What is ad tech? It is the software that lets advertisers buy, publishers sell and ad servers deliver digital ads automatically. The first decision is which side of the market you work on: buying, known as demand, or selling, known as supply.
This guide maps each platform type to its job in delivering a targeted ad, using IAB Tech Lab specifications as the reference point. For the end-to-end sequence, read how does programmatic advertising work.
Decide first: are you buying, selling, delivering or collecting data?
The ad tech ecosystem is usually described as two sides. Mandel Marketing places advertisers, agencies, brands and other companies on the demand side, and publishers and ad networks on the supply side. Your side of that split decides which platform to learn first, because each platform type exists to serve one job within the chain.
Use the following choices as a starting filter. Each one points to the platform type that matches the problem.
- You are an advertiser or agency that wants to purchase impressions. Start with demand-side platforms. The IAB Tech Lab glossary describes a DSP as programmatic software for advertisers to purchase advertising impressions.
- You own a site or app with ad space to sell. Start with supply-side platforms. The same glossary describes an SSP as programmatic software for publishers to facilitate sales of their advertising impressions.
- You need ads to actually appear on pages and be counted. Start with the ad server, which selects the most relevant ads and records performance data.
- You hold audience data and want it to drive targeting. Start with a data management platform, which collects, stores and analyzes user data.
- You want a ready-made intermediary rather than separate tools. Look at ad networks, which supply the technology for buying and selling ad space.
- You want to understand how the systems talk to each other. Start with real-time bidding and the OpenRTB specification.
Three criteria help when more than one choice seems to fit. The first is what you control: budget points toward the buy side, inventory toward the sell side. The second is what you must prove afterwards, since reporting on impressions and clicks comes from the delivery layer. The third is how much of the process must run without manual steps. Automation is the defining feature of programmatic buying, so teams that need per-impression decisions at scale need the bidding systems described below.
The sections that follow take the ecosystem as a whole first, then each platform type in the order a bid request travels.
How the ad tech ecosystem works
Ad tech is the set of platforms that automate the buying, selling, delivery and measurement of digital advertising. Mandel Marketing defines the automated buying and selling of ad space as programmatic advertising, and ad tech platforms are the machinery that performs it.
The flow runs from advertiser to publisher and back. An advertiser or agency sets a budget and audience through a DSP. A publisher offers its ad space through an SSP. The two meet in a marketplace, which RichAds describes as the place where buying (DSP) and selling (SSP) of ad space takes place. An ad server then delivers the chosen ad and logs what happened. A data management platform sits alongside, supplying audience information to improve targeting.
It helps to treat these as layers rather than competing products:
- Decision layer. DSPs and SSPs hold the rules about what to buy and what to sell.
- Trading layer. Exchanges and ad networks connect buyers and sellers, and the OpenRTB protocol is the shared language for real-time trades.
- Delivery layer. Ad servers select and show the ad and collect performance data.
- Data layer. DMPs, cookies and fingerprinting-based signals describe the audience.
A single ad view can touch every layer, which is why a problem in one area, such as bad data or fraudulent traffic, can affect results everywhere else.
Platform types and the job each one does
Demand-side platforms
A demand-side platform is the advertiser’s buying tool. It receives bid requests from the sell side and returns bids. In real-time bidding, RichAds explains, DSPs bid on each impression in milliseconds, based on audience relevance and budget. That sentence contains the whole role: budget and audience rules go in, a purchasing decision comes out.
RichAds also notes that some DSPs are used by large brands and agencies to run omnichannel campaigns. A DSP therefore suits teams that manage several channels from one buying interface and want audience criteria applied automatically. A small advertiser with a single simple campaign may find an ad network a more compact starting point. The full buyer’s view is in what is a demand side platform.
Supply-side platforms
A supply-side platform is the publisher’s selling tool. Its distinctive action in the bidding process is sending bid requests, which the glossary entry for the sending side describes as used interchangeably with SSP. When a page has ad space available, the SSP is the system that announces it to potential buyers. Publishers that want to offer their impressions to many buyers at once use this layer. The seller’s view is covered in what is a supply side platform.
The difference between a DSP and an SSP
A DSP and an SSP are mirror images, and they communicate through bid requests and bids.
- Who uses it. Advertisers use DSPs; publishers use SSPs, according to the IAB Tech Lab glossary definitions.
- What it does with an impression. A DSP purchases advertising impressions; an SSP facilitates the sale of them.
- Which way the message travels. The SSP sends the bid request; the DSP receives it and responds with a bid.
If you are unsure which you need, ask whether you are paying for impressions or offering them. Paying means a DSP, offering means an SSP.
Ad exchanges and ad networks
An ad exchange is a marketplace where the DSP side and the SSP side meet. The Fresh adds that exchanges may connect DSPs and SSPs and usually take a share of the revenue generated for doing so. The mechanics are explained in what is an ad exchange.
An ad network is a middleman that, in RichAds’ wording, provides the technology to enable the buying and selling of ad space. The practical contrast is this. An exchange is a place where separate buyer and seller systems trade. A network is an intermediary that packages the connection between advertisers and publishers. Teams that want fewer moving parts may lean toward a network, while teams that want direct control over bidding rules lean toward their own DSP or SSP. Details are in what is an ad network.
Ad servers
An ad server chooses which ad appears and records what happens next. The Fresh states that ad servers show the most relevant ads from the content delivery network based on user data. They also collect data such as impressions and click-thru rates to help advertisers monitor performance.
That gives the ad server two jobs: delivery and reporting. Delivery is the visible job, because the ad appears in the slot. Reporting is what makes a campaign measurable, since logged impressions and clicks are the raw material for judging whether spend worked. When two reports disagree, the first step is to confirm which system counted each figure. The role is covered in more depth in what is an ad server.
Data management platforms
A data management platform is used to hold and interpret audience information. RichAds says a DMP collects, stores and analyzes user data, and that DMPs work alongside DSPs and SSPs to improve targeting accuracy. The DMP does not buy or sell impressions itself. It supplies the audience understanding that buying and selling decisions rely on. A DMP makes most sense for organizations that already have meaningful first-party audience information to organize. The detail is in what is a data management platform.
Real-time bidding: how a bid request becomes a decision
Real-time bidding is the process in which advertisers bid for ad space as it becomes available. The Fresh describes it as much more common these days than older fixed arrangements, with advertisers bidding on space, usually through an exchange. The sequence below follows the roles already described.
- Space becomes available. A publisher’s SSP sends a bid request describing the impression.
- The buyer’s platform evaluates it. The DSP receives the request and weighs audience relevance against budget.
- A bid is returned. RichAds says DSPs bid on the impression in milliseconds, so the whole exchange happens as the page loads.
- The ad is delivered. The ad server shows the most relevant ad and logs the impression.
The practical lesson is that targeting is applied per impression, at the moment of bidding, rather than per campaign in advance. This is why audience data quality matters so much: the bid depends on what the buyer knows about the viewer at that instant. A fuller walk-through is in what is real time bidding.
IAB Tech Lab standards that tie the platforms together
Standards are what let a DSP from one company talk to an SSP from another. The IAB Technology Laboratory publishes the main ones. In its OpenRTB 2.6 announcement, the organization describes itself as a non-profit consortium and lists its work as including the OpenRTB real-time bidding protocol, the ads.txt anti-fraud specification, the Open Measurement SDK and VAST.
OpenRTB
OpenRTB is the communication protocol that enables real-time buying and selling of digital ad inventory. In platform terms, it is the agreed format for the bid requests that SSPs send and the bids that DSPs return. Without a shared protocol, each buyer and seller pair would need a custom connection.
Version 2.6 was released for public comment on December 9, 2021, with a 60-day period running until February 7, 2022. Its flagship feature is seamless buying of Connected TV inventory, using structured, dynamic and hybrid ad pods. The release also notes that the use of AdCOM means lists can be updated and implemented independently, so those lists do not have to wait for a new protocol version. For anyone working with video-on-TV inventory, version 2.6 is the relevant reference.
Mapping specifications to roles
- Trading between DSPs, SSPs and exchanges. OpenRTB is the reference.
- Fraud prevention. The ads.txt specification is the IAB Tech Lab’s anti-fraud tool.
- Measurement. The Open Measurement SDK appears among its work, and it is the place to look when comparing how impressions are counted across systems.
- Video ad delivery. VAST is listed in the same body of work.
When evaluating a vendor, asking which of these specifications it implements is a more reliable test of compatibility than a feature list.
Tags, pixels and audience signals
The ad server and the data layer both depend on small pieces of code on pages. An ad tag is the snippet that requests an ad for a slot, and a tracking pixel records that something happened. They are explained in what is an ad tag and what is a tracking pixel.
Audience information reaches the system through browser identifiers. The Fresh notes that browser cookies and digital fingerprinting technologies allow advertisers to gather audience data. That data feeds the targeting decisions made by DSPs and DMPs. Because the quality of targeting rests on these signals, a change in how a browser or regulator treats them changes what the rest of the chain can do.
Measurement then closes the loop. An ad impression is a logged delivery of an ad, and what is an ad impression explains how impressions are served and counted. The ad server’s logged impressions and click-thru rates are what an advertiser reviews to judge a campaign.
Where ad tech shows up: formats and tactics
Display advertising
Display advertising is the format most closely tied to ad tech’s origins. Mandel Marketing records that the first online display ad was a banner that appeared on the HotWired website in 1994. Today the banner and its successors are bought and sold through the programmatic chain described above. What is display advertising covers the format itself.
Retargeting
Retargeting is a tactic rather than a platform. The Fresh notes that an advertiser buying through a DSP can retarget previously engaged users. It depends on the data layer to recognize returning visitors and on the DSP to bid for them. It suits advertisers who already have an engaged audience to bring back. Those who are still building awareness will find it has little to work with. See what is retargeting.
Connected TV
Video on television screens has its own requirements. The IAB Tech Lab states that the flagship feature of OpenRTB 2.6 is seamless buying of Connected TV inventory through ad pods, which makes the protocol relevant beyond web pages and apps.
Ad fraud and quality risk
Automation brings a risk that someone will exploit it. Mandel Marketing lists ad fraud as including fake traffic, fake leads, fake clicks and ineffective ad placements. Each of these corrupts a figure that buyers rely on, whether impressions, clicks or leads. The IAB Tech Lab’s ads.txt specification is one of the industry’s countermeasures. For advertisers, the decision rule is simple: do not judge a campaign on delivery numbers alone, and check how a vendor handles verification before committing budget. The topic is developed in what is ad fraud.
Platform roles at a glance
The table collects the buy-side, sell-side and data roles so the starting choice can be compared at a glance.
| Platform | Role in delivering a targeted ad | Typical user | Planning use |
|---|---|---|---|
| Demand-side platform | Purchases advertising impressions and returns bids | Advertisers and agencies | Choose when you are paying for impressions against a budget and audience rules. |
| Supply-side platform | Facilitates sales of impressions and sends bid requests | Publishers | Choose when you own ad space to sell. |
| Ad exchange | Marketplace where DSP buying and SSP selling meet | Both sides, indirectly | Consider when you need a trading venue between separate systems. |
| Ad network | Middleman providing technology to buy and sell ad space | Advertisers and publishers wanting a packaged option | Consider when fewer separate tools are preferable. |
| Data management platform | Collects, stores and analyzes user data | Organizations with audience data | Add when targeting accuracy depends on better audience information. |
Definitions for the DSP and SSP rows follow the IAB Tech Lab glossary, and the remaining rows follow RichAds’ platform overview.
Frequently asked questions
Is an ad network the same as an ad exchange?
No. An exchange is a marketplace where DSP buying and SSP selling meet, while an ad network is an intermediary that supplies the technology for buying and selling ad space, according to RichAds.
Does a data management platform buy or sell ads?
No. A DMP collects, stores and analyzes user data, and it works alongside DSPs and SSPs to improve targeting accuracy.
What does CPM mean in ad tech?
CPM is cost-per-thousand, the price paid for every 1000 impressions, as Mandel Marketing explains.
Who maintains the OpenRTB specification?
The IAB Tech Lab, a non-profit consortium established in 2014, according to its OpenRTB 2.6 announcement.
