutions efficient enough to drive bid costs below the $0.001 threshold.

Retargeting: Another aspect of the successful DSP is the ability to roll up audience and link users to performance for retargeting purposes. Reaching the right audience with the right message at the right time is a core tenet of advertising and although this applies to all mediums, display always reaches its users through a proxy device.

The right platform goes beyond simply rolling up interpolated audience facets and instead segments users into actionable profiles using third party data based on their propensity toward a desired action.

Managed Services: The concept of an agency-side buying and management platform relies heavily on managed services at the inception of any in-house DSP program. The current transitional period is favoring the managed service approach to demand-side platforms as agencies step into the traditional ad network role. Managed services allow the transition and knowledge transfer to happen in the most effective manner.

Optimization: Automated optimization is a differentiator for the demand-side platforms. Historically optimization was the mystical secret sauce of the more technical ad networks but it has become a required attribute of the full-featured DSP. Look for optimization that can juggle thousands of campaign targeting facets, project outcomes, and model performance scenarios prior to launch.

Inventory Sources: Sources and scalability are key factors for every agency to consider. The right platform needs to plug into all the large repositories as well as the more niche aggregators plus the all supply-side optimizers. This kind unprecedented impression potential, scale and broad reach are requirements for large direct response campaigns, major corporate branding promotions and scaled niche segments of very specific demographic traits.

These are the major features as well as ad network staples like brand-safe filtering, transparent reporting down to the page level and flexible targeting to content, demographics, and behaviors that an agency should look for when selecting a DSP.

The right demand-side platform allows agencies to easily audit the networks and exchanges on their media plans, efficiently acquire page-level contextually and demographically targeted inventory, ensure brand safety across all sources and most importantly enforce a universal frequency cap. The new breed of DSP with integrated RTB gives agencies pre-impression filtering, post-impression auditing, and allows agencies to cherry-pick the most effective impressions in real time and then feed their campaigns with an optimization engine that automatically maximizes return on spend.

This is reprinted from “Data-Driven Thinking”, a column on AdExchanger written by members of the media community and containing fresh ideas on the digital revolution in media.

Demand Side Platforms (DSP) are hot! I can tell by the huge agency interest, and even more eager venture capitalists anxious to get in on the latest craze. Traditional ad networks and newfangled technology platforms are declaring themselves to be DSPs. Others who did much of the evangelical spadework for DSPs appear to be stung by the sudden rush. There is now an attempt to define a “true DSP”. At this stage, a “true DSP” as defined by a list of features serves little purpose and is as much a disservice to the industry, as it is disconnected from reality. In fact, many of the current DSP competitors–those with the most significant solutions already in-market–are successfully violating that definition of a “true DSP” to the benefit of their agencies partners.

The truth is that a “fully self-service DSP” would be far too disruptive to most agencies at this early stage. There are far too many levers, knobs and buttons in a DSP robust enough to deliver the optimum cross-section of pacing, performance, and price for an agency to take on today. They range from mundane tasks like dealing with objectionable impressions and buys from non real-time sources to more arcane optimization tasks, RTB source integration, bidding strategies, discrepancy management, and post-campaign reconciliation.

As my own company has learned by providing DSP services to agencies over the past year, agencies are still not appropriately staffed to be full-fledged buy-side networks yet. Media buyers are already over worked and stretched to the limits and are looking for a DSP to do more with less. That means automating many tasks but also off-loading just as many (if not more). A managed service that facilitates knowledge transfer and leads to a semi- self-service approach is far more realistic today. The reality of the situation is simply not that black and white! At the end of the day what an agency really wants is to know what works for their clients and how to repeat those outcomes in the future. At least that’s been our takeaway. They want the data behind the performance, the audience segments that engage with their message effectively, and the easy-to-pull levers that will let them do it again on the next campaign. They want no more and no less.

It is also important to recognize that many of the most important DSP offerings are coming from the networks where the technology has matured and has been thoroughly field tested. Indeed, my company falls into this category. The networks already have the relationships and business models in place to support the early adopters. Real-time bidding is an excellent example of this necessity. To get multi-source RTB going at scale going takes a significant amount of relationship building and technical heavy lifting and many of the networks have already invested heavily in this. Discounting the network players with a single stroke, and leaving it all up to the agencies, is doing the industry a massive disservice.

There are many other aspects of a “true DSP” that were missing from the recent list as well. Our experience has been that no DSP should leave home without staples like universal frequency capping across exchanges and publishers, objectionable content filtering for brand safety, some sort of automated optimization for CTR, CPA, or eCPC and the ability to plug in others, an advanced and robust ad server capable of propagating campaign changes in minutes, seamless targeting of audiences with native and 3rd party data, and granular content targeting independent of site or section.

Only time and buyer requirements will define the “true DSP” and decide if networks and DSPs can truly coexist. The industry needs time to shake it all. The sector is too young to define the full product category or for one player to define it completely. I will conclude with a heretical prognostication–the next generation of ad network will be a hybrid DSP solution with a service layer.