There are very few industries that create as many acronyms as the advertising industry. We rapidly produce new ones and knowing what they all mean is the mark of an insider. Over my nearly 20 years in advertising I've seen them all. One that has been very durable over much of that time is the SSP.
What Is an SSP for Mobile Apps?
SSP is an acronym for Supply Side Platform. It is a technology platform that enables app developers to sell their advertising inventory at the highest possible rates by optimizing across different demand sources (advertisers).
Now, let's dive a little deeper and see how SSPs fit into the advertising ecosystem.
Understanding the Marketplace
The advertising ecosystem is typically described in the most basic terms of a marketplace: demand and supply.
Advertisers and their entourage of assistants (trade desks, agencies, DSPs and other middle men) are the demand side. They want to buy advertising space.
Publishers of apps or websites and their (much smaller) entourage are the supply side. They have advertising space to sell.
The SSP is in between the two and usually pitched as an aid to publishers; they intend to help publishers get the most money for their ad inventory. In practice, it's often more complicated than that because the largest SSPs usually operate exchanges as well, so they are operating the marketplace and helping publishers monetize their ad inventory.
There Are Many DSPs and Very Few SSPs
You may have heard of DSPs, or Demand Side Platforms, because there are a lot of them. DSPs are the technology platform that allows advertisers to more efficiently buy ads.
In the middle is an exchange where the ads are actually traded. So in the simplest terms, SSPs allow app owners to sell ads programmatically and DSPs allow advertisers to buy ads programmatically.
There are hundreds of DSPs in existence and only a relative handful of SSPs. There are a couple reasons for that.
One reason is that the barrier to entry to become a DSP is pretty low. You can use off-the-shelf technology, get a seat on an exchange and you’re ready to start buying ads. Actually making money at it will be another matter, but getting in the game isn’t that hard compared to creating an SSP.
An SSP needs to build a base of app developers that use their technology. But to compete, an SSP needs a lot of functionality that actually works well if they want to retain that base of developers. Also, with very few exceptions I can think of, SSPs also operate the exchange. So there is a lot of technology that must be built to become a competitive SSP.
The second reason is that having a lot of marketplaces is inefficient. Each DSP is a bidder on the exchange. You need a lot of bidders (DSPs) to run an efficient marketplace, but you don't need a lot of marketplaces (SSPs).
How Does an SSP Sell Ad Inventory?
At a high level, there is a three-step process for clearing (selling) an ad impression in an SSP.
The first step is to check whether it can be sold directly. SSPs usually allow you to insert direct deals and flight them with a higher priority level than other inventory. That ad serving functionality is typically not as robust as a traditional ad server. The targeting options might be more limited and there’s usually no ability to forecast the future availability of inventory.
However, unless you have several direct ad salespeople on staff, those limitations shouldn’t come into play very often. The SSP checks an impression against any direct campaigns in the system and if it matches it will be cleared there, if not, it goes to step two.
Step two is where the inventory is cleared in the SSP's auction. The SSP auction is too complicated to cover here, but it often includes one or more exchanges and one or more ad networks that compete with one another for the impression. The SSP determines the winner of the auction and sends the impression to the winning partner for final display.
Step three is dealing with remnant inventory, which means no one in the auction wanted the impression. In that case it comes back to the publisher, where they can clear it using house ads, cost-per-action offers or remnant deals struck with ad networks.
The execution of this process is much more complicated and not as linear as I’ve described it here. But any given impression is usually offered to direct buyers and to one or more exchanges and ad networks at various price points until it is sold (or not).
Other SSP Responsibilities
That’s only one facet of what an SSP does. Another important aspect is allowing the app developer to control the quality of the ads users see on their apps. This is an area where the capabilities of SSPs vary more widely.
It is possible to block ad campaigns or advertisers on any exchange. It’s also possible to block whole categories of advertisers, like those running ads for gambling. There are relatively few situations in which you can’t block the ads you want to remove in an exchange environment.
The issue is that you still have to monitor ad quality because bad ads will always get in one way or the other. If the impression gets to the ad network mediation level, then the problem gets harder. The SSP isn’t responsible for ads that come from the mediated networks, so if the bad ads originate there you have to track down the responsible network and block the ads within their system.
Another facet of what an SSP does is to provide reporting so that you can analyze and improve the performance of your ad monetization. The features will vary but the SSPs reporting on direct campaigns and anything that happens on the exchange should be quite good.
Reporting on mediated ad networks is usually fraught with errors and discrepancies that have to be sorted out because different systems will always count things a little differently. I’ve worked with most SSPs in existence and have never seen any with rock solid network mediation reporting.
Above are the main characteristics of an SSP, though if you dig deeper there are many more complexities to uncover. If you want to dig a little deeper, this article shows you how to choose an SSP that suits your product.