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Difference Between Independent Trading Desks and DSPs

December 1, 2020 | by Jinisha Arora
What Is Programmatic Advertising?

Programmatic advertising refers to the manner in which Trading Desks, Demand Side Platforms, and Supply Side Platforms use automated processes for the buying and selling of digital advertising space. Simply put, it is the practice of using software to buy digital advertisements. Here, machines and artificial intelligence replace human negotiations and human errors.

A considerable number of marketers opt for programmatic advertising for a variety of reasons. It allows marketers to spend their time on making strategic marketing decisions than doing base paperwork. That makes marketing and advertising campaigns more effective and efficient and helps you track insights and pricing at the tap of your finger. It also provides for transparency between advertisers and publishers, thereby bringing you the results you need without having to forage for it.

Given the rate with which technology is evolving, it is not surprising to note that by 2021, digital ad spend will likely represent a majority of all U.S. ad spends. That has further helped programmatic advertising grow from 65% in 2015 to 83.60% in 2019 in total U.S. digital ad spend. As digital advertising grew, so did the need for an automated marketplace. Now, advertisers and publishers needed automated processes and methods to manage transactions and execute performance at scale. That opened the doorways for new technology and agencies to come in. It led to the creation of Demand Side Platforms, Supply Side Platforms, and Trading Desks.

What Are the Interfaces Used for Programmatic Advertising?

As the name suggests, a Demand Side Platform provides a space for advertisers to fulfill their demands. It allows advertisers to source through advertisements, manage and purchase inventory, and optimize their campaigns to the best of their needs. Generally, Demand Side Platforms provide access to multiple ad spaces. By using Demand Side Platforms, advertisers can purchase impressions from Supply Side Platforms and relate it to the needs of their audience. Similarly, Supply Side Platforms provide a platform for ad networks and direct publishers to manage, sell, and optimize inventory in an automated fashion. Supply Side Platforms allow ad networks and direct publishers to list their space for sale on multiple ad networks and Demand Side Platforms.

Trading Desks drive connections between Demand Side Platforms and Supply Side Platforms. They work independently to optimize programmatic bid-based media and audience buying. Using several technologies, they help clients improve advertising performance, increase audience retention rates, and gather significant engagements from media spends. The objective of Trading Desks is to maximize returns for advertisers, but they differ in terms of structure. There are two segregations - Agency Trading Desks and Independent Trading Desks. The difference is simple - Agency Trading Desks come under large agencies with different departments. Whereas, on the other hand, Independent Trading Desks are run independently and often specialize in their field.

Each type of Trading Desk comes with its unique pros and cons. However, clients tend to prefer Independent Trading Desks for their ease of convenience, transparency, and control. And it is not hard to see why.

What Are Independent Trading Desks?

Independent Trading Desks, as the name suggests, are independently owned and operated. They generally consist of a smaller team as compared to Agency Trading Desks. But each member specializes in programmatic advertising - they understand the field to its core. That allows them to analyze data more efficiently and make smarter decisions. While they do perform similar services to Agency Trading Desks, their expertise and specialization enable them to get to the depth of each service. They often tailor these services to fit the advertisers' specific needs. Depending on their budgets and requirements, they can mix and match a variety of services such as campaign execution and management, data analysis, and even content creation. Further, their independent nature allows them to offer niche benefits that Agency Trading Desks often do not provide. These include, but are not limited to, control, transparency, efficiency, and personal attention.

What Is the Difference Between Independent Trading Desks and Demand Side Platforms?

Looking at the services provided by Independent Trading Desks and Demand Side Platforms, you may wonder why there is a difference and what the difference is. And that is fair. On the surface, Trading Desks and Demand Side Platforms do seem to perform similar functions. However, there is a primary distinction that differentiates the two. Trading Desks provide a blend of machine functions and human labor, whereas Demand Side Platforms are fully automated platforms. Let us elaborate on this.

To provide end-to-end services, Trading Desks hire professionals, such as data analysts, software developers, designers, and managers. They ensure that advertising clients have their needs and requirements met and that there is optimization in all campaigns. They also provide a buffer between advertising clients and the available media inventory.

Trading Desks often use multiple Demand Side Platforms to ensure advertising clients get access to a variety of inventory units and advertising space. By using several Demand Side Platforms, they allow their clients to connect with their audience across several channels through different media. That allows Trading Desks to scale reach and perform optimized campaigns. They further use Demand Side Platforms to centralize the buying and selling of digital display advertisements and provide ease of convenience to their advertising clients.

Another great point of distinction is the pricing model. When you use Demand Side Platforms on your own, you have to pay a higher price for a seat on the platform. However, with Trading Desks, this fee gets reduced considerably.

That is because it gets shared between several marketers who are clients with the Trading Desk. That lowers your overall cost and gives you the chance to spend that money on efficient and effective ad spend.

On the other hand, Demand Side Platforms are an interface that advertisers use to purchase media from Supply Side Platforms. Demand Side Platforms buy ad space on their behalf from Supply Side Platforms either in the open market or through private market deals. Simply put, a Demand Side Platform is just a piece of technology that purchases digital advertisements in an automated manner.

Will You Benefit from Using an Independent Trading Desk?

Advertisers often seek Independent Trading Desks for their ease of convenience, transparency, and effectiveness. They work with multiple Demand Side Platforms and have an experienced team to assist you through your campaigns. That gives you the chance to access several sources of inventory and optimize campaigns to fit your exact needs. Other than that, they come with the following benefits

Domain Expertise

Independent Trading Desks specialise in their field. That means that every member on their team inherently understands programmatic advertising and can contribute effectively to your desired reach and engagement.

Campaign Management

Because they have field training, they know how to tailor each campaign to fit your needs. There is no guesswork here. Instead, these professionals use analytics to curate each campaign to fit their desired results.

Reduced Costs

Because they have field training, they know how to tailor each campaign to fit your needs. There is no guesswork here. Instead, these professionals use analytics to curate each campaign to fit their desired results.

Hence, while Independent Trading Desks and Demand Side Platforms may seem to share similar features and factors, the main differentiation is what marks the two as class apart. That is the personal touch that comes with using Independent Trading Desks. Here, they run customized campaigns using quality automated processes while providing competitive rates.