Understanding programmatic ads, DSPs and SSPs

Business Modelling of existing assets

Understanding programmatic ads, DSPs and SSPs

As Chinese are spending more and more time on digital platforms, especially on mobile, having a digital innovation management strategy in China may lead to increased revenues. For instance, as a digital marketer it is essential to understand programmatic ads, DSPs and SSPs. In China, Baidu, Alibaba, and Tencent (known as BAT) are dominating the market. Matthieu David-Experton, CEO and founder of Daxue Consulting, explains: “Traditional businesses need to rethink where they stand in terms of capturing value and how they could value the new revenue drivers that are data, access to connectivity, serendipity, services, human contact. We are reaching a point where offline becomes cheaper than online and opportunities are re-balancing.”

The client’s aim: monetize its new service

Daxue Consulting’s client, a well-recognized advertising and communication agency, sought to diversify its revenues by increasing customer engagement by implementing a new digital service. Therefore, the organization contacted Daxue’s research team to conduct innovative research which helps them to evaluate potential technological frameworks and develop a new business model with the existing assets.

An extensive research project towards the most suitable business model

As a first step, Daxue Consulting executed comprehensive desk research to get an understanding of the market, the client’s targeted environment, its current infrastructure, as well as the identification of the client’s key stakeholders who will be impacted by the future digital offer. The consultants additionally performed a market watch, i.e. research on specialized media, which enabled them analyzing the existing digital architecture, including for instance

• Data Management and Data Collection
• Connectivity frameworks
• App services and their attractiveness

Daxue Consulting proceeded with arranging focus groups with the targeted customer group to evaluate the visitor path as well as their needs and pain points with regards to the digital environment. The consultants also conducted in-depth interviews with project-relevant business players, such as advertising agencies, telecom services, or retailers, to evaluate:

• Potential tech-solutions, such as the Beacon technology, which enables geo-localization and pushes timely messages to customers to capture their attention
• Advertisement, considering main formats and latest norms, such as programmatic ads, and to understand DSPs and SSPs (Demand Side Platforms and Supply Side Platforms)

A programmatic ad is the technology-driven digital advertising. Instead of traditional human input, a specialized software optimizes the time and place of an ad, by using pre-set parameters and goals utilizing the connection of DSPs and SSPs. It makes it possible to target specific audiences according to certain attributes, such as demographics, for instance. DSPs allow agencies to purchase online advertising space, while SSPs enable the publishers to sell digital ads.

These steps not only helped the consultants to identify new digital touch points and opportunities for advertising, but also led to in-depth insights in how to improve the digital architecture, and how to manage the connectivity framework, as well as which constraints needed to be considered.

Daxue’s experts then organized workshops with a primary focus on the identification of monetization opportunities by managing the digital technologies accordingly. By analyzing all aspects of mobile marketing strategies, their attractiveness, feasibility, and ease of implementation, we were able to derive the best practices and communicate them to the stakeholders accordingly.

The last step encompassed the preparation of suitable business models including a profit sharing model and an operational roadmap. Based on the findings from the previous research steps, Daxue Consulting designed different scenarios of business models and compared the potential revenue streams as well as associated investments and risks for each model. By utilizing the funnel approach, the consultants could narrow down the models to the most profitable one.

Enabling the client’s establishment in the programmatic advertisement landscape

Finally, Daxue Consulting provided the client with a comprehensive report. It presented a detailed overview of the findings including the market’s trends, the current digital infrastructure and its restraints, potential touch points with visitors, and major players and stakeholders to consider. The consultants included strategic recommendations on the framing of the digital architecture and provided:

• the most suitable design of the technical ecosystem (ranging from the hardware to security and data-processing)
• the most profitable business model encompassing a multi-scenario future outlook
• and a detailed operational roadmap for the coming years, comprising the needed investment and potential revenue

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