History Of Demand Side Platform Companies

Video Transcript: History Of Demand Side Platform Companies

Welcome to episode number 56 of The Great Reset. My name is Robert Brill and I'm the CEO of BrillMedia.co. We're an advertising firm that helps companies achieve business results with the best paid media data targeting available in the marketplace.

Welcome to another episode of The Great Reset. In the next few episodes, we're going to be talking about advertising technology. And let's get right into it with the centerpiece of ad tech for companies that want to reach consumers, the Demand Site Platform or DSP.

That's right. Off the bat, we're starting off with another acronym and get used to it because there are a lot more coming your way in this series about advertising technology. The Demand Site Platform is a tool that was designed for ad buyers to make decisions about whom to reach with combinations of targeting filters.

I'll give you a brief history of the DSP so you can have a little bit of context about some of the business's implications for 2020. And we'll start in 2008. In 2008, there was a variety of companies that made massive ad inventories available to the marketplace and they couldn't sell them.

These companies were primarily the largest portals, including Google and Yahoo. And at the time, advertising was being sold human to human. It was very, very inefficient.

That is, salespeople reached out to media buyers at ad agencies and the whole process was really just slow. It was a slow sales cycle for the sellers as well. Basically, the salesperson would reach out, the buyer may not be available, the salesperson would spend a lot of time on phone calls and then emails, and then finally there'd be a sales meeting.

The buyer would tell the seller the campaigns and advertisers they were working on and then there would be ideally an RFP, a request for a proposal. Then the seller would reach out a few more times. And I feel for these people because they ate what they caught.

And selling is a really, really tough job. And when the salesperson who is the access to your inventory doesn't have access to the buyer and the seller can't reach the buyer to meet their sales quota and the buyer isn't getting back to you, that can be very challenging and frustrating. And as a buyer, so this is 2008.

I was a buyer starting in 2004. We went on a number of really fun events powered by this dynamic during the sales process. And considering the volume of campaigns we had going on, salespeople filled out our social calendars.

In fact, I remember the first two months of working at Universal McCann on the Sony Pictures business because I was on the buying team and we were planning out motion picture campaigns for Sony. We were taken all over Los Angeles. In the first two months, I remember talking to my mom and bragging, being so excited about how we went to Wolfgang Puck's restaurant Spago twice in two months.

I was 24 years old at the time and there's no way I could have afforded all of that on my own. It took me many years to be able to afford a dinner at Spago. So as a buyer, it was a fantastic experience.

But as a business process, it was really slow and inefficient and really oddly incentivized. The seller would put together a campaign based on the existing available inventory in the marketplace. So the ad impressions that they had to sell and you'd get a proposal back from the seller.

And at this time, you know, I was still working as a media buyer. By 2008, I was a supervisor. Now you jump to 2011.

And when I started buying advertising through the tools, the demand side platform tools, including MediaMath and TubeMogul, which is now called Adobe, this process was much more simplified. There are a lot of core benefits to buyers. But one in particular that endures to this day is that buyers don't have to talk to a lot of people to make an ad buy turn on.

It's really efficient. And it's not that talking to people is bad. But considering the amount of workload, a few extra calls a day could end up taking a lot of time away from what buyers had to do, which was should be primarily analyzing campaign performance and optimizing campaigns.

Buying on a demand side platform had other benefits as well that we'll go into in another video. But for example, the buying process when I got into advertising was that we'd put together a media plan. And the media plan was a full view of the places and channels that advertising was to run on a particular campaign.

And even in 2020, there are media plans that still get done. But what was happening is you'd have an increasingly diversification of advertising spaces digitally, like individual websites. You'd have rates, targets, timelines, and any other campaign specific details that were important for the campaign if needed.

If I wanted to run on 20 different sites, I had to go through that buying process that I mentioned earlier 20 different times. So that's a lot of phone calls, emails, and notably haggling over rates. And certainly there were a lot of conversations about salespeople reaching out.

And depending on how important your individual property was, I may or may not actually answer the call. And the challenge was like there'd be so many salespeople reaching out. It was like it was difficult to keep track of all the individuals and to be respectful of their time.

And that was a burden. You know, when I think back about how much time was used to haggle over a cost per thousand impressions of 25 cents, it's scary how much better my time could have been spent if we could have skipped all of that work and gotten right into the ad buying and optimization. So if you think about it, you know, when we haggle over rates, 50 cents, a dollar, 25 cents, that's a lot of time.

And that was our job. A lot of our job was to get the best ad rate for our clients, which was good. We can go back to clients and say, look, we negotiated the rate down from a $5 CPM to a $4.50 CPM.

I mean, that's a 10% discount. You're getting 10% more ad inventory and your investment is going 10% farther, which is good, I guess. And it's especially worthwhile when you consider, you know, when advertisers are spending tens of thousands or hundreds of thousands or millions of dollars on these buys, a 10% buy could add up to lots of money, much more than I was getting paid at the time.

So just in that one negotiation alone, my rates could be justified. My existence in the organization could be justified. But the reality is my existence and the justification for my work moving forward gets amplified by an order of magnitude when you consider how easy it is to buy advertising on a demand site platform.

At some point between 2004 and 2008, ad networks were introduced, which gave us the ability to buy advertising on a number of sites. So if I wanted to buy second or third tier websites, for example, that reached women, I could do that without having individual sales conversations with 20 different publishers. But the DSPs gave us a way to buy advertising space from a vast array of publishers that simply didn't exist before.

When we started using them, the DSP was revolutionary to the advertising business. The use of the platform also came with adversaries and detractors. And in the next few episodes, we're going to talk about the data, the targeting, and more of the history and use cases behind demand side platforms.

Until then, we'll see you tomorrow on The Great Reset. We'll see you tomorrow on The Great Reset.