Meet the Top DSPs

Listen to a demand-side platform pitch its wares, and you can be forgiven for rubbing your eyes and wondering why it sounds pretty much the same as the many others.

That’s a problem, according to Forrester analyst Joanna O’Connell, because DSPs are still viewed as something of a mystery to many marketers. O’Connell, whose “The Forrester Wave, Demand-Side Platforms Q-4 2011” was released today, believes that many DSP clients just don’t know what questions to ask as it is relatively difficult to plow through the pile of publicist-spawned hype to find out if DSPs claims of algorithmic superiority and user-friendliness are more than ad copy. Many DSPs, according to O’Connell, fall into the also-ran category without much differentiation. Some have more services but not much tech to back up their hype.

The study, which used feedback from clients as well as independent algorithmic analysis and data from the companies themselves, named MediaMath, Turn, DataXu as leading DSPs in terms of media access, the depth and intelligence of their audience-management capabilities, and their relative expertise in algorithmic optimization. Forrester evaluated 36 DSPs on 48 criteria; only seven made its evaluation requirements, which include using real-time bidding on 50 percent of inventory and display media accounting for half of ad volume.

Some well-known ones, such as Google’s Invite Media, didn’t score in Forrester’s top tier. Forrester concluded that Invite, despite an easy user interface, lacked the features of the top three. Appnexus, another hot ad tech player tied up with Microsoft, was dinged as trailing on the buy side its strong position as a seller platform.

“Some DSPs are incredibly powerful in what they have to offer. But we test a lot of DSPs for our clients before we use them,” said Marita Scarfi, CEO of digital agency Organic. “Many of them make a lot of claims that, when you test them, it’s readily obvious that they can’t deliver on what they say.”

“Of course, the industry is awash in a lot of hype,” said Ian Schafer, CEO of DeepFocus, a media agency. “If you have a company that has some secret sauce that moves CTR from .0002 to .002, of course, you are going to guard it. But there are also a lot of companies out there offering products that are creating the same results. I don’t know if the landscape can necessarily sustain the 40-plus DSPs out there.”

According to O’Connell, DSP clients need to first look at a hierarchy of needs before committing to a platform. At the top of the list is providing good access to inventory. Managing, simply multiple channels is high on the list as well. Another critical and often overlooked element is the quality of the algorithm, a field of inquiry that is notoriously closely guarded by some DSPs but is at the core of their efficiency.

“I looked into the relative sophistication of the DSPs algorithmic optimization,” said O’Connell. “For instance, some algorithms look really exciting on paper. However, when we ran a head-to-head test, some algorithms continued to learn and improve, and some didn’t.” That means that some DSPs had a cutoff point for how well their algorithms adapted over time.

“We don’t need the black box,” she added. “DSP clients need to ask the right questions.”

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