The Relationship Between DSP’s and Ad Exchanges Explained With A Simple Analogy
by Stacey Subject, Platform Account Lead at Centro
It’s no secret that programmatic has exploded in recent years – and while it’s opened up opportunity in the industry, it also means we’re inundated with unfamiliar jargon, fancy new technologies, too many resources and platforms to count, and new ways of doing business. It’s easy to feel overwhelmed and no one would blame you if you found it hard to keep up.
But, with 2017 set to be another benchmark year in programmatic media, it’s become increasingly important to understand the tools we’re using in the industry. To help with that, we will break down this crazy, cluttered industry we call digital media into bite-sized and easy to understand analogies.
First up: the mall analogy, which explains the relationship between DSPs and ad exchanges.
How could DSPs and exchanges possibly relate to a shopping mall? Let’s talk programmatic: a DSP is the mall, and the ad exchanges are the stores within the mall. Just like you’d go to the mall to buy clothes from a bunch of stores that stock different inventory, you’d go to a DSP to access ad inventory from a bunch of exchanges at the same time.
Let’s get even more specific: Think of an ad exchange as Gap. Gap can be found in the mall, or multiple malls, or at its standalone brick-and-mortar store. That’s exactly how you should picture exchanges working. Exchanges can integrate with a few DSPs or with every single DSP on the market. Meaning some exchanges are widely accessible or more accessible than others – just like a clothing store. And some exchanges are specialty and focus on specific types of inventory – just like stores in the mall.
Think of it this way: You can get a lot of the same items at different stores. Going to the mall to buy a white T-shirt? You can buy it at Gap, or you could get it at Sears, or Nordstrom. The shirts might differ in quality and price, but they’re all white T-shirts. And that rings true of exchanges, too. Not all exchanges offer the same quality of inventory or the same price, but they sell similar things.
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