Demand Side Platforms—Identifying the Growth Opportunities in Digital Advertising

A majority of marketers use a demand side platform, or DSP, for digital advertising in the United States. This Frost & Sullivan market insight highlights the key trends in the US DSP market and presents insights into the competitive strategies of leading DSP industry participants. It presents an overview of the key industry challenges and includes a discussion of the business model for the key value chain participants, including DSPs, supply side platforms, and ad cloud providers. This insight also provides revenue forecasts for the DSP market.

With programmatic advertising becoming the norm across digital and mobile environments, the share of media spend channeled through DSPs is increasing at a rapid pace. The ability to execute cross-channel campaigns, offer advanced data mashup and analytics capabilities, participate in header bidding opportunities, leverage machine learning advertising models, use cloud-based operational models, and deliver ease of use and transparency have emerged as the key success factors for leading DSPs. Details of these trends are presented in this insight. The impact of the emerging customer requirements and the growth of video advertising in the DSP market is also discussed.

Frost & Sullivan has used a proprietary model to estimate the market size for the DSP industry. Estimating the percentage fee for DSP intermediaries and applying that to the programmatic spending leads to an estimation of DSP revenues. Using primary and secondary research methodologies and market surveys, the percentage of programmatic revenue channeled through DSPs is estimated. Variation in operating models, such as managed services and partial or full implementations for DSP technology stacks, have been considered when estimating the share of US programmatic media spend for DSPs. A brief overview of the emerging revenue opportunities for DSPs is also included in this insight.