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DSP: a promising path through the mobile advertising jungle?

With a recent study by research com­pa­ny Berg sug­gest­ing that mobile adver­tis­ing accounts for a mere one per cent of the glob­al adver­tis­ing out­lay, it’s a fair bet that mobile adver­tis­ing agen­cies are all ask­ing “How can we expand this market?”

A mobile device farrago

Despite the mas­sive uptake of mobile devices, mobile phones adver­tis­ing is no stroll in the park. There’s a pro­lif­er­at­ing far­ra­go of dif­fer­ent hand­sets to con­tend with, sport­ing dif­fer­ent screen sizes, oper­at­ing sys­tems and capabilities.

To com­pli­cate mat­ters fur­ther, Apple has been set­ting its Safari brows­er to reject third-par­ty cook­ies (the sta­ple of online adver­tis­ing) from its iOS prod­ucts (iPhone and iPad). There’s a lit­tle more flex­i­bil­i­ty with Android devices, but there’s also a lot of frag­men­ta­tion: dif­fer­ent devices use dif­fer­ent ver­sions of the OS.

A new path through the mobile jungle

But some up-and-com­ing agen­cies are forg­ing a promis­ing path through this tech­no­log­i­cal jun­gle. It hinges on the use of a DSP – demand side plat­form. This allows busi­ness to pur­chase adver­tis­ing space in a tight­ly tar­get­ed way – and mea­sure the suc­cess of each cam­paign. In the online ad world, it con­nects adver­tis­ers with ad exchanges; the mobile ver­sion – like that deployed by the two-year-old start­up StrikeAd – lets adver­tis­ers pin­point their audi­ences accord­ing to sev­er­al key char­ac­ter­is­tics. These include the type of OS, the type of device, the user’s mobile car­ri­er, the time of day and, more and more, the user’s location.

As soon as the DSP receives an advertiser’s uploaded tar­get­ing cri­te­ria, it scours the ad exchanges which buy and sell mobile inven­to­ry and bids on a suit­able space as soon as it becomes avail­able – a process which takes milliseconds.

As StrikeAd’s CEO and founder Alex Rah­man puts it:

“The DSP learns to answer the impor­tant ques­tions for itself: Did the ad work? Did the audi­ence engage with it? Did they pur­chase a prod­uct, watch a video or down­load an app? Then we stop buy­ing space in all the places a cam­paign doesn’t work and hone in with laser-focus on the best places to buy ads for a par­tic­u­lar advertiser.”

And the plat­form appears to be catch­ing on: Adfon­ic launched its own DSP, Madi­son, in Octo­ber 2012 and already, its main­stream cus­tomers – includ­ing McDonalds’s, Peu­geot and Warn­er Broth­ers – are run­ning cam­paigns on it.

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