Advertisers and publishers often become lost in the complexity of programmatic advertising, unsure how to navigate the key players behind real‑time auctions and what “Demand-Side Platform (DSP) and Supply-Side Platform (SSP)” really mean.
This confusion quickly translates into wasted budgets and missed revenue opportunities, as buying strategies misalign with supply‑side mechanics and neither side hits its performance goals.
Understanding the DSP vs. SSP dynamic, where DSPs automate demand‑side bidding and audience targeting and SSPs handle supply‑side yield optimization, empowers teams to streamline workflows, sharpen ad targeting, and maximize ROI in milliseconds.
In this blog, let's see what DSPs and SSPs are and how they use data for smarter bidding and yield management. Then, we’ll unpack the real‑time auction flow on Ad Exchanges and compare each platform’s core features and optimization tactics. Finally, we’ll offer actionable guidance on choosing, integrating, and fine‑tuning DSPs and SSPs within your tech stack for peak performance and compliance.
What are DSPs and SSPs?
Demand-Side Platforms (DSPs)
Demand-side platforms are software systems advertisers use to buy digital ad inventory in real time across websites, apps, and other channels. The key functionalities of Demand-side platforms include the following:
Audience Segmentation: DSPs integrate with data management platforms to group users by demographics, interests, and behaviors, ensuring ads reach the right people.
Bid Management: Advertisers set bidding strategies and budgets; the DSP automatically participates in RTB auctions, adjusting bids based on performance goals such as cost per install (CPI) or return on ad spend (ROAS).
Dynamic Creative Optimization (DCO): DSPs can tailor ad creatives on the fly, changing images, headlines, and calls to action based on real-time data and user context to boost engagement and conversion rates.
Supply-Side Platforms (SSPs)
Supply-Side Platforms enable publishers and app developers to sell available ad impressions programmatically, connecting inventory to multiple demand sources. The core features of Supply-side platforms include the following:
Yield Management: SSPs use algorithms to adjust price floors and allocation rules, aiming to extract maximum revenue from each impression.
Floor Price Controls: Publishers set minimum acceptable bids for their inventory, protecting against undervaluation.
Header Bidding Support: Header bidding leverages real-time bidding (RTB) to increase competition and publisher yield by inviting multiple DSPs to bid simultaneously before the primary auction.
Waterfall Bidding (Mediation): In waterfall setups, the SSP (or mediation platform) calls demand sources in a predefined sequence, typically sorted by historical eCPM, falling back down the “waterfall” until an ad is filled.
What is an Ad Exchange?
An Ad Exchange is a neutral digital marketplace where DSPs and SSPs come together to conduct real-time auctions for ad impressions. Publishers send available impressions via SSPs to the exchange, and advertisers bid through DSPs. The highest bidder wins, and their ad is served within milliseconds.
Ad Exchanges like OpenX focus purely on auction execution and transparency, whereas mediation platforms like AdMob or Max by Applovin handle demand-source management and SDK integration for mobile apps.
When a user opens an app and stumbles upon an ad, the SSP sends a bid request containing device identifiers, location, app ID, and encrypted first-party traits (such as prior installs) before sending it to multiple DSP endpoints simultaneously.
Each DSP receives the real-time data and compares it against user acquisition (UA) campaign rules and audience segments stored in an associated Data Management Platform (DMP) or Customer Data Platform (CDP). The DSP then applies a bid-optimization algorithm, considering target CPI, predicted LTV, and frequency capping, and responds with its bid within approximately 100 ms.
The SSP gathers all the incoming bids, enforces its price-floor logic or private marketplace deals, and conducts a second-price auction to determine the winning ad. After the auction is complete, the SSP promptly notifies the winning DSP and delivers the ad creative to the user.
2. Data Management Integration (DMP, CDP)
UA teams combine first-, second, and third-party data into a Data Management Platform (DMP) or Customer Data Platform (CDP) to create comprehensive audience profiles. To build broad segments, DMPs ingest anonymized third-party (and some second-party) audience data.
At the same time, CDPs unify first-party device events, such as level completions and purchases, in real time to support LTV modeling. These platforms then push curated segments via API into DSPs, ensuring bid requests that contain high-value user signals lead to higher bids for those segments.
This streamlined process allows you to focus on prioritizing bids for audiences predicted to have high ad engagement, rather than just raw installs. With real-time data feeds, CDPs can update audiences during a campaign based on in-game events and live behaviors, enabling dynamic bid adjustments and frequency caps to prevent oversaturating users.
Armed with data‑integration insights, let’s contrast the distinct capabilities that set DSPs and SSPs apart.
Key Functional Differences
When comparing DSP vs SSP functionality, focus not just on what each platform measures, but on how to act on those insights:
1. Targeting & Audience
DSP: Precision Acquisition
Lookalike modeling uses existing high‑value user profiles to find similar prospects across inventory, driving down CPI when new cohorts mirror top‑performers.
Retargeting cohorts allow you to re‑engage users who exhibited key milestones (e.g., reached level 5) with tailored creative; reacting to cohort retention curves reveals when to refresh ads or offers.
Geo‑behavioral segments combine location data with in‑app behavior, enabling you to pause spend in low‑LTV regions and scale in high‑ROI areas.
SSP: Curated Supply
Inventory categorization groups placements by ad format (banner, video, native) and context (premium vs. remnant), letting you select supply tiers that align with campaign goals (e.g., brand safety vs. scale).
Whitelist/blacklist controls ensure that only approved DSPs or advertisers access your inventory, maintaining eCPM by filtering out low‑quality bids and protecting brand reputation.
2. Bidding Strategies & Budget Controls
DSP: Smart Spend Management
Dynamic bid algorithms automatically adjust bids in real time based on predicted conversion likelihood, reducing wasted spend on low‑intent impressions.
Budget pacing guarding against early depletion or back‑loaded bursts, so UA teams hit daily CPI targets without manual intervention.
Dayparting controls let you shift budget to peak performance windows (e.g., evening engagement spikes), maximizing installs per dollar.
SSP: Yield Optimization
Floor price management sets minimum acceptable bids, protecting publishers’ revenue; from a UA angle, understanding floor dynamics helps you anticipate when bid levels must rise to win premium inventory.
Competition settings (e.g., private marketplace deal IDs) enable tailored bid packages for high‑value partners, ensuring stable supply even during peak season.
Deal IDs for Programmatic Private Marketplace (PMP) are unique identifiers generated by a publisher’s SSP or ad server that let you secure exclusive access to premium inventory at pre-negotiated CPM rates, avoiding auction volatility and ensuring guaranteed delivery and predictable CPI outcomes.
3. Reporting & Analytics
DSP Dashboards
CPI trends: A rising CPI indicates potential audience saturation or creative fatigue. You should A/B test new creatives or adjust lookalike thresholds when they surpass your benchmarks. If CPI continues to increase weekly, it’s important to rotate new ad formats or pause underperforming geo segments.
CPI→ROAS funnels: CPI to ROAS funnels map install costs to revenue, revealing areas where value is lost, such as high post-install churn. If ROAS at D7 is below 50% of the target, adjust the budget by reallocating to campaigns with quicker returns or shorten the payback window to D14 for a more cautious spend approach.
Cohort analyses: By analyzing LTV, retention, and churn by install date cohort, you can identify which channels drive the most valuable users. Focus spend on cohorts achieving D30 payback targets (100% ROAS) and pause channels where D7 ROAS falls below 30% of the target.
SSP Dashboards
eCPM trends: A declining eCPM indicates either reduced demand or potential issues with inventory quality. To address this, consider increasing the floor prices of underperforming ad units or partnering with premium DSPs to boost competition and improve eCPM.
Fill rate: Low fill rates suggest a lack of demand connectivity. To address this, more DSPs should be integrated with header bidding, particularly in high-traffic regions, to improve fill rates.
Auction latency metrics: High latency (>200 ms) results in missed bid opportunities, so optimizing ad server calls by compressing creatives or switching to a lower-latency endpoint can help improve the win rate.
UA teams turn raw DSP vs SSP metrics into continuous performance gains by reading these signals and acting, testing new creatives, shifting budget, negotiating deal IDs, or adding partners.
With those core mechanics, let’s explore how to turn DSP and SSP capabilities into real growth within mobile gaming campaigns.
Leveraging DSPs & SSPs in Mobile Gaming
In mobile UA, programmatic platforms are tools to execute and scale campaigns, not just abstract concepts. You should focus on DSPs’ advanced buying features and understand how publisher-side SSP mechanics affect media quality. Below, we break this down:
1. Selecting the Right DSP
Choose a DSP that excels in reaching your target mobile audience and simplifies campaign management:
Advanced targeting: Look for DSPs with rich audience segmentation (demographics, interests, in-app behavior, location) and real-time bidding to reach relevant users on mobile. The DSP should integrate with data platforms (DMPs) or first-party data for precise targeting.
Ad format and creative support: Ensure the DSP supports the formats you need (video, playable, rich media, rewarded ads, etc.). Some DSPs even include creative tools or builders to streamline ad creation and dynamic creative optimization.
Machine learning optimization: Favor DSPs with built-in ML bid optimization and fraud prevention. AI-driven DSPs can automatically adjust bids to meet goals, block suspicious traffic, and improve ROI.
Integration ease: Verify the DSP’s ease of integration with your analytics and attribution (MMP postbacks, S2S tracking) and mobile SDKs if needed. A DSP should offer robust APIs/SDKs and work with your tech stack out of the box. This ensures clean data flows and lets your UA team act quickly on insights.
Next, we’ll focus on the supply side, how to vet and nurture the right SSP relationships.
2. Evaluating & Managing SSP Partnerships
Even as advertisers, UA teams should understand the supply-side setup of their inventory sources:
Header bidding vs. waterfall: Prefer inventory from partners using header bidding (parallel auctions) rather than old-style waterfall stacks. Header bidding lets multiple demand sources compete simultaneously, boosting effective CPMs. Waterfall mediation (sequential bidding) can leave yield on the table by locking in priority orders.
Floor pricing: Pay attention to publishers’ price floors (minimum CPMs). While floors protect publisher yield, they can also cause low fill if bids don’t clear the threshold. Balance bid prices against known floors to avoid wasted bid attempts.
Transparency and fraud control: Work with SSPs that provide transparent, real-time reporting on impressions, costs, and viewability. Transparent supply paths reduce hidden fees and fraud. Good SSPs include ad quality controls and fraud detection (e.g., blocking bots, verifying viewability) to keep your budget focused on genuine installs. Demand publisher data (e.g., geo-distribution, IAP usage) to ensure the audience fits your game’s profile.
Deal structures: Consider SSPs that support private marketplaces (PMPs) or direct deals. Private deals let you target premium or niche inventory at agreed prices, which is helpful for hyper-targeted campaigns. Always review the terms (revenue share, tech fees) to clarify your spending efficiency.
Once your partners are in place, a smooth technical integration ensures you don’t waste money.
3. Integration & Setup
Smooth technical setup prevents lost data and ensures compliance:
SDKs and adapters: For in‑app campaigns, integrate openRTB server‑to‑server (S2S) setups to enable real‑time bidding, rather than DSP SDKs, as DSPs typically connect to ad exchanges and SSPs via server‑side OpenRTB protocols. If your app acts as a publisher (e.g., cross‑promo or retention ads), use in‑app header bidding SDKs (like Prebid Mobile or MoPub bidding adapters) to unify demand. Proper SDK integration or S2S setup maximizes auction participation and fill rates.
Postbacks and tracking: Ensure all install and event postbacks are correctly configured. UA teams must send conversion data back to DSPs via their MMP to fuel optimization. Use S2S postbacks where possible for reliability. Double-check that campaign IDs and deep-link parameters are passed consistently.
Privacy compliance: Verify each DSP/SSP supports current privacy standards. This means obeying GDPR/CCPA opt-in consent flows, children’s advertising rules (COPPA) if applicable, and modern mobile ad tracking rules. For iOS, ensure SKAdNetwork support (if used) and IDFA collection only with consent. Staying compliant maintains campaign stability and publisher access.
With everything live, continuous reporting and iterative testing become your secret weapons for sustained ROI.
4. Optimization & Reporting Loops
Continuously iterate using data and clear metrics:
KPI dashboarding: Define and monitor key UA metrics – eCPI (effective cost per install), CPI, ROAS, retention, LTV, CTR, etc. Use the DSP’s real-time analytics dashboard (or an aggregated BI tool) to track these by campaign, ad set, creative, and publisher. Detailed reporting helps spot underperforming segments quickly.
A/B testing: Run systematic A/B tests on creatives, targeting segments, bid strategies, and placements. For example, test different ad images or videos across similar audiences, or compare lookalike vs. interest-based targeting. Use statistical significance to determine winners and broadly deploy successful variants.
Data-driven bid management: Feed conversion data back into the DSP’s ML engine to optimize bids. A good DSP will automatically shift budget toward better-performing channels or creatives over time. Use built-in pacing and budget controls to prevent overspend.
Regular partner reviews: Review SSP reports for viewability and fraud metrics, and recalibrate floor bids or move budget if certain sources underperform. Ensure the SSP’s yield optimizations (like floor adjustments) align with your eCPI goals. Close the loop by sharing performance feedback with partners: this might mean pushing high-value audiences via a DSP or pausing traffic from low-quality sources.
UA teams can streamline growth by treating DSPs and SSPs as tactical tools. Choose platforms with the right targeting and optimization features, partner with transparent, quality-focused SSPs, and keep integrations tight.
DSPs, SSPs, and Ad Exchanges work together to automate auction-based buying and selling of ad inventory in real time. This underscores the importance of audience segmentation, bid and yield management, and dynamic creative optimization on the demand side and price-floor controls, header bidding, and waterfall mediation on the supply side.
UA teams gain precise targeting and bid-optimization capabilities by integrating first-, second, and third-party data through DMPs or CDPs. Ongoing testing, data-driven budget adjustments, and clear KPI loops, such as monitoring CPI→ROAS funnels or cohort retention curves, ensure campaigns hit cost and revenue goals while avoiding creative fatigue and wasted spend.
1. What’s the main difference between a DSP and an SSP?
Adverts use a DSP (Demand-Side Platform) to buy ad inventory and target audiences in real time, whereas an SSP (Supply-Side Platform) helps publishers sell impressions and maximize revenue via yield management.
2. How does an Ad Exchange fit into programmatic buying?
An Ad Exchange acts as the neutral marketplace that connects DSPs and SSPs, running real-time auctions so the highest bidder’s ad is served to the user within milliseconds.
3. Why integrate a DMP or CDP with DSPs/SSPs?
Data platforms aggregate first-, second, and third-party signals into audience segments, allowing DSPs to bid more effectively and SSPs to set smarter floor prices based on user value.
4. What’s header bidding, and why does it matter?
Header bidding lets multiple DSPs bid simultaneously on the same impression before the main auction, increasing competition and publisher yield compared to sequential “waterfall” setups.
5.How can I optimize campaign performance continuously?
Use DSP dashboards for A/B tests on creatives and pacing rules, monitor SSP metrics like eCPM and fill rate, then adjust bids, floor prices, and partner mixes based on those insights.
