When buying ads, it’s important to understand what’s what. Unfortunately, for those new to the industry, there are more than enough terms and buzzwords to get you completely swamped with information before you’ve even started. The best thing to do is to take things a step at a time, and when you come across something you don’t understand, take a moment to get to grips with what it means before looking for other solutions. One such question that we hear asked a lot is “What’s the difference between using a DSP and an Agency Trading Desk?”
This is an important question, and it’s popped up a lot more recently, following the increase in popularity of ATDs. We’ll be going over the basics of both, before explaining how each differs from the other.
What is an Agency Trading Desk? (ATD)
Firstly, let’s take a look at what an agency trading desk is. Shortened to ATD, agency trading desks buy large inventories of media for the purpose of re-selling it to advertisers. They act as an independent platform that can provide their clients with ads that are going to serve them well.
Through RTB and programmatic buying, those who choose the agency trading desk route can pick up media in real-time that suits their needs and is aimed at particular audiences. Because ATDs buy and re-sell all of their media, they can ensure that their clients can bid real-time on audiences that will be profitable for each client.
The real-time bidding of display media within an agency trading desk happens similarly to the stock exchange, and prices will fluctuate constantly, depending on activity within the industry.
What is a Demand-Side Platform? (DSP)
A demand-side platform, or DSP for short, is an online platform that allows buyers to trade and bid in real-time for display ads. Buyers can bid for the cost of certain performance metrics, such as CPA (cost per action) or CPI (cost per install.)
Because DSPs rely on performance metrics, they have been constantly developed to provide highly accurate results. When you pay a certain price for a certain number of installs, for example, you can usually expect to get very close to that amount of installs for the price you pay.
DSPs allow buyers to track results carefully so that they can gain information about their ads and better optimize their future advertising campaigns.
The biggest positive point for DSPs is their unique ability to provide targeting and optimization help, a bidding platform and wide access to a large inventory all from one interface.
What’s the Difference Between Using a DSP and an Agency Trading Desk?
So, now that we have the basics of both DSPs and agency trading desks down, we can start to talk about the difference between using the two. Whilst the debate of “which one is best” is often left untouched due to so many varying factors between both platforms, we can talk about what’s different.
Perhaps the biggest difference between both DSPs and ATDs is the way ad inventory is acquired and distributed across both platforms. In the case of agency trading desks, most, if not all of the display inventory purchased for re-selling is bought directly through an ad exchange, instead of going through ad networks.
This basically drops the price down for the agencies and allows them to provide a more direct experience to their clients. Many ATDs now focus on providing the most personalized inventory they can for their clients, which is easier because the middleman has now been cut out, creating a more direct exchange.
DSPs on the other hand manage and optimize display inventory purchases, ensuring that clients are given the most direct results for the money they are spending. DSPs are often useful for showing clients what media to purchase and what media format to use, depending on the buyer’s own needs.
Either way, both ATDs and DSPs have managed to cut out costs by avoiding ad networks, and instead of giving clients access to real-time bidding platforms. Both DSPs and ATDs allow the end cost of inventory to be reduced for buyers and bidders, although the way they approach that is slightly different, as explained above.