WHITE PAPER How to Select the DSP That’s Right for Your Business October 2013 How to Select the DSP That’s Right for Your Business What is a DSP? Demand-side platform (DSP) technology solutions support the real-time buying of digital advertising. A DSP automates media buying across ad exchanges and publishers with unified targeting, data, optimization, and reporting. Using real-time bidding for transactions, a DSP evaluates each ad call against campaign parameters and determines when, where, and at what price to deliver an ad to a user. To learn how a DSP deploys a digital advertising campaign, see The Life of an Ad. This guide from Turn tracks the journey an ad call takes through the technology ecosystem. Marketing professionals increasingly rely on demand-side platform (DSP) advertising technology to assure digital campaigns drive their business goals as efficiently as possible. Faced with many competitive offerings, how do you choose the right DSP, one that helps you implement ad campaigns precisely and effectively? Choosing a DSP vendor to partner with can be tricky. If you’re not intimately aware of how DSPs work, how can you decipher the critical differences between providers? And how do you start to vet which technology is best suited to support your advertising goals? To help clarify what can be a complex process, it’s important to evaluate the actual value the DSP provider brings to marketing activities, which is the ratio of your cost to the actual results the DSP delivers. To help you make that evaluation, consider the following: •Scalability: How far can the DSP expand your reach and frequency? •Optimization: Can the DSP optimize to your business goals? •Return on investment (ROI): Can the DSP significantly increase your return on ad spend? •Transparency: Will you have a clear understanding of how the DSP attains its results and will the partner provide key insights to improve future advertising spend? Taking a close look at how a DSP delivers on these important characteristics can help you sort through these vendors and choose the partner that delivers the right value for you. Strength in Scale Scale is a DSP’s brawn—its ability to find more of the right customers. Scale is a combination of a DSP’s reach and frequency. It’s an indicator of the number of bid requests the DSP can receive and how fast it can make decisions on those queries. Reach A robust partner ecosystem is a key component of scalability. A technology platform is only as good as the sum of its parts, and marketers can leverage a DSP’s existing relationships with inventory, data, and service providers for maximum campaign impact. Frequency Queries per second (QPS) is the measure of how many times a DSP gets called to make a bid on an ad placement to reach a user. A greater QPS represents the speed and frequency of analyzing and acting on those bids. It’s a simple numbers game—greater scale leads to greater bidding visibility and provides decision engines with more information. After making a bid to reach a unique user at a specific price, the DSP learns if the price was accepted. Denial tells the DSP it may require a higher price to win future bids. White Paper | How to Select the DSP That’s Right for Your Business 2 Real-Time Optimization and Machine Learning DSP Comparison by Scale Queries Per Second (QPS) 1.2M Accurately predicting and maximizing advertiser value 1.0M 1.0M 39.8% 800M 600K 400K 200K 0 If a DSP’s scale is its brawn, the ability to optimize is its brain. Machine learning is core to DSP optimization, which has three goals: Depending on the marketer’s key performance indicators (KPIs), the DSP selects a metric to gauge the ideal cost-per-thousand (CPM) impressions—or users reached. Based on real-time results, the optimization engine can consistently improve the precision of its bidding to deliver media to high-value customers. Selecting the best time and place to present to a user in a given context 100K Provider A Provider B Provider B has ten times the opportunity to bid on impressions than Provider A. This scale enables Provider B to be more selective when it bids. Provider B can also evaluate bid prices more accurately with significantly more data powering its optimization engine. For every impression, the DSP must determine, out of all impressions available, which is most likely to receive a favorable response from a user in this context. To do that, a DSP needs to evaluate thousands of data points from users’ anonymous profiles, website categories, and inventory brand-safety information in less than 0.005 seconds. Satisfying all campaign needs Every campaign has a set of goals and constraints. Goals may be expressed in conversions or actions, such as purchasing a product or opting-in to a newsletter. Constraints are the limits the advertiser imposes on the campaign, such as budget, campaign objective and length frequency (number of times each user should see an ad in a set period), and target audience. Satisfying both at the same time is monumentally complex—your DSP should ensure your constraints are not counter to your campaign goals. Evaluating Return on Investment (ROI) Be sure your business needs are met by the DSP you choose, based on factors like their infrastructure, features, benefits, and long-term vision. ROI is based on results; to assess it, you need information about the DSP. Short-term points of evaluation include the following: •Are you able to target your audiences across all channels—wherever your audience might be? •Are you able to see how your campaign dollars are being spent—across data, inventory, and technology fees—any time you want? •Does your reporting show, in real time, how media dollars are spent and if a campaign is reaching its goals? •Is information easily accessible and clear so you can quickly bring it back to your organization? •Are you getting what you pay for? Over the longer term, you may want to consider if the DSP has capabilities that help construct query-based analytics to directly address business questions and determine if their solution can easily integrate with your data management platform (DMP). White Paper | How to Select the DSP That’s Right for Your Business 3 Clarity at the Moment of Decision Clarity provides actionable insights Transparent access to DSP data paired with a robust analytics solution can transform the way you make decisions. No longer limited to analyzing traditional metrics like clicks and view-through actions, queries can dig into deeper insights and unexpected trends. Examples of unexpected insights: • Republicans in Texas typically don’t buy sneakers • Individuals with PhDs are more likely to buy online tax software Marketers rely on the efficiency of offloading day-to-day campaign management supported by a DSP and real-time bidding. But you also need to be sure your DSP provides direct access to every element of your campaign so you can be in control and make precise decisions at critical moments. Find out if potential DSP partners can give you all the information you need to evaluate campaign performance and make quick adjustments. With a cross-channel DSP, your campaign can be delivered across all ad formats and devices (display, video, mobile, and social) and its performance can be optimized in real time—but only if you have transparent direct access to DSP data and processes. With that transparency, you can test alternative creative and messaging to uncover unexpected results and adjust campaign parameters for better use of your ad budget. Does the DSP provide simple checks and balances to verify how much you’re paying for inventory, data, and technology fees? The more information you have, the more effective you will be when managing media dollars, analyzing results, and making future strategic and tactical adjustments. Sort for Value A DSP’s scale, ability to optimize, impact on ROI, and transparency are the keys to its ability to deliver effective marketing campaigns. Considering these factors together will help you go beyond looking at cost alone and determine if you’re obtaining genuine value. By selecting a DSP best suited to your digital advertising objectives and business strategy, you will be empowered to carry out more complex analysis and problem solving. Discovering new characteristics and trends about your customers helps you dig deeper into the layers of insights you can use to inform your advertising strategies and better engage with your audience. Learn how two global brands evaluated DSPs and, as a result, exceeded campaign objectives. Retail: Scale and Optimization in Action Turn Media Budget $17,785.22 CPM Competitor* $18,045.99 $0.60 $2.50 29,651,353 7,231,985 Clicks 21,189 11,402 CTR 0.07% 0.16% CPC $0.84 $1.58 Coupon Conversion 1,690 104 $10.52 $173.52 Impressions CPA * Test ran in the month of April 2013. In choosing between two DSPs, a global retailer through it’s agency Sq1 closely evaluated each platform against the goals of scaling campaigns to drive coupon conversions and optimizing for low cost-per-click (CPC). Taking advantage of Turn Campaign Suite’s scale, the retail brand reached a larger pool of potential targets with more than 29 million impressions at $0.60 CPM. Platform optimization enabled more than 1,500 coupon conversions than the competitor, and Campaign Suite targeted and delivered ads to users who were more likely to convert. In the end, Turn’s advantage in scale and optimization—which resulted in higher coupon conversions and an CPC below $1.00—produced a cost-per-acquisition savings of 94%. “After testing multiple platforms, our platform choice was obvious. Turn’s results stood head and shoulders above the competition and our expectations. The significantly lower eCPA in particular, made the decision an easy one. Turn Campaign Suite has become a major asset to our clients’ digital campaigns.” —Brandon Bethea, Chief Conversion Officer, Sq1 White Paper | How to Select the DSP That’s Right for Your Business 4 About Turn Every day, the Turn platform analyzes more than 1.5 billion anonymous customer attributes and makes more than 30 billion advertising decisions. Turn delivers real-time insights that transform the way leading advertising agencies and enterprises make marketing decisions. Our integrated cloud platform enables data management, cross-channel advertising, and advanced analytics from a single login, along with point-and-click access to more than 100 premium technology partners. Turn is headquartered in Silicon Valley and provides its products and services worldwide. Contact us For more information about Turn and solutions for marketers, contact us: turn.li/contact2013. © 2013 Turn. All rights reserved. Turn and the Turn logo are registered trademarks of Turn Inc. Other trademarks are trademarks of their respective companies. All services are subject to change or discontinuance without notice. October 2013 White Paper | How to Select the DSP That’s Right for Your Business 5