Demand Side Platforms (DSPs) Deliver Users Cost-Effectively | Industry Insights | All MKC Content | ANA

Demand Side Platforms (DSPs) Deliver Users Cost-Effectively


One of the biggest marketing technology events of 2023 was the bankruptcy filing of the storied Demand Side Platform (DSP), MediaMath in June.

Despite the closure of MediaMath, DSPs are still delivering strong results for marketers.

Though DSPs have been in use for over a decade, they're gaining traction because DSPs simplify the digital media buying experience while improving performance with precision ad targeting and optimization.

DSPs enable performance marketers to improve performance using several strategies. DSPs can receive injected audiences from mobile measurement partners or data management platforms to leverage in high-value audience targeting. The more advanced among them can use both advertiser data for advertiser-specific marketing efforts, as well as proprietary data from media buying insights. This usage builds "app-a-like" inventory-based campaigns and "look-a-like" audience-based campaigns.

By understanding which traffic sources and other marketing partners delivered users with the greatest life-time value (LTV), marketers can learn how to improve performance working with DSPs. By analyzing campaign data, including event (purchase, deposit) data, we're able to understand which creative and user journeys are most effective in generating users with the greatest LTV and engagement.

For example, when algorithmically optimizing from the macro level (exchange) and down to the micro-level (placement ID), across all the different data segmentations (creative, manufacturer, device, language settings, OS, day, time, etc.), Zoomd were able to double return on ad spend (ROAS) for one client. But the secret to successful campaigns via a DSP is to focus on optimizing performance for revenue-driving post-install events. Though that's tougher today given privacy-centric legislation, it's still possible with the data that is available and precision optimizations.

Data from Technavio expects DSPs to grow by nearly 10 percent annually through 2026. And this growth rate isn't surprising. DSPs can offer marketers greater transparency and more options than working exclusively with "blue chip" platforms. Partnering with DSPs expands the available inventory, and thereby, reach, for ROAS-oriented campaigns.

From launch and through the learning phase and into the performance and scaling phases, we're transitioning through the optimization funnel, and finally delivering conversions at the target effective cost per action (eCPA). From the penultimate target of eCPA optimization, we can start scaling a ROAS optimized campaign. Building campaigns around the desired KPI provides greater campaign control and transparency while keeping the essential focus on performance.

With more and more marketers now working with DSPs, it's possible to achieve greater scale than what was possible even a few years ago. Thanks to the increased scale, we have many examples in our portfolio where we were able to launch client campaigns and reach 1,000 monthly new paying users, within the first month, while delivering competitive customer acquisition costs (CAC's) as compared to the blue-chip channels of Meta, Google, Apple Search Ads, TikTok, and more.

One marketing tactic for which marketers are increasingly relying on DSPs is user acquisition (UA). The user acquisition (prospecting) campaigns are the lifeblood of digital marketing that deliver new users into the app or game for the very first time. Unfortunately, many users will churn within days, sometimes even hours. Those same tools that make a DSP such a potent platform for UA, make it even more lethal for activation, engagement, and retention, but that is a subject for another day. Today, DPSs enable marketing to measure performance through the full user journey, from install to uninstall. When a marketer has all those metrics and optimization levers at their disposal, performance metrics and ROAS are optimized.

In another UA campaign, we scaled monthly installs from 2,000 to 10,000 while reducing cost metrics by 70 percent and more than doubling ROAS from 78 percent to 160 percent. Economies of scale can be found in DSPs like in other platforms.

Despite the fall of giants like MediaMath, DSPs are increasingly being used by global marketers looking to optimize their game and app marketing performance. Modern DSP technologies are closing the gap with blue chip platforms and enabling performance marketers to deliver performance outside of the fortresses. The DSP has earned its place in the marketers' marketing plan and will only continue to improve its competitive edge.

The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

David Itzkowitz is director of performance at mobile marketing platform Zoomd.