But despite some trends that were simply full of hype and no substance, like blockchain in AdTech, the enthusiasm surrounding retail media is backed by some very promising opportunities that are already being realized.

To sum up the various opportunities in retail media and the options retailers have when building a retail media network, our CEO, Piotr Banaszczyk, contributed to ExchangeWire’s Industry Review 2024.

Click here or on the image below to gain instant access to Piotr’s piece on retail media or visit ExchangeWire to download the full report.

AdTech

What Is Retail Media & Retail Media Networks (RMNs)?

Natalia Figas

Mar 23, 2023

AdTech

The Benefits of Retail Media for Retailers and Advertisers

Martyna Oświecimska, +1

Nov 06, 2023

Data & Privacy

Data Clean Rooms Explained: Q&A with Clearcode and Aqilliz [VIDEO]

Mike Sweeney

Feb 22, 2023

The post Should retailers rent, buy or build their retail media network (RMN)? appeared first on Clearcode.

In a recent video interview, Michael Sweeney, Head of Marketing at Clearcode, engaged in a conversation with Wiktoria Wójcik, the Co-Founder at inStreamly. This insightful dialogue delves into the intricacies of advertising within the game and live streaming realm, shedding light on the innovative strategies and opportunities that brands can leverage to enhance their outreach.

As brands navigate the dynamic landscape of game and live streaming platforms, Wiktoria Wójcik shares valuable insights into the evolving trends, challenges, and the unique potential that this advertising channel presents.

The Questions Covered In the Video

• What does inStreamly do?
• What’s the current state of game and live streaming?
• What are the main types of streamers?
• How difficult is it to be able to provide sponsorship on livestreams?
• Can it be considered as a form of advertising, or is it more similar to the types of sponsorship that you would generally see on a lot of YouTube creators?
• With the actual creative of the sponsorship, is that something that the brands generally come to you with already, or is that something that you work with them on to provide best practices? 
• What kind of ad targeting is available and what type of measurement data is also available to brands?
• What kind of information can brand see about how well their campaigns performed, etc.?
• What’s the general response from brands and do you work with brands that would be investing a lot in this, or are you starting to see some brands that are experimenting in this?
• The growth of game & live streaming and sponsorship within livestreaming over the next 5 or so years — what does that look like from your perspective, how do you see this channel growing and where will the growth come from?
• What are vstreamers and vtubers?

Below is the transcript from the video interview above.

Michael Sweeney: Hello everyone, my name is Michael Sweeney and I’m Head of Marketing here at Clearcode. 

In today’s video, I’m joined by Wiktoria Wójcik, who is the Co-Founder at inStreamly, and we’ll be talking about advertising inside game streaming platforms.

So Wiktoria, thank you so much for joining me today.

Wiktoria Wójcik: Yeah, thank you for inviting me and hello everyone.

Michael Sweeney: You’re very welcome. So before we jump to the questions, Wiktoria, just tell us a few words about yourself and what you guys do at inStreamly.

Wiktoria Wójcik: Sure. Hi, I’m Wiktoria, I’m a co-founder of inStreamly, one out of four co-founders. I had a background in, let’s say, gaming, live-streaming, esports. 

I was a streamer myself, then an esports host and interviewer, then worked in an esports organization and for a while I was also an expert in gaming marketing.

At inStreamly, what we do is, to put it simply, we help brands reach gamers in a way that those gamers appreciate and in the process we are helping gaming streamers earn on their passion. 

So we are making it easy for streamers that even have, like, 20 viewers to work with the top brands like Samsung, Netflix, or PlayStation.

Michael Sweeney: Excellent. So maybe just tell us a little bit more about the current state of game streaming, because you mentioned before yourself that you were involved in that, that’s your background. 

I personally don’t know a lot about game streaming, the only kind of association I have is with this Pewdiepie guy, I guess that’s, kind of, related. 

But just tell us a little bit about the actual game streaming landscape, what types of platforms are being used for streaming, and also what audiences are consuming the streams, etc., what does that look like?

Wiktoria Wójcik: Alright, so with game streaming and broadly, let’s say, start with livestreaming, so livestreaming is a huge market and basically at any platform, be it YouTube, or Instagram, or TikTok, you will see people streaming live. 

What we are focusing on is people who stream video games, or are streaming to the video games audience primarily. 

So in this case, we have, let’s say, in the Western world, because there’s also Asia, especially China that’s quite different, but the biggest player of course is Twitch and it has around 70% to 80% share of the market, depends on the year, depends on the month. 

Then we have YouTube, Youtube is, in my view, in the best position to win live streaming overall in the next few years.

Maybe not in gaming, maybe Twitch will stay and have their position in gaming, but in any other content category, the creators are already on YouTube, they do not need to move to Twitch or to anywhere else, but they can livestream. 

So I see a huge opportunity there.

And then we have a dark horse of this race, a new one, Kick platform that was created by…I don’t even know who created it, to be honest. 

It has some associations with a gambling platform, but is used as an alternative for Twitch with better split rates for subscriptions, so for fun support for the streamers, and a more loose approach to content moderation, which made it very interesting for streamers to go in and be more free with what they stream and how they stream. 

And it’s getting more and more traction. 

Then we have Trovo, Trovo is a platform that’s backed by Tencent and it has some popularity in, let’s say, Brazil, Latin America, and smaller countries around Europe. 

And we of course have Facebook, maybe it’s weird saving it for last, but Facebook had a very big push a couple of years ago. 

They were paying even streamers in Poland a lot of money to stream on the platform and basically everyone took the deal, got the payday, and once the contract finished they switched back to Twitch. 

So Facebook is revamping their livestreaming efforts, they are quite popular as livestreaming platform in Asia, especially Southeast Asia, their live streaming on Facebook is very strong, but in Europe, we’ll still be talking, in Europe, in the United States especially, it’s going to be Twitch, then nothing for a while, and then we can talk about YouTube, and maybe Kick as the rest of the platforms.

Michael Sweeney: Cool, very interesting. So you mentioned a moment ago about the streaming of live events, so I guess there’s, kind of, maybe, let’s say, two different categories.

You’ve got the game streamers, which as you said, kind of, use Twitch as the platform, and then you’ve got regular content creators that create lots of different content about different things, but incorporate livestreaming into that content production, right. 

Is that, kind of, how it looks?

Wiktoria Wójcik: Yeah, I would say the split is very, very concrete. And I say those normal content creators, for them livestreaming is more of a tool to connect with the audience. 

Like a lot of personalities, for example, BLACKPINK use livestreaming to just seem more human and to connect with the viewers. 

When we are talking about gaming livestreaming, I would lie if I said that all that gaming streamers do is stream games, because it’s not true. 

If you go on Twitch and see what’s the most popular, most watched category within the last three years, the last month, the last week, it’s always gonna be just chatting, so it’s nothing to do with games, but the audience is still the same. 

The streamer is the same streamer who will be on just chatting, just chatting with the chat for an hour, and then go stream a game, or two, or another game.

And it’s still gonna be a gaming audience, gaming livestreaming, even if the content is not gaming at the moment.

So for example, when I was a streamer I was streaming mainly League of Legends and let’s be honest, nobody watched me for League of Legends content because I was a very, very bad player. 

People watched me for my personality and this is what they do for all the streamers. They choose the game they prefer as a context, but watch a streamer for their personality, for how entertaining, fun, interesting they are.

I had, like, 25 viewers, concurrent viewers, when streaming League of Legends and one day I had to prepare dinner and I decided okay, I’m just gonna go on stream and peel potatoes and make cucumber salad, just on the stream, just to talk with people, and pass the time while I’m making the dinner. 

And I had 80 people watching me peel potatoes and talk about religion, philosophy, culture, etc., and most of those people were people who usually watch me play games. 

And it wasn’t gaming content, but still the audience, the platform, the context was much more gaming driven than if I were to stream the same thing, for example, on TikTok. 

So this is why I say that Twitch is right now a primarily gaming, or with a gaming audience in mind, platform, and YouTube is more positioned to take livestreaming as a medium more broadly.

Michael Sweeney: Yeah, that’s a super interesting insight because, yeah, I don’t have a lot of knowledge about the whole streaming thing, whether it’s game streaming or livestreaming, but, yeah, I always, kind of, thought that it was essentially people watch these streams because they want to see people play their games, right. 

But as you said, there’s different ways that people can be entertained through these, but as you said, the audience, generally, is still going to be people who watch game streams, but it’s more about the person’s personality rather than, I guess, the actual game because those people could go and play themselves.

Wiktoria Wójcik: Yeah, we even did a research on over a couple of thousand stream viewers and 85% of them said the reason they watch streams is because they simply like the streamer. 

And I like this comparison to going bowling with your friends. So you choose to go bowling because bowling is better than kayaking. 

You don’t like kayaking, you’ll go bowling with your friends, but it’s not like you are oh God, I need to go bowling, I will play bowling, this is so great. 

No, you’re, like, okay, let’s go bowling, let’s have fun together as a friend group in the context of bowling. So it’s the same with choosing a stream to watch, a streamer to watch.

Of course I’m gonna choose the League of Legends category, because I prefer League of Legends over CS:GO the same way I prefer bowling over kayaking, but then which streamer I chose, who I interact with, how much time I spend there, it’s more about the person and the game is just the context.

Of course, there will be people who are watched because they are the best at the game. 

There are a couple of streamers, there’s a couple of them in each category and they are so good and their content is about them being good and maybe showing some knowledge about the game. 

And of course it’s better to get and it’s easier to become a popular streamer if you are very good at games because, let’s be honest, it’s very frustrating to watch somebody lose all the time. 

Of course this can be fun sometimes, but usually the better you play, the more likely you will have people watch you.

Michael Sweeney: Yeah, that’s a super cool analogy, the way you explained it. 

I guess, I don’t know, when you were saying that, I thought maybe karaoke is also another example where a lot of people don’t say oh, I need to go and sing in a bar, but you do it because you’re with your friends as well, but yeah, the bowling analogy is super interesting, so it definitely makes a lot of sense. 

So let’s maybe talk a little bit about the advertising, or as you said it’s more about sponsorship and branded placements inside game streams, and livestreams, etc., so first of all, how does that, kind of, look?

Because we’ve got, you mentioned the major platforms like Twitch, YouTube, Facebook even, these are all walled gardens, right, closed off systems essentially. 

So let’s maybe, kind of, start with that, how does a company like inStreamly get into that, is that a fairly difficult thing, is it like you have to set up some kind of business relationship with these platforms, and then there’s some, sort of, API or something like that? 

How difficult is it, without going too much into sensitive, confidential information, but how difficult is it to be able to provide sponsorship on livestreams on these platforms?

Wiktoria Wójcik: So maybe I’ll explain briefly what we do and answer your questions. In a sense, we deal directly with the streamers and we may make dealing with the streamers directly just easier. 

So in the past, if you were to even place just a stupid logo on a stream, you had to contact the streamer, agree on the rate, sign an agreement, then negotiate how long it’s gonna be seen and if they could turn off the logo when they are playing a certain game, because the brand doesn’t want to be associated with the game, and then you have to get the reporting, and pay the money. 

There’s a lot of steps only with one streamer, so if you are thinking about working with 10 or 20 streamers, this becomes a full-time job for one person just to set it up. 

And it meant that most of the brand appearances within streams were only with the top biggest streamers and 99.9% of streamers on Twitch have less than 100 concurrent viewers so they have people who watch them for several hours a day and they are very engaged, they are in contact with them. 

But those streamers cannot even dream about working with those big brands. 

So in short, we make it very easy to have a brand appear within a stream, and then to measure how many people have seen it, to measure how many people clicked the link and the CTA in chat. 

And then we can go fancy, so have a different kind of messaging depending on what game is streamed, or even react to what happens in the streamed game and say when a streamer is winning, then the brand appears saying this one is for the winner and drink this drink if you are a winner. 

And because we are constantly in conversation with the data of what’s happening in the stream, but in the end, the content that we place within the stream, the brand placement, brand advertising is inside the streamer’s content before it even hits the platform. 

So it’s unblockable by Adblocks and it’s more similar to how streamers worked with brands before, or, for example, how Youtubers work with brands right now. 

So you have something directly in the content. 

So we are dealing, like we made something that was very manual, very hard to do with many streamers, very tedious, and in the end a lot of times boring, or just simple, into more interactive, more interesting way that also helps us and makes it possible to work with, let’s say, 2000 streamers in one campaign. 

Usually, within one day of a campaign, we will have around 500 streamers participating in it. 

When it comes to working with the platforms, of course we need some kind of automation and connection to the data. 

So of course, we gather from the Twitch API, we gather the data about people watching the stream and we gather the data about what’s happening in the chart etc., but the whole dealing is more on the relationship between streamer and the brand and us facilitating this relationship than dealing with the platform. 

In a way, when a streamer streams to YouTube and Twitch at the same time, we just gather data from those two platforms and the streamer gets paid for both of them. 

And we are looking to expand to other streaming platforms within this year, I hope so. We are not in a hurry because those two platforms cover the majority of the market, but we are in good talks to get more platforms on board.

Michael Sweeney: Perfect. So just touching on that advertising part again as well, because you mentioned that, I mean maybe this is gonna be another question. 

Do you consider this as a form of advertising, or is it more similar to, as you said, the types of sponsorship that you would generally see on a lot of YouTube creators? 

What does the kind of format look like, because I guess it’s not, like, a typical banner ad inside a game stream, right, it’s more of, as you said, a sponsorship type thing.

So what does the format, kind of, look like for the sponsorships and branded placements?

Wiktoria Wójcik: Okay, so the visual format is in a form of animation that can change depending on streamed game, or what’s written in the chat, etc., the format itself does not impact whether you perceive it as an advertising or a sponsorship. 

The relationship between the streamer and the brand does. 

So with advertising, most of the time, in a sense of ads on YouTube or anywhere else on the Internet, you don’t have much control what’s visible in your content.

In our case, every streamer chooses the campaigns to join, they see what’s the campaign about, what brand, how it looks like, and they have a choice to join it to represent the brand or not. 

And the second thing is, we call it sponsorships because for the past 10 years of live streaming, every time a brand appears within a stream, even if it was just a logo, even if it was just a piece of text, it was still called a sponsorship because it was directly in the content, it was chosen, embedded by the streamer. 

And we come from this pedigree, we want the streamers to perceive that they have a relationship with the brand, and also responsibility towards the brand they are representing. 

They have to behave in a certain way and they have to behave a certain way to the brand and of course the viewers also know it, so the viewers perceive those brands as sponsors, as people who help their favorite creators earn on their passion instead of just another ad that’s intrusive, because it’s also, it takes a smaller part of the stream, so it also is just more interesting for the viewers and less intrusive. 

And that’s why we call it sponsorships. Of course in some understanding, sponsorship is similar to sponsoring a football team, and this is quite far away.

So we call ourselves that we sit somewhere in the middle between influencer marketing, because it’s thousands of micro influencers choosing to work with a brand, digital media, because it’s measurable, you can run a/b tests, you can get data about every single moment when the brand was visible and we work on this data to optimize those campaigns. 

And from the third site, we are a bit like TV, so we are baked into the content, unblockable by ad blocks, the targeting is also content, not viewer based. 

And in the end, we also allow for much more creativity within the format than the standard mold of, let’s say, digital media has.

Michael Sweeney: Excellent, cool. I’ve got a couple of questions regarding the ad targeting and measurement part as well because I think that’s super important for brands, it’s probably one of things they ask you about all the time. 

But just with the actual creative of the sponsorship and that kind of thing, is that something that the brands generally come to you with already, or is that something that you work with them on to, kind of, provide best practices? 

Is it, like, a collaborative process between yourself, the brands, and even some of the streamers, or how does that kind of process look?

Wiktoria Wójcik: Yeah, it’s a new format in an area that’s not very well understood and very well known by marketers. 

So of course, we can work and with some brands, we work in a way that they deliver the creative, the artwork, maybe just get a feedback from us and that’s all. 

And with some brands, we help them craft whole campaigns, or just an idea for getting their, let’s say, TV ad and digital messaging and just molding it in a way that it suits livestreaming and gaming. 

So, we do those things because we know that it’s needed, that the help is still needed and appreciated. And we also expand into even helping brands with their overarching gaming marketing strategy, and bigger things, like even creating maps inside games like Roblox and Fortnite. 

So basically, we are able to branch out but it’s not needed, so if somebody just gets the technical and, let’s say, creative guidelines for the artwork, they can do it on their own and it’s not a problem for us. 

And in the future probably it’s gonna just be more and more brands. 

Usually, it’s like the first time we do it, the second time it’s a collaborative thing, and the third time the brand and their agency are able to do it on their own.

Michael Sweeney: Perfect. So, let’s maybe go back to those points about ad targeting and measurement that you mentioned before. 

So what does that look like in the streaming environment, what kind of ad targeting is available and what type of measurement data is also available to brands?

Wiktoria Wójcik: So when it comes to targeting, we are able to target per streamer, so we can exclude some streamers if the brand has has a blacklist or anything. 

We can target certain hours within a day and also change the messaging. 

So for example, if you have a convenience store, in the morning you might want to promote your coffee machine, and then in the evening, you want to maybe promote some lunch options. 

And then we can also target by content. 

So for example, you can exclude certain games. There are brands that really want to exclude every game that has realistic shooting in it, and we make sure that the brand will not be visible in those categories. 

And then we can also target by demographics in a sense that we gather demographics from the streamers, we are able to say okay, those streamers and this type of content will reach mostly older audiences, this type younger audiences, and we are able to skew the targeting one way or the other. 

So, we are also able to segment per game in a sense or pay per game category. 

If you’re a brand running a competition around League of Legends, you probably only want to promote in the League of Legends category and this is also possible.

Michael Sweeney: Perfect, excellent. And what about the measurement data, like you mentioned before you’ve got analytics and that kind of stuff, so what kind of information can brands see about how well their campaigns performed, etc.?

Wiktoria Wójcik: So they get every data. I’d say that wasn’t previously possible and just, like, manual sponsoring. 

So they get overall data of the campaign, the number of views, number of clicks, number of unique viewers, category streamed, unique brand appearances, and then they get data per each category. 

So they get data per streamer, they can view each streamer, the number of views of each streamer, and each time the streamer displayed the brand placement. 

So they can go really in-depth, and also see the CTRs of certain streamers and identify the, for example, biggest brand promoters for the future collaborations. 

Then you have categories, so you can see which messaging performed in which category, or just overall the campaign. So you have the clicks, number of views, the CTR, all this data for each category. 

And then if you have multiple artworks, for example if you want to do A/B tests, we also have this data for every time an artwork is shown, we know who had shown it, how many viewers there were, how many people clicked, unique viewers of that, what category was streamed, etc., so there is a lot of granular data. 

We also provide demographics data, the demographics data has one issue that it’s driven by Google Analytics and it means that it’s not covering people under 18, which is a lot of the category, but still it gives you a pretty good overview of who was the main major audience that you reached. 

So this is available in a live dashboard if it’s needed. And we also provide a direct report at the end, so we create a presentation with all the major data, and also with our recommendations for future campaigns, how to optimize it. 

So we’ve done, like, 500 campaigns and it means that based on this humongous amount of data, we are able to now decide where and how to set up a campaign in a way that it just delivers the best results.

Michael Sweeney: Excellent, sounds cool. So let’s talk about the brand side of things for now.

Like beside from the advertisers, brands that want to show their sponsorships, for example, on streaming, game streaming, etc., so what’s the general response from brands and do you guys work with brands that would be investing a lot in this, or are you starting to see some brands that are experimenting in this? 

What does that, kind of, look like from the brand perspective?

Wiktoria Wójcik: For most of the brands, the first campaign is always an experiment, so we start slow. And then we try to become a part of the media plan every time there is a Gen Z targeted campaign, or young people targeted campaign. 

It doesn’t even have to be targeted to gamers, because we help to tailor your back to school messaging in a way that it will fit within this game in context. 

For brands, for sure sometimes it’s hard to place us, because we are not entirely influencer marketing, not entirely digital media. 

In a sense, you can still put us in the Excel between Facebook and Google and see the measurements, the CTRs, the views, the CPV, etc., like we can be in this Excel, but still we are more in the non standard category. 

So we usually either work directly with brand marketers, people who care about brands going into those new places, reaching those gamers, and then with them we just go to their media agencies to distribute it. 

And with some media agencies, we have worked for over 3 years now that we are just a part of the media plan every time there is a Gen Z gaming angle within a campaign. 

So we’re then, it goes very, very quick and for the brands we are just a channel that’s fitting in this hole that was not filled before, especially in a media sense. 

And for brands, I’d say that they get excited with the creative opportunities that we bring. For example, ability to react to what happens in the game, or ability to react to what people type in a chat. 

Right now, we are, just in a week, releasing a campaign where we’ll be reacting to what the streamer says, so a voice recognition campaign. 

And we bring those opportunities and from this you can build up very, very interesting campaigns that are going much further than just saying you’re just running media within a stream. 

And I think this gets people excited, this gets people excited also because they know that esports is in a very rough spot, like a lot of sponsors withdrew, are checking the results and they are searching for a way to fill this void to reach those gamers. 

Influencer marketing got expensive and it was very expensive in streams, because it was not really well measured, it was very rare, because you had maybe 40 streamers on a given market and then they were too small to work with them, and then we come and unlock it. 

So it’s really fun, I’m not saying it’s very easy to sell, I’m saying it’s very easy to get people excited, but to sell, people have to make this effort to go out of their way, out of their standard media, to be willing to do something different. 

Once they do and they figure out it’s quite easy to do so, they stick with us, but the first moment, and the push, and the relationship, and the explanation, and knowledge that needs to be shared to have it done, it’s a pain point for us, so if there is a very innovative marketer that likes to do things differently, we might be a great fit to work with you.

Michael Sweeney: Perfect. Yeah, I mean I think that’s a great point as well, because I think for marketers, brand managers, etc., I think a lot of the time they, kind of, stick to the traditional channels, right, the ones that they know and have used many, many times. 

But I think it all comes down to the audience, ultimately, right, is finding the audience regardless of where they are, you know. 

And I think with streaming, it’s, kind of, like a, you probably, I wouldn’t say guarantee, but you, kind of, know that the audience are all going to be pretty similar, right. 

Like they’re all gonna have similar interests to a certain point, right. It’s not, like, when you’re watching TV, there’s lots of different people that could be watching the same TV program, for example. 

But with streaming, it’s a little bit more of a definition of the audiences maybe in some way, I guess, with that. 

So I think there’s certainly a lot of potential that it’s, kind of, maybe in a way similar to, as you mentioned before, some other kind of channels.

Like influencer marketing you mentioned, even maybe in-game advertising where, because that’s a fairly big channel as well now, there’s a bit more investment in that, showing actual ads on digital billboards, for example. 

But that’s a little bit of a different format to what you guys are doing, the sponsorship part is a little bit more, you’re probably gonna get a bit more awareness of the brand and it may be a bit easier to measure as well. 

So it definitely sounds like a very interesting channel that, as you said, brands should certainly explore, and experiment with as well. 

Because it’s all about experimentation, you’re not going to know if it works until you try, basically.

Wiktoria Wójcik: Yeah, I think that the biggest USP that we deliver is that we reach this audience that you cannot reach in any other way, because they either play games, or they watch gaming content and they use adblock, so good luck reaching them. 

We are inside the content that they watch and it’s unblockable by adblocks, so this is the way we solve it for sure.

Michael Sweeney: Yeah, definitely a very strong selling point. Excellent. 

The last question I have is about the growth of game streaming, and sponsorship within livestreaming as well, over the next, sort of, 5 or so years. 

So what does that kind of look like from your perspective, how do you see this channel growing and where will the growth come from? 

For example, will it be, as you said, about educating more brands about the potential and the advantages of this channel and the possibilities for them, or will it come from somewhere else? 

What does the, kind of, growth look like and where will it come from over the next, sort of, 5 or so years, let’s say?

Wiktoria Wójcik: So maybe I’ll start with how livestreaming will evolve, because I think brands always follow the eyeballs and the eyeballs will follow the growth of livestreaming. 

So first, I think we’ll get more worth between the platforms. I think YouTube overslept, they could have been much bigger in the last five years and they did not do much to address some pain points. 

They did, actually, last year do a lot of things to be on par feature wise with Twitch. I still believe in a sense that the Twitch monopoly will fall. 

It’s gonna be Kick, it’s gonna be YouTube, maybe multiple platforms, maybe more niche platforms for other kinds of live streaming, but we’ll get there. 

The second thing is the future of creators collectives, or like teams. 

We had this huge craze of esports teams that basically were entertainment companies, because the part of esports players playing the game, the best in the world, there were also streamers and content creators and a lot of it was based on getting to people with the content, with the entertainment value. 

So right now, those creators are skipping just doing the esports part, and they are doing just creator teams, working together on content, creating distribution channels, their own events etc., great example is OTK, a group of streamers led by Asmongold, one of the biggest streamers in the world. 

And they are doing streams together, they are doing their own indie game showcase events, other events, and they are also, right now, creating a publishing company for video games that will help market those games by working with the creators they have in this talent collective. 

And they, of course, are doing branded events, etc., a lot of content for brands, because this is how you earn money.

So we’ll see more of those teams, and also not only from big creators but also small creators, they are goning to team up. 

And technology, I think the rise of vtubers, vstreamers in the past couple of years. Last year, I think, at some point in the top 10 most watched streamers, there were 3 or 4 vtubers, vstreamers streaming. 

So it’s just gonna get bigger and I think brands will need to follow that. 

So we will see brands moving their budgets into either bespoke events created together with the creators, because those creators understand their audiences, or just overall getting into livestreaming, because it’s gonna be the place where people like celebrities stream to get in touch with their audiences. 

The second thing we will get, of course, these vtubers, more brands trying to make their own vtubers, more brands failing on doing that, and maybe sponsoring some vtubers and going into those virtual spaces and creating instead of events that take place offline, they would create, like, virtual places and online events with those vstreamers. 

Maybe we’ll see that. 

And the third thing, I think they will just follow the audiences, so I don’t see any way for livestreaming to really go down. 

I don’t think gaming, livestreaming, especially in the main market, the Western market, will grow much higher. 

Of course we have India, of course we have Latin America where there is potential to bring in more people.

And fun fact, in India, you have multiple localized livestream platforms and Twitch isn’t even in the top 3, I think, of the most popular gaming livestreaming platforms. 

So we’ll see a bit more fragmentation on the market and it’s gonna be a bit harder for brands to just be on top of what’s happening, but on the other hand, it’s gonna get so normal that you are visible in games, visible in livestreams

Like within five years, if somebody goes on a conference, marketing conference, and makes a presentation talking to marketers like oh, gaming is so big, gaming is so great, I hope that everyone leaves the room because this is nothing new. 

And in five years, I hope that we finally will get past the point of talking about oh, gaming is new and important and we’ll get to the point of okay, so how do we actually do gaming. 

And I hope that we, at inStremely, can be the answer to that.

Michael Sweeney: Excellent, super interesting insights there. Just a couple of quick questions there, you mentioned vstreamers and vtubers, is that right, what are they?

Wiktoria Wójcik: Yes, so you have a 2D or 3D avatar. In the case of 2D it’s most likely anime-like avatar, 3D can be 3D avatars, sometimes very human-like and sometimes just more out there. 

And this is basically streamers streaming as this avatar, of course, using their voice and the movement is tracked. 

But what viewers see on the stream is, of course, the gameplay, what’s happening, but the persona is just a drawing or just an avatar.

Michael Sweeney: Wow, so that’s, kind of, I guess, getting into the Metaverse world, or the virtual world as you said before, right?

Wiktoria Wójcik: I’d say yes and no in a sense that I always loved that the word that marketers love, so avatars, is never used by gamers. I don’t hear anybody saying oh, I want to dress my avatar up, like it’s not a word. 

But in a sense yes, I think we are getting more and more agreeable with the vision that our digital persona and a digital, let’s say, avatar is a good representation of who we are and we can be represented by that. We are getting just more and more adjusted that this can be true.

And this is why people don’t mind watching cute anime characters that also can get more fancy, be better dressed, etc., than a streamer every day could be. 

And on the other hand, for the streamers it’s just very easy to be a character, because you have a barrier between you and the viewers. You are acting as a character and you don’t always have to be you there. 

And when I was streaming, you are streaming for four hours a day, every day, at least four hours, and it’s very, very hard on you, especially as people are seeing you, commenting on your looks, commenting on what you do, how you do things, etc., and having this barrier of having an avatar, something that can be an act, it just lets you get more space. 

And in the long term, I think it’s just easier to stream in this way. 

So this is why people are watching vstreamers and I think it’s just very interesting, it’s fun. It would be very, very cringe to watch a girl be like hello everyone, I’m so cute. 

It’s very hard to act this way, but if I’m a cute character with bunny ears, maybe this can work, maybe I could do it.

Michael Sweeney: Yeah, perfect. You did a very good voice then as well, it’s very convincing.

Wiktoria Wójcik: You will never know if I’m a vstreamer, this is the point.

Michael Sweeney: I’ll have to look out for that voice.

Wiktoria Wójcik: I can be a businesswoman during the day and a bunny girl vstreamer during the night and nobody will know. And this is the appeal.

Michael Sweeney: A lot of appeal there, definitely. So just last question, you mentioned before about the word avatars mainly used by marketers, right. 

So what do vstreamers refer to as, do they simply just refer to them as their digital self?

Wiktoria Wójcik: There is a name, but I don’t remember, but usually it’s a character, like avatar is used in a technical term, but in a sense that people are talking about oh, every 13 year old girl has their own avatar and we use avatars in games like Fortnite. 

You don’t really talk about that, your skins for your character, you dress up, but it’s never, like, an avatar is a thing.

It’s just a joke, of course people will use it, I’m not saying that nobody uses it, but in a sense that I will hear this word more often on marketing conferences instead of in the game.

Michael Sweeney: Yeah, so just some differences between the lingo between the marketers and the people that are streaming the games, etc.

Wiktoria Wójcik: Yeah.

Michael Sweeney: Yeah, perfect, excellent. Wiktoria, that’s all the questions I had for today, was there anything else you wanted to add before we finish?

Wiktoria Wójcik: No, I think not. Maybe I will just leave you with a little thing to think about because gaming, of course, you might think: future, not the future, whatever. 

I’d say that right now, the next social media will be a game and already is because average TikTok viewer spends on TikTok around 90 minutes a day and an average Roblox player spends on Roblox average 150 minutes per day, and it’s also because they spend time with their friends there. 

So of course, you can miss out on games and don’t care about games now, but my kids for sure will not be using their phone to catch up with their friends. 

Most of the time, they will be in some kind of game and I believe that in a sense, in 10 years it’s gonna be very, very hard to distinguish what’s a game and what’s on the game, what’s a platform, what’s a movie, and what kind of entertainment part we are in. 

So even if it’s not your area, I would pay attention if I were you, because things, especially for the younger generations, are changing really fast and you’ll be surprised how big of a deal gaming is in being a part of their lives.

Michael Sweeney: Excellent way to finish the conversation, Wiktoria, some really great thoughts there. So, yeah, as I mentioned, that’s all the questions I have for today. 

If anyone wants to get in contact with inStreamly, I’ll leave a link to your website below in the description, but I think your website is just instreamly.com, right? I think it’s as simple as that. Yeah, so you can head over there and check it out.

Wiktoria Wójcik: Yeah, you can catch me also on LinkedIn. I share knowledge about gaming, gaming marketing, and just reaching Gen Z. 

So give me a follow on LinkedIn, it’s Wiktoria Wójcik, you will find the name in the title, so feel free to reach out to me if you ever have any questions about marketing to gamers.

Michael Sweeney: Perfect, excellent. I’ll leave a link as well to your LinkedIn profile as well, so people can click on that in the description as well. 

So yeah Wiktoria, thank you so much for that, that was a fantastic conversation. I learned a lot about the world of game streaming and livestreaming, so thank you so much for your time today.

Wiktoria Wójcik: Alright, thank you very much and have a good one.

AdTech

What Is In-Game Advertising and How Does It Work?

Mike Sweeney, +1

Jan 13, 2022

AdTech

What Are The Benefits of In-Game Advertising?

Paulina Zawiślak, +1

Mar 03, 2023

AdTech

Advertising Inside Game and Live Streaming Platforms: Q&A With Clearcode and inStreamly

Mike Sweeney

Dec 18, 2023

The post <strong>Advertising Inside Game and Live Streaming Platforms: Q&A With Clearcode and inStreamly</strong> appeared first on Clearcode.

In this article, we will focus on the different stages of television innovation over time and the way these changes have created the advertising systems we know today.

The post The Evolution of Television and the Rise of Advertising appeared first on Clearcode.

That’s where Clearcode comes in.

As a specialized software development company focused on AdTech and MarTech solutions, we bring to the table a dedicated team equipped with the necessary skills, insights, and experience.

Our goal is not just to provide you with the technical resources but to be a reliable partner in navigating the complexities of software development for advertising and marketing.

We understand the hurdles you face, and our team is here to provide stability, specialized skills, and support throughout the process.

Learn more about us, our approach, and the companies we work with by checking out our latest video:

Below is the transcript from the video interview above.

Michael Sweeney: Hello everyone, my name is Michael Sweeney and I’m Head of Marketing here at Clearcode. And in today’s video, I’m joined by my colleague and good friend Radek.

Radosław Kostecki: Thanks for having me, Mike.

Michael Sweeney: No problem at all, and Radek is Head of Business Development here. So Radek, just to start things off, just tell us a little bit about yourself and what you do here at Clearcode.

Radosław Kostecki: Sure. So yeah, Radosław, Head of Business Development, everyone calls me Rado. I’m responsible for managing the whole pipeline at Clearcode, so also talking with different potential customers, making sure that we’re in line, and we are finding the opportunities, and talking with different companies in the industry about AdTech development.

Which types of companies does Clearcode work with?

Radosław Kostecki: So essentially, mainly, these are not only the typical AdTech & MarTech vendors, like the companies that already have some existing stock, either a DSP, SSP, or any other system and we help them with our development expertise, but also publishers, big publishers especially, media agencies.

Also the non-typical verticals like retail media is quite common nowadays, and telco industry, even banking companies are looking more and more towards even marketing technology, so the range is quite wide.

The only thing is which is common is the AdTech&MarTech, this is what we specialise in, what we do.

What industries do our clients come from?

Radosław Kostecki: I’d say that all the companies that either want to join the AdTech world because they’re obviously some companies that are already on the market for many years, however there are companies with potential to become an AdTech company in some sense.

For example, telecommunication industry, retail media, which is very, nowadays, common, many companies are trying to get use of the first party data or monetize what they have at the moment, either the inventory ad spaces that they can also fulfil.

And if the scale is huge enough, big enough, it’s definitely a use case to actually build, have their own IP, own system that they can leverage.

Michael Sweeney: Yeah, definitely. And I guess going back 5 years ago when we looked at the types of companies that we’d work with and the industries they represent, I guess a lot of that it’s changed quite a bit, right.

It’s, kind of, moved with the times, as you said before there’s a lot happening with retail media, streaming, telcos as well.

So do you notice that change as well, that we’re, kind of, moving with the industry, I guess, and everything that’s happening there?

Radosław Kostecki: Yeah, you know, Mike, I think that one of the main changes in the industry is obviously the cookieless future and this also creates an opportunity for others to either have their own systems or create other workarounds apart from the cookies that were the base of the industry.

But still, there’s a lot of potential in terms of the company that thinks about their own IP and even the telco industry nowadays, like in the European market, they thought about the unified identification, for example, of the users.

And this creates a lot of demand for technology, for advertising technology especially, due to the fact that many of them are using or have a very complex ecosystem already in place and in order to, like, properly add the system into the existing part.

It can be a challenge using the 3rd party providers, and then there’s a lot of potential to actually create a new piece of the stack.

What problems do we help our clients solve?

Radosław Kostecki: So as I told you about the 3rd party providers, there’s, like, a lot of 3rd party white label or 3rd party providers that they charge you for the traffic or depending on the traffic you just get, like, a monthly fee, or a yearly fee.

And if the scale is big enough, there’s actually a use case to think about to cut the middleman and have the actual technologies their own, and the only thing to take into account then is just the development cost, infrastructure cost, either AWS, Azure, GCP, or whatever cloud provider is required.

This might be also an investment that they can save in the long run, to save actually the money.

The other part is the actual ownership and privacy concerns when you use the 3rd party provider. You actually need to share the data with the 3rd party provider, which for many companies, especially that cares about the 1st party data that they own, they cover, there’s like a pushback to actually use the white label provider.

And yeah, so those type of conversations are quite often the beginning of the journey when we talk with the customers, when there’s like a build versus buy, and when there’s, like, a build use case, Clearcode actually can help and navigate how to actually develop the system.

Why do companies decide to build custom software vs renting or buying existing AdTech platforms?

Radosław Kostecki: The acquisition part is very interesting and the whole AdTech market is a very dynamic space, so as we’ve seen last time even AT&T acquisition, or AppNexus transforming into Xandr, got acquired by Microsoft.

Those changes are constant in the AdTech industry and if someone decides to acquire the system, on the one side okay, this is an existing system with integration already in place, with even sometimes business relationship with the potential customers, on the other hand technologically how to actually adjust the acquired system to the ecosystem that is already in place, this is a challenge for many companies.

This is, like, challenging due to the actually work that needs to be done anyway. It can eventually, in the long run, even create much more problems and much more challenges related to customization and even rewriting some parts of the system to make sure that the scale is handled properly.

This is one of the reasons that someone even if thought about acquisition 1st, decides, in the long run, to actually build, yeah.

Michael Sweeney: Yeah, definitely. I noticed that you’ve touched on this a second ago as well, about the telcos with AppNexus being acquired by AT&T a few years ago.

And there are many examples of telcos that acquired, you know, AdTech companies, and then tried to, kind of, implement them into their existing business to, you know, grow, to build an advertising business, essentially.

But a lot of those acquisitions didn’t work out and as we saw, a lot of those telcos ended up selling that AdTech company, or that platform, often at a loss.

I guess the whole telco situation with AdTech is quite an interesting one, because especially when you look at how some other companies these days are getting into advertising, right, it’s a very different situation, they’re taking a different path with it.

Because with telcos, a lot of them went down the acquisition path, whereas companies like Uber, you know, some of the other super apps, Instacart, DoorDash, etc., a lot of those are building the software in-house themselves, right.

So they’re not going down the acquisition path, they’re focusing on the actual building part and it’ll be interesting to see how that works out because with the acquisition path, as you said, there’s a lot of risk, I guess, especially if, you know, not only the technical risk which you said as well, which is can be quite hard to overcome, a lot of technical challenges with that, but also in the business side as well.

You’re spending hundreds of millions of dollars on something, you know, you’ve really got to make sure you’ve got a proper plan in place.

And the question is whether you’re actually wanting just the tech, or the existing business as well, right, because companies like AppNexus were existing, huge businesses, right, they were generating revenue.

So yeah, it’s quite interesting to see what happened with the telco situation with AdTech and obviously how it’s different with a lot of other companies as well.

Radosław Kostecki: Indeed, Mike. I think that even the conversations, ongoing conversations, that we have, not only the customers from the industry, but also the customers, potential leads that thought about building the systems, when you look at their ecosystems, what they’re struggling with, even the legacy systems or they have such complexity that is challenging for them to actually narrow, even on the business level, narrow properly the strategy.

And Clearcode not only develops the system, which is the end goal, but obviously also the strategy is crucial to make sure that this is in line with what the company wants.

Obviously the business details are the ones that the customer has the biggest input on, but we can always address, based on our past experiences, also givethe value added.

Those conversations are very interesting and this is definitely a trend in the industry, that the telco industry, eventually, many of those companies will become an AdTech vendor, in fact in.

As for the super apps like Uber, DoorDash, any others, those have just an upper hand of the 
data itself, so it’s quite a no-brainer to them to actually decide to build their own systems.

Why do companies choose us vs hiring developers internally or using body-leasing companies?

Radosław Kostecki: Sure, for sure in terms of building the advertising systems, expertise is important. 

Because Clearcode throughout the 14 years of our history building those systems, we’ve come up with different use cases, very specific, complex systems that had to cover like high scalability, either the system had many integrations in place that we had to also develop and create.

I’d say the more complex project gets, the more Clearcode might be a better fit, because someone takes responsibility to actually develop the system, or the stakeholders from the company actually need to make sure that this would be a success, many of the companies tried to do it internally first, then came back to us, because they actually failed with the with the initiative.

It’s not always something that we say, that for all of the projects it needs to be

Clearcode in the first place, we’re always open for different approaches, but obviously the more project requires high scalability, high QPS, the traffic will be huge, those are not like a simple platforms to develop, like it requires just a lot of experience.

So this is the upper hand we give, time to market should be as quick as possible for the MVP to be live.

Michael Sweeney: Yeah, definitely. And I think, you know, as you said experience, expertise, skills in this area, it’s quite important, right, because as you said before, the more complex the platform is, the more experience you need to have building it, right.

And I guess even with, you know, platforms, like common platforms, like DSPs, even though they are very common platform within the industry used by, you know, there’s, like, hundreds, possibly even thousands of vendors on the market.

When it actually comes to building it is still a quite a complex thing to build, right, because you’ve got to integrate with the open RTB protocol, you’ve got to understand what a bid request is, you’ve got to understand how long you’ve got to respond to a bid request as a DSP, or bidder.

It can be very hard for, I guess, you know, you’re even a seasoned, experienced software developer who has no experience in AdTech actually building it, right.

So if I don’t know what a DSP is, they’re going to have no chance of building it, right, because they have to learn all the, you know, the inside things about how it all works and stuff.

Radosław Kostecki: Funny thing in terms of AdTech is that we have a lot of 3 letter acronyms, a lot of shortcuts DSP, SSP, CDP.

Even when we talk initially with our customers, sometimes they say OK, I want to build a DSP, but if we dive into details, deeper requirements and find out that not necessarily this is the actual end system that needs to be developed.

So a lot of terms, the domain is also quite huge in terms of the potential systems that can be developed, so we always like try to navigate customers in the discovery to make sure that it’s in line with what they’re expecting.

Michael Sweeney: Excellent, perfect. So yeah, that’s all of the questions I had for today Radek, so thanks so much for joining me today and sharing your insights.

If you’d like to learn more about custom AdTech&MarTech development, if you have any questions at all, feel free to get in contact with us via our website clearcode.cc.

You can also get in contact with Radosław Kostecki on Linkedin, he’s very active on Linkedin, so he’ll probably reply to your Linkedin message before he replies to an SMS, so check out Radosław Kostecki and get in contact with him as well and we’ll see you next time.

Clearcode

AdTech/MarTech Development and the Vicious Cycle Plaguing Vendors and Agencies

Maciej Zawadziński, +1

Jul 16, 2018

AdTech

AdTech/MarTech Development Teams: In-House vs Outsourcing vs Development Partner

Mike Sweeney

Aug 27, 2018

AdTech

Q&A With an AdTech Developer: How To Implement Prebid Server

Mike Sweeney

May 25, 2023

The post The Companies Clearcode Works With: Q&A with Radosław Kostecki appeared first on Clearcode.

Carrying out these processes results in high infrastructure bills. Optimizing various cloud-computing services can help reduce the costs, however, it’s often a time-consuming process that many DevOps teams simply don’t have time for.

Enter Antimetal.

Clearcode’s Head of Marketing, Michael Sweeney, recently spoke to Matthew Parkhurst, co-founder and CEO at Antimetal, to learn more about how Antimetal helps companies save costs on their AWS infrastructure setups.

Tell us a bit about Antimetal and what you guys do.

Antimetal automates AWS savings, giving you the flexibility of on-demand services with the savings of long term commitments.

What is the main problem that you help companies solve?

Forecasting AWS spend is incredibly difficult and time consuming. Done wrong, it can cost companies a significant amount of money. We make forecasting easy and drastically reduce the risk of making the wrong forecast for your AWS bill. This allows companies to engage with long-term AWS commitments and their associated savings, without worry.

Antimetal helps companies save money on AWS costs. You have recently started focusing on the AdTech industry, why is that?

Our customers in the AdTech space routinely experience the same problems: Extremely high AWS compute spend. Our tool is ideal for the space as we allow AdTech companies to see an average saving of 62% on their AWS in minutes.

Infrastructure costs are one of the biggest costs for any AdTech company. Tell us about how AdTech companies can reduce these costs manually (i.e. by relying on their DevOps teams to make optimizations) vs using Antimetal to do it? What are the main advantages of using Antimetal in this situation?

Antimetal is not a replacement for DevOps teams, but a useful tool to help them achieve their goals of reducing AWS costs. 

Our best customer is one that has optimized their AWS spend but needs to take their optimization to the next level. 

Our algorithm collects data across a wide array of sources, from the AWS Reserved Instance marketplace to utilization and coverage, allowing us to generate recommendations far beyond what companies would see in Cost Explorer or other savings tools on the market. 

How specifically does Antimetal help AdTech companies reduce the cost of the AWS bills?

Antimetal analyzes customers accounts to see exactly how best they can save on their AWS bills. We’ve built a complex dataset for AdTech customers allowing us to maximize their savings in a unique manner. 

Learn more about Antimetal here.

AdTech

How We Built an Ad Exchange with Amazon Web Services (AWS)

Mike Sweeney, +1

Sep 26, 2019

Clearcode

Clearcode Joins the AWS Partner Network Program

Mike Sweeney

Dec 18, 2019

AdTech

How We Built the SITO Mobile Demand-Side Platform (DSP) on AWS [case study]

Mike Sweeney

Mar 04, 2020

The post Saving Money on AWS for AdTech: Q&A with Matthew Parkhurst from Antimetal appeared first on Clearcode.

With a staggering $45 billion US retail media market, retailers are attempting to seize the golden opportunity that retail media presents to not only cater to evolving consumer preferences, but also open up new avenues for advertisers seeking to engage with their most coveted audiences.

In this blog post, you will learn about the opportunities for retailers and advertisers in the retail media space, as well as the challenges related to using AdTech within the retail landscape.

Key Points

• Retail media networks (RMNs) are capturing a growing portion of marketing budgets as manufacturers and brands redirect their expenditures to focus on engaging consumers in proximity to the point of purchase.
• The end of third-party cookies in web browsers and the focus on using first-party data for advertising is a key force that’s driving interest in retail media.
• Between 2024 and 2027, retail media is expected to be the fastest-growing advertising channel.
• The main benefits of retail media for advertisers are closer relationships with their consumers, more accurate targeting, and closed-loop attribution.
• The main benefits of retail media for retailers are the ability to unlock and monetize their first-party data, improve inventory management and sales, and boost company revenue.
• The main challenge for retailers when building a retail media network is finding a software development partner that has experience in AdTech development.

The Rise of Retail Media

While both retail and retail media share the common goal of driving sales and enhancing the customer experience, they operate on distinct fronts within the retail ecosystem, so it’s crucial to differentiate them.

Retail, in its classic form, encompasses the brick-and-mortar stores and e-commerce platforms where products and services are sold directly to customers.

Retail media, on the other hand, is a relatively new phenomenon that has roots in traditional retail advertising but has evolved to adapt to the digital age; it represents a convergence of commerce and advertising within the retail space.

There are various reasons for retail media’s rise in popularity among advertisers and retailers, one of which is the desire to reach consumers just as they’re about to buy a product.

The end of third-party cookies in web browsers and the focus on using first-party data for advertising is another key force that’s driving interest in retail media.

Yet another key aspect is the fact that the demand for shopper convenience has become one of the top priorities, accelerated even more by the transformative impacts of the pandemic and continuous technological advancements.

This leaves retailers with no choice but to accommodate consumers’ needs by improving the overall shopper experience, whether it’s through a smoother shopping process or by providing personalized but non-intrusive ads.

Moreover, in a recent survey by Prosper Insights & Analytics, around 19% of consumers expressed a preference for the convenience of purchasing online and utilizing in-store pick-up services, while 18% used grocery delivery apps, and 16% made regular online purchases for home delivery, making it crucial for retailers to boost their social media presence either through paid advertising or social media marketing, which will simultaneously generate traffic in their physical stores.

It’s also worth mentioning that from 2024 onwards, and at least until 2027, retail media is expected to undergo an exceptional upswing, meaning that establishing a fresh retail media partnership model that brings retailers, advertisers, and AdTech together will be crucial.

The Benefits of Retail Media for Advertisers and Retailers

As the digital advertising landscape continues to evolve, retail media is poised to play a pivotal role in the success of both advertisers and retailers, as it represents a win-win situation for both groups. 

In short, advertisers can gain access to highly targeted audiences, improve their ROI, and obtain valuable insights, while retailers can enjoy a new revenue stream, enhanced customer experiences, and a competitive edge in the market.

However, let’s explore a bit further to see what advertisers and retailers can actually gain by including retail media as part of their business strategy.

For Advertisers

Being Closer to Consumers

In order to reach consumers right on the verge of purchasing the product, manufacturers and brands are increasingly redirecting their investments, mainly into RMNs. 

According to research done by McKinsey, 73% of advertisers expect to boost their spending on RMNs in the next 12 months, and RMNs are anticipated to account for roughly 10-15% of the complete media expenditure.

Targeting Shoppers Accurately

RMNs employ sophisticated data analytics to identify and reach ideal shoppers. By tapping into first-party shopper data, advertisers can gain invaluable insights into consumer preferences, behaviors, and needs, ensuring that customers are exposed to products that genuinely resonate with their interests.

Implementing Closed-Loop Attribution

With ad impressions and sales occurring within the same platform, advertisers can precisely monitor the effectiveness of their advertisements and, therefore, readily demonstrate that their marketing efforts are delivering tangible results.

Thanks to closed-loop attribution, the influential marketing channels are automatically credited, making it easier for advertisers to understand the customer journey and to determine which of their ads contributed to a conversion.

For Retailers

Unlocking First-Party Data

In the world of retail media, Amazon and Walmart significantly dominate the industry due to their large amounts of first-party consumer data. 

However, across the entire retail media ecosystem, numerous independent AdTech companies exist to help retailers unlock the value of their first-party data to power audience targeting, measurement, and attribution.

Improving Inventory Management and Sales

AdTech can help with better inventory management since it can provide product information and highlight product availability at specific stores. 

This can help retailers promote the products they have in stock and avoid promoting those products that are out of stock, leading to better inventory management and an increase in sales.

Boosting Revenue

It’s not always possible for retailers to increase the margins on their products, but by building an advertising business, they can create a new revenue stream.

By establishing an advertising business that’s centered around their first-party customer data, retailers can create a new revenue stream that will allow them to offset revenue from low-margin or fixed-margin products sales.

The Main Challenges Retailers Face When Building a Retail Media Network (RMN)

Despite the rise in popularity and investment, the retail media industry is facing growing pains. While most of these issues are business related, some are connected with the technological side of building and running a retail media network.

Balancing Ambition with Pragmatism

While the potential for any retailer with a receptive audience to establish an RMN exists in theory, the practical execution of such networks demands a substantial investment of both time and financial resources.

As marketers venture into the world of retail media, they are confronted with the intricate challenge of managing media purchases across numerous networks. The endeavor, although promising in terms of reach, often proves to be costly and time-intensive.

Retailers that decide to go down the build-it-yourself path quickly realize that developing an AdTech platform to power their retail media business is not an easy task, even for seasoned developers. 

Without support and input from an experienced AdTech development partner, retailers will likely experience delays in launching their retail media network.

Navigating Uncharted Territories

Even with the potential of closed-loop attribution, the absence of standardized measurement practices is a prevalent concern, making it difficult for advertisers to measure ad campaigns. 

This lack of universally accepted metrics and methodologies also hinders effective assessment and comparison across campaigns and platforms.

It’s a challenge that retailers face when building a retail media network, but that’s not to say that it can’t be achieved with the right technology and first-party data strategy. 

Also, it’s likely that industry bodies like the IAB will introduce measurement standards for retail media in the future, just as has been done for other digital advertising channels.

Shifting From Expansion to Consolidation

As the retail sector witnesses a gold rush of retailers vying to establish their RMNs, the industry will soon find itself with a fragmented landscape that includes hundreds of RMNs for brands to choose from. 

Smaller retailers at the fringes of this expansion may face a natural process of consolidation and be acquired by larger players. 

For retailers, the influx of competitors necessitates a strategic approach that encompasses innovation, value proposition differentiation, and a keen awareness of the evolving market dynamics. 

For this reason, it’s vital that retailers get the technology part right — both the internal and external integrations, as well as the technical consultancy and development aspects — when building their RMNs.

Doing so will help them to fully utilize their first-party data.

Maintaining Exclusivity and Attraction

The allure of cultivating a walled garden approach, while fostering exclusivity, comes with the inherent risk of alienating potential advertisers. 

Striking a balance between creating an enticing environment for advertisers and upholding the principle of openness is an ongoing challenge for RMNs, but it can be achieved with the right business strategy and development partner.

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The post The Benefits of Retail Media for Retailers and Advertisers appeared first on Clearcode.

But here’s the thing: the DSP and the bidder are slightly different. The DSP encompasses a comprehensive system with various components and features and serves as the platform for advertisers to purchase and oversee digital advertisements, whereas the bidder’s role is bidding on ads according to the advertiser’s specified targeting parameters.

When it comes to using or offering a DSP, companies can either build one, rent one, or buy one. This decision is important from a strategic point of view, as it involves different costs and effects, but not every company has the same opportunity; i.e., for some companies, the only choice will be to build a DSP, whereas others might be better off renting or acquiring a DSP.

In this blog post, we’ll discuss the pros and cons of building a bidder or a DSP for advertisers, brands, and tech companies.

Key Takeaways

• A demand-side platform (DSP) is an advertising technology platform that allows advertisers to buy ad space from publishers in real-time, targeting specific audiences.
• DSPs emerged in 2007 with the introduction of real-time bidding, allowing advertisers to procure ad space from multiple publishers at once.
• The features of a DSP include ad campaign optimization tools, integrations with ad exchanges, supply-side platforms (SSPs) and data platforms, analytics and reporting modules, and a user-friendly interface.
• A bidder is a key component of a DSP. It uses algorithms to place bids on ad impressions based on the advertiser’s targeting criteria, ensuring the acquisition of valuable impressions at optimal cost.
• The key features and requirements of an RTB bidder include modularity, speed, reliability, scalability, and efficiency.
• Companies have three options when it comes to using a DSP: building one from scratch, renting an existing one, or buying and customizing an existing platform.

What Is a Demand-Side Platform (DSP)?

A demand-side platform (DSP) is an advertising technology (AdTech) platform where advertisers buy ad space on an impression-by-impression basis from publishers via ad exchanges and supply-side platforms (SSPs). 

DSPs will integrate with dozens of different ad exchanges and SSPs to increase an advertiser’s chances of reaching their target audiences.

A DSP is like a stockbroker for ad space, where advertisers and agencies buy ad inventory from publishers just like investors buy stocks from companies.

The emergence of DSPs dates back to 2007, when real-time bidding first appeared, allowing advertisers to buy ad inventory on an impressions-by-impression basis across numerous publishers.

Despite being perceived as existing for the singular purpose of buying available ad space, DSPs include various components to manage, deliver, optimize, and report on ad campaigns. 

These components include:

• Ad campaign optimization elements, such as budgeting, campaign tracker, and bidder.
• Integrations with ad exchanges, SSPs, and data platforms.
• Analytics and reporting modules that provide comprehensive data and analytics to advertisers and ad agencies, allowing them to optimize their RTB purchases based on insights from previous ad buys.
• User-friendly interface for properly creating, managing, and optimizing ad campaigns.

An essential feature of DSPs is their ability to leverage data from data management platforms and other sources to improve ad targeting and optimize media purchases. Through these insights, advertisers can run campaigns more effectively, reaching their target audience with increased precision.

What Is a Bidder?

A bidder is a key component of a DSP that is responsible for making real-time bidding decisions on behalf of advertisers. Essentially, it incorporates algorithms that place bids on ad impressions based on various parameters and targeting rules the advertiser sets.

When a user visits a website, an ad impression opportunity is created and sent to an ad exchange. The ad exchange then auctions off this ad impression to DSPs. 

The bidders within DSPs evaluate the ad impression based on the advertiser’s predefined criteria, such as audience demographics, the user’s browsing history, and time of day. After evaluating the bid request, the bidder determines the value of the impression and places a bid accordingly.

This entire process, from the moment the user visits a website to the placement of the ad, happens in milliseconds, which is why it’s known as real-time bidding (RTB). The goal of the bidder is to win impressions that are most valuable to the advertiser while ensuring cost-effectiveness by bidding the optimal amount to win the ad space without overpaying.

Key Features and Technical Requirements of an RTB Bidder in a DSP

A bidder is a critical component of a real-time bidding (RTB) system in digital advertising. 

Here are the key features of an RTB bidder:

1. Modularity and customizable algorithms: A bidder supports various modules and adaptable bidding algorithms. These modules can ascertain factors like the publisher’s URL and the user’s location. Additionally, the bidding algorithms can adjust bidding behavior based on certain criteria, such as bidding higher for specific URL categories or pacing bids to avoid exhausting the entire budget at the campaign’s onset.
2. Speed and reliability: Given that most ad exchanges mandate a bid response latency of less than 125 milliseconds, bidders are built to receive and respond to bid requests before being timed out. They are located in the same data center as the ad exchange in order to respond to the bid request in time. The architecture of these bidders is designed to be asynchronous so that they can maintain rapid response times even when interacting with third-party services. Bidders also need to maintain high performance.
3. Scalability and efficiency: Bidders need to be scalable and operate efficiently to maximize the use of resources. A balance should be struck between optimizing the bidder for performance and using additional hardware resources. During peak Internet traffic periods,  leveraging cloud computing enables server resources to be scaled appropriately.

Now, let’s look at the pros and cons of building your own RTB bidder or DSP.

Pros and Cons of Building a DSP or a Bidder for Tech Companies

Determining the optimal approach for integrating a DSP into your digital advertising strategy involves carefully considering various factors. For tech companies, the sole viable option is building a custom DSP. At the same time, brands, agencies, and other enterprises can choose between building, renting, or buying based on their business objectives.

Building a DSP from Scratch

Creating a DSP from the ground up is a daunting task, but it comes with several potential advantages. However, this approach is best suited to companies with existing tech (e.g., AdTech companies) or ad agencies with a substantial media budget that can secure the necessary technical expertise for the maintenance and development of the platform.

Advantages of Building a DSP

• No markup on media:  Cut out the middleman and save on commissions.
• Intellectual property ownership: Building their own DSP adds to a company’s asset portfolio.
• Control over data: The company retains full ownership and control over their data, ensuring no third-party access.
• Control over DSP features: The agency has the flexibility to design and modify features based on their specific needs.

Disadvantages of Building a DSP

• High costs: Building a DSP from scratch involves significant upfront and ongoing expenses.
• Long development cycle: It takes time to develop a functional DSP and start running campaigns through it.
• Learning curves: Understanding the intricacies of a custom-built DSP can be challenging.
• Maintenance and infrastructure costs: These are recurring expenses that are unavoidable.
• Connection with SSPs and ad exchanges: Establishing relationships with supply-side platforms (SSPs) and ad exchanges is an additional challenge that requires resources and can be particularly daunting for inexperienced developers.

For tech companies, building a custom DSP is the only route available. The unique technical capabilities and innovative ethos of tech companies position them to take full advantage of developing a DSP tailored to their specific needs. While this endeavor necessitates significant investment and expertise, the rewards include complete control, data ownership, and the opportunity to refine the DSP’s features over time.

One of the major challenges in building a DSP is securing seats at the major ad exchanges. As a newcomer, you may lack the credibility or purchasing volume required to earn these seats initially. However, if you have existing relationships with supply-side platforms and ad exchanges, then it is a matter of handling the technical side of the integrations.

Alternatives to Building a Custom DSP

If building a DSP from scratch is not feasible, there are other alternatives that offer similar benefits.

One alternative is to build a meta-DSP. 

A meta-DSP is a piece of software that sits on top of existing DSPs andhelps manage and automate campaign design, targeting, trafficking, and reporting across various DSPs.

In contrast to a standard DSP, a meta-DSP typically doesn’t engage in media buying itself. Instead, the DSPs linked to the meta-DSP handle media buying through RTB auctions.

The primary function of a meta-DSP is to provide brands and advertising agencies with the capability to create, configure, and oversee multiple campaigns across diverse DSPs using a single user interface.

A meta-DSP evaluates the distinct targeting capabilities and inventory sources of the connected DSPs. It can also select the most appropriate DSP for procuring a specific impression, guided by the campaign’s KPIs.

Summary

The choice between building, renting, or buying a DSP comes down to your company’s budget, technical capabilities, and specific business needs. Each option comes with its own set of pros and cons that need to be carefully considered before making a decision.

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The post Pros and Cons of Building Your Own RTB Bidder or DSP appeared first on Clearcode.

Players from various industries, such as retail, media and entertainment, telecommunication, and gaming, are deciding to build their own DSPs. In this blog post, we cover their main reasons for developing this AdTech platform.

Key Points

• A demand-side platform (DSP) is an AdTech platform for ad buyers (brands and ad agencies) to purchase ad inventory on an impression-by-impression basis.
• DSPs are connected to ad exchanges and supply-side platforms (SSPs) and enriched with data from data platforms like data management platforms (DMPs) and customer data platforms (CDPs).
• Advantages of DSPs include automated ad buying, scalability, cost-effectiveness, and precise audience targeting.
• Key market drivers for DSPs are the demise of third-party cookies, new and emerging digital channels, the development of new ad formats, a focus on contextual and content-driven advertising, and regulatory compliance.
• Companies can enter the DSP market by acquiring an existing DSP, renting one, or building their own.
• Reasons companies want to build their own RTB bidder or DSP include capitalizing on first-party data assets, cutting costs on media, gaining autonomy, and addressing measurement challenges. Building a DSP also allows companies to optimize their demand path, avoid exchange bias, occupy niche verticals, and gain new clients with ad fraud detection and other security mechanisms.
• As the advertising industry experiences significant growth, companies from various industries are exploring the potential of building their own DSPs. Among new entrants, retail, telecommunications, publishing, media, and entertainment are the leading industries.

What Is a Demand-Side Platform, and What Is It For?

A demand-side platform (DSP) is an AdTech platform for ad buyers such as brands and ad agencies to purchase ad inventory on an impression-by-impression basis. The buyers can set the advertising campaigns and programmatically bid to purchase precisely targeted video ads, display ads, in-game ads, etc. 

To run and complete the buying process, DSPs are connected to:

• SSPs and ad exchanges to purchase ad inventory.
• Data management platforms (DMPs) to provide a more detailed view of customers and create more personalized marketing messages.
• Customer data platforms (CDPs) to track and manage the customer journey more effectively.

The most common way DSPs buy available ad space on websites and apps is via real-time bidding (RTB). The RTB process is a live auction whereby DSPs bid on impressions offered by ad exchanges and supply-side platforms (SSPs).

The Key Functionalities of a DSP

DSPs enable brands and advertisers to streamline the procurement of ad impressions across various supply sources. By automating the process, they enhance efficiency and precision in targeting the intended audience while managing costs effectively.

Some DSPs also leverage artificial intelligence and machine learning to enhance their functionality. While not all DSPs incorporate these technologies, a subset employs AI and ML techniques to optimize ad placement and pricing. These tools analyze data patterns and user behavior to guide advertisers towards optimal ad placements, ensuring they reach individuals who are most likely to engage and convert.

In other words, DSPs facilitate the intricate task of purchasing ad impressions across diverse platforms, and when coupled with AI and ML capabilities, they can potentially elevate the accuracy and impact of advertising efforts.

For that reason, DSPs:

• Manage ad inventory: Advertisers can set up ad campaigns, buy ad inventory from various publishers, and optimize the performance of their campaigns through a single user interface.
• Track campaign performance and optimize campaigns in real time: DSPs offer advanced tracking and analytical tools, allowing advertisers to monitor ad performance, make data-driven decisions, and optimize campaigns in real time.
• Bid in real time: DSPs work in conjunction with supply-side platforms (SSPs) to enable real-time bidding across multiple ad exchanges, enhancing access to quality ad spaces.

The Key Advantages of a DSP

DSPs enable automated ad buying, thus freeing up marketers’ time and resources that were previously spent on manually negotiating with publishers. 

In addition to automation, DSPs have a few other general advantages:

• Scalability: DSPs offer greater access to various forms of ad inventory because of their connections to SSPs and ad exchanges.
• Cost-effectiveness: Through real-time bidding and automated decision-making processes, DSPs can optimize costs by determining the most suitable bid for an ad in real time.
• Targeting specific audiences: With the help of data, AI, and ML, DSPs facilitate the targeting of specific audience segments across a range of publisher sites, allowing for more precise and effective advertising campaigns. For instance, targeting options may include behavioral, lifestyle, demographic, device, audience lookalikes, in-market audiences, contextual, and retargeting.

Key DSP Market Drivers

The DSP landscape is influenced by several factors — from the growing amount of first-party data to the demise of third-party cookies and strict privacy regulations. 

Although these factors will have a negative impact on how DSPs have been working up until now, DSPs will need to evolve to help advertisers navigate this new world — e.g., by allowing them to utilize their first-party data for ad targeting.

Below, we explain the current major reasons behind the ever-changing market and the role DSPs can play.

The Demise of Third-Party Cookies

Although the demise of third-party cookies in web browsers is negatively impacting the DSP market and the AdTech market more broadly, there are many opportunities for existing companies to update their existing DSPs and for new entrants to enter the space to provide solutions to this challenge.

Third-party cookies have been a crucial tool for audience targeting and retargeting in digital advertising. With their phasing out due to privacy concerns and regulatory changes, advertisers are actively seeking alternative targeting solutions. 

DSPs can capitalize on this need by offering sophisticated targeting capabilities that leverage first-party data and alternative identifier solutions and technologies, such as UID 2.0, FLEDGE, and Topics API.

New Ad Formats Development

Since the very first display ad in 1994, new ad formats have emerged and taken over the digital space on computers, mobile devices, audio services, and television. Wherever the audience is — in games, on TV, on retail sites, etc. — ads are sure to follow. 

DSPs aim to buy ads precisely targeted at specific audiences, whether these are in-game ads, native ads, social ads, etc. And these platforms do it close to real-time. Advertisers can rely on the dynamic that DSPs give them in terms of running modern ad campaigns.

Focus on Contextual and Content-Driven Advertising

With the limitations on individual user tracking, contextual advertising is gaining importance. Contextual targeting displays ads based on the content of the web page rather than user data. DSPs that can effectively leverage contextual targeting and dynamic content optimization will likely see increased demand from advertisers who want to reach relevant audiences in a privacy-friendly manner.

Regulatory Compliance and Ad Verification

As ad environments become more complex, advertisers are increasingly concerned about brand safety and ad fraud. DSPs that offer robust ad verification tools and ensure brand-safe placements will be preferred by advertisers seeking to maintain a positive brand image and maximize campaign effectiveness.

Should Companies Build, Rent or Buy a DSP?

To enter the DSP market, a company can build a custom DSP, rent an existing one (e.g., a white-labeled DSP), or acquire a DSP vendor. Each approach has its pros and cons, but there are many advantages for companies that build their own DSPs.

Pros and Cons of Building, Renting, or Acquiring a DSP

Here is the comparison between these options.

Top DSP Companies

As said earlier, the value of the DSP market will reach USD 92.12 billion by 2029. The majority of that number will probably come from the top DSP companies that dominate the global market. Among the largest players are well-known giants such as Amazon, Facebook, and Google. However, the space in the vertical also includes smaller companies.

The Top Reasons Why Companies Want to Build Their Own RTB Bidder or DSP

The decision to construct an RTB bidder or DSP is strategic. Whether driven by cost-efficiency, technological autonomy, or market diversification, the benefits of building a bidder or DSP underscore its role as a tool for companies aiming to thrive in the digital advertising ecosystem.

For Ad Agencies

Saving on the cost of media

By far, this is the biggest reason for building a bidder or DSP — especially for ad agencies. Due to various trends and changes within the online advertising ecosystem over the past decade, the role and position of ad agencies has shifted. Before the introduction of the Internet, ad agencies were a critical component of a brand’s advertising activities, handling everything from creating the ad to delivering it to a publisher’s sales team. 

But towards the late 2000s, when new AdTech companies were coming onto the scene, we witnessed something that we’d never seen before: brands were bypassing the agency and working directly with AdTech companies due to the ease of use these platforms provide. 

As a result, agencies have been playing damage control, working tirelessly to reestablish the value they provide their clients. With this has come a need to cut costs.

And one of the main ways agencies can cut costs is by eliminating the fees they pay to AdTech companies — demand-side platforms in particular. 

Depending on the vendor, some agencies pay between 10% – 30% in commissions. On average, SSPs and DSPs collect 35% of programmatic spend. And, if an agency’s media spend is in the tens of millions of dollars per year, then there’s a significant number of dollars going to DSPs.

Control over tech stack

By building their own RTB bidder or DSP, ad agencies control the tech stack and gain autonomy. This includes the freedom to design and implement tailored features, integrations, and a strategic product roadmap. This heightened control ensures agility and adaptability, enabling the agency to respond to evolving market demands and emerging trends.

By controlling their tech stack, agencies can also avoid the limitations and uncertainties associated with third-party solutions and ensure that the platform is tailored precisely to their unique needs and preferences.

For Tech Companies

For AdTech companies, the decision to build their own DSP is more than a strategic choice — it’s often the only viable path. 

Relying on an existing DSP creates potential issues around competition and relinquishes the control needed over tech stack customization, integrations, and feature development. This essential control grants AdTech companies the ability to fine-tune their offerings and align with their unique value propositions.

Expansion of product offerings

Often renowned for their innovation and technological prowess, tech companies can exponentially expand their product offerings by venturing into the realm of DSPs. A prime example is a server company delving into the creation of a DSP. This strategic expansion not only diversifies the company’s revenue streams but also leverages their existing technical expertise to enter a new market segment. By building their own DSP, tech companies can seamlessly bridge the gap between technology and advertising, providing a comprehensive solution that caters to diverse customer needs.

Benefits of Building Your Own Bidder or DSP for Advertising Operations

Optimizing Demand Path

Building a DSP allows companies to ensure transparency throughout the entire ad delivery chain, eliminating any uncertainty about where their ads are placed and who views them. This newfound transparency builds trust with customers and partners, fostering more fruitful relationships in the long run. An important part of this aspect is demand path optimization (DPO).

Avoiding Exchange Bias

Companies also strive to avoid any bias towards particular publishers or exchanges, seeking complete neutrality in their advertising operations. By building their DSP, they eliminate concerns about undue favoritism and maintain an even playing field for all stakeholders involved.

Occupying Niche Verticals

The realm of AdTech is branching into new territories, including in-game advertising, mobile ads, and streaming TV ads. As AdTech expands its reach, companies can capitalize on these specialized domains by building highly customized DSPs tailored to cater to the specific needs of each niche. This can lead to a higher return on ad spend (ROAS) for their clients.

One example of a company entering the DSP market is MarTech company Zoomd Technologies. In 2021, they built Mobile DSP to deliver mobile RTB-based campaigns across multiple ad exchanges to their clients. Among the many reasons behind their decision were mobile-oriented causes in particular.

Another example is SITO Mobile, a US-based AdTech company that allows advertisers and ad agencies to run location-targeted mobile ad campaigns via its proprietary demand-side platform (DSP).

Enhanced Security and Protection

Advertisers seek platforms that enhance their brand’s security, eliminating the threat of displaying ads in an inappropriate space. At the same time, they want to safeguard their ad budgets from the growing ad fraud phenomenon.

By incorporating protection services, anti-fraud algorithms, dedicated marketplace quality teams, exclusion and inclusion lists, sensitive site blocking, and more, companies that build their own DSP will probably win a piece of the market.

Entering The Expanding AdTech Landscape

As the advertising industry experiences a remarkable surge in global digital ad spending, with projections indicating a 10.5% year-on-year increase in 2023, reaching a staggering USD 696 billion, companies across various industries are waking up to the immense potential of building their own DSPs. The leading industries among new entrants are primarily retail, telecommunications, publishing, media, and entertainment.

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While there are hundreds, if not thousands, of ready-to-use DSPs on the market, it sometimes makes more business sense for a company to build their own custom DSP.

Although the advantages can be substantial, building a DSP demands significant time and financial investments that not every company may fully benefit from this undertaking. However, for certain businesses, developing their own proprietary DSP might be the only viable option to meet their specific needs.

Read this blog post to learn about the process of building a DSP.

What Is a Demand-Side Platform (DSP)?

A demand-side platform (DSP) is an advertising technology (AdTech) platform that enables advertisers and agencies to purchase ad space on an impression-by-impression basis from publishers via ad exchanges and supply-side platforms (SSPs). The inventory can be purchased in real time through a single-user interface. 

With a DSP, advertisers can buy:

• Display ads: These are banners and interactive ads that appear on websites and apps.
• Video ads: These include pre-roll, mid-roll, and post-roll video ads that play before, during, or after online video content.
• Native ads: These are ads that blend seamlessly with the form and function of the platform or website they appear on.
• Mobile ads: These are ads displayed on mobile devices.
• Audio ads: These are ads on audio streaming platforms, podcasts, and internet radio.
• Digital out-of-home (DOOH) ads: These are ads on digital billboards, which are screens in public spaces, transportation hubs, and shopping centers.
• Connected TV (CTV) ads: These are ads delivered through internet-connected smart TVs and streaming devices.
• In-game ads: These are ads placed within video games.

The primary function of a DSP is to purchase ad inventory. However, within the DSP, AdOps can create, run, and manage many ad campaigns simultaneously across multiple SSPs and ad exchanges, increase the ROI of their campaigns via optimization mechanisms, improve targeting by integrating the platform with other data platforms, and analyze the performance of their campaigns with reporting and analytics modules.

How Does a DSP Work?

Advertisers and ad agencies can create, launch, and manage multiple ad campaigns across a variety of supply sources through a single user interface. Most companies have a dedicated team, known as ad operations (AdOps), that is responsible for setting up and managing the ad campaigns inside a DSP. 

The mechanisms and components involved in buying ad impressions encompass real-time bidding (RTB) processes and integrations with SSPs and ad exchanges, as well as the use of bidders and algorithms to process data.

The following video explains the simplified process of creating an ad campaign and buying ad impressions using a DSP, ad exchanges, and an SSP:

Here’s a breakdown of the process in detail:

1. An advertiser establishes campaigns, including targeting criteria, and creatives (ads), within the DSP.
2. Ad exchanges and SSPs notify the DSP about available impressions.
3. The DSP analyzes data associated with the impression.
4. Based on the relevance to the buyer’s target audience, the DSP determines the value of the particular user who will see the ad.
5. The DSP places a bid on the impression, reflecting the maximum amount the advertiser is willing to pay to display their ad to this user.
6. The ad exchange or SSP collects bids from multiple DSPs and selects the highest bidder.
7. If the DSP wins the bid, the ad is served to the user’s device in real time.
8. The DSP continuously monitors and optimizes campaign performance, adjusting bids to maximize ad effectiveness and return on investment (ROI).
9. This process is repeated for each impression, allowing the DSP to reach and engage the desired audience efficiently.

The whole real-time bidding (RTB) process happens as the page is loading; it is completed in roughly 100 milliseconds.

Who Can Benefit From Building a DSP and How

While any company can build a DSP, the companies that have the most to gain are advertisers, ad agencies, and AdTech companies. Developing such a platform presents significant business opportunities, including revenue growth, increased market presence, and — additionally, for the AdTech companies — the ability to offer comprehensive solutions to advertisers.

Moreover, a custom DSP can:

• Help companies reduce the commissions they pay to intermediaries.
• Give companies full control over the product roadmap and ownership of the tech — i.e., codebase and intellectual property (IP).
• Provide companies with more control over their data and the media-buying process.

AdTech Companies

Building a DSP allows AdTech companies to tap into the growing programmatic advertising market. By offering a DSP, they can provide advertisers with a comprehensive platform to manage their ad campaigns, opening up new revenue streams through fees, commissions, and licensing models.

A custom DSP also gives AdTech companies full control over the technology and features offered to advertisers. They can tailor the platform to meet specific market demands, including unique targeting options, advanced optimization algorithms, and customized reporting and analytics capabilities.

Another advantage for independent AdTech companies that want to build their own DSP is the ability to develop strategic partnerships with specific SSPs, ad exchanges, DMPs, and verification partners. This allows them to expand their network, create a unique offer, and reach a broader customer base.

Advertisers and Ad Agencies

The main benefits for advertisers and ad agencies include enhanced control over their advertising campaigns, precise audience targeting, efficient and transparent costs, and increased competitive advantage.

In their case, the platform can be aligned with their unique objectives, preferences, and target audience. This level of control enables advertisers and ad agencies to make real-time adjustments, experiment with different strategies, and incorporate algorithms to optimize their campaigns for maximum effectiveness.

They can also use granular targeting options to reach the right audience at the right time, delivering personalized messages that resonate with their customers.

Regarding cost efficiency and transparency, developing a custom DSP eliminates the reliance on third-party platforms, reducing costs associated with platform fees and intermediaries.

And, finally, building a custom DSP positions advertisers and ad agencies as innovators and industry leaders. They differentiate themselves from competitors by offering unique targeting capabilities, customized features, and seamless integration with their existing technology stack.

Key Features of a Demand-Side Platform (DSP)

When developing a DSP, it’s essential to focus on the most important features of the platform, such as budgeting (aka, an ad banker), bidder, integrations, the user interface, the user profile database, the reporting module, the campaign tracker, and the ad server.

Optimization Features

Well-designed DSPs have modules to maintain ad campaigns, optimize ad targeting, and control spending. These are driven by algorithms and machine learning that analyze performance data, adjust bidding strategies, and allocate the budget toward the most effective placements and audiences, thus automatically optimizing campaigns.

• The campaign tracker is the component responsible for collecting data on campaign performance.
• Targeting options allow advertisers and ad agencies to reach their desired audience precisely based on demographics, location, behavior, interests, and device types.
• The ad banker is the module that prevents overspending. It helps manage and control an advertiser’s media spending during real-time bidding.

Integrations

To work correctly — i.e., access a wide range of ad inventory and data sources — a DSP has to be integrated with SSPs, ad exchanges, and DMPs. These integrations allow advertisers to tap into diverse inventory options, reach various publishers, and leverage insights about their desired audience for precise targeting and retargeting.

Analytics and Reporting

DSPs provide comprehensive analytics and reporting capabilities to monitor campaign performance. This can include reporting in real time and customizable dashboards that visualize all necessary or valuable data.

Main Challenges When Building a DSP

Building a DSP is a complex task that involves many different moving parts, each with their own challenges, such as managing technological complexity, integrating multiple features, and maintaining high-speed performance. Here, we address the most common challenges that we at Clearcode have overcome when building DSPs for our clients.

Maintaining High-Speed Performance and Dependability

The DSP must be reliable and perform well under heavy loads, especially during peak traffic times. Ensuring high performance and uptime requires robust architecture and efficient code, which can be challenging to design and implement. 

Using microservices, where each part of the DSP works independently from the others, or cloud-based architectures, which can easily scale up or down as needed, can often be the most suitable solution to these challenges.

Achieving Scalability

As the user base and data volume grow, the DSP should be able to scale accordingly to handle increased traffic and data processing. Designing a platform with scalability in mind will help ensure the DSP can handle an increase in usage.

Integrating with Other Platforms

To work properly, DSPs must integrate with various ad exchanges, supply-side platforms, and data management platforms. These integrations must be implemented correctly and tested thoroughly to ensure the DSP can respond to the bid requests within the required timeframe.

Optimal Ad Targeting

Implementing sophisticated algorithms for efficient ad targeting and delivering the right ads to the right users at the right time is a challenge. The platform must analyze user data, context, and behavior to make accurate predictions and decisions.

To process vast amounts of data in real time and predict user behavior, personalize ads, and optimize bidding strategies, a range of technologies can be utilized, including, for example, big data technologies, real-time processing systems, machine learning algorithms, AI, cloud technologies, databases, security technologies, and web technologies.

How Can You Design and Build a DSP?

Developing a demand-side platform is a complex process that involves several steps. Below are the phases that we follow at Clearcode to build DSPs, as well as other programmatic advertising software.

Discovery

First, we:

• Gain an understanding of what you want to achieve with your DSP and get a clear project vision. 
• Outline what you’ll need to get your DSP off the ground and identify any potential technical roadblocks related to real-time bidding, ad targeting, and processing large amounts of data. 
• Address possible technical limitations, like making sure your DSP can grow with your business, comply with data privacy laws, and make ad targeting as effective as possible.

Sprint 0

Next, we:

• Pinpoint any unknowns in the DSP project and brainstorm ways to solve them. 
• Choose the key features for the initial version of your DSP (the minimum viable product or MVP) and put together a to-do list (also known as a backlog) of user stories that define these features. 
• Find the best tech tools and design the best setup for efficiently buying ads, managing real-time bidding, and sorting your audience into groups. 
• Get started on the groundwork for your MVP or validate a specific part of the project with a proof of concept (PoC).

MVP Development

This is when we:

• Start bringing your DSP to life, including setting up the front-end and back-end development, getting the infrastructure in place, designing the user interface, and making sure everything works as it should with thorough testing. 
• Launch your MVP to a small group of users or stakeholders, usually made up of advertisers and marketing folks. 
• Get their feedback to help shape the next stage of development, focusing on things like user experience, how efficiently ads can be bought, and what kind of reporting features are needed. 
• Keep an eye on how the platform is performing, making sure everything runs smoothly and dealing with any unexpected problems that crop up.

Post-MVP Development and Maintenance

After the MVP, we:

• Keep working on your DSP in short, focused bursts (known as 2-week sprints) with the aim of adding new or better features each time, like more advanced targeting options or more detailed analytics. 
• Offer ongoing help and maintenance to make sure that the software and infrastructure stays up and running and that any problems are sorted out quickly. 
• If needed, we’ll hand the project over to your team, giving them the documentation and access they need to manage and maintain the DSP.

Examples of Clearcode-Built DSPs

Kanary NEST

Our client, Kanary NEST, partnered with us to build a scalable demand-side platform designed for programmatic media buying in the online display advertising industry.

The main challenges included developing a platform that could handle billions of bid requests and display the data in real time.

To deliver the platform, we blended several technical solutions and coupled them with a user-friendly interface and sharp design elements.

• We architected the system design with horizontal scalability in mind, empowering the platform to manage billions of bid requests daily, despite being built on a limited infrastructure.
• To deliver an ultra-fast platform, we used multiple software development solutions and tools, including Python, Twisted, Redis, Storm, and others.
• To provide marketers with access to the major biddable display advertising inventories, we integrated Kanary with AppNexus and ad exchanges supporting OpenRTB protocols, such as Nexage.

Starting from scratch, we constructed the project and introduced the minimum viable product (MVP) to a select group of beta testers. Their initial feedback guided our enhancements and the platform’s ongoing development. It was showcased at the TechCrunch Disrupt 2013 conference in New York, where it gained significant praise. Later, in August 2014, Kanary NEST was acquired by Gravity4 — an AdTech company based in Silicon Valley.

SITO Mobile

SITO Mobile, a mobile DSP that leverages location-based technology, engaged us to optimize their infrastructure, access a broader amount of inventory, and minimize discrepancies between their SSP partners.

The primary challenges involved gaining access to more extensive inventory and optimizing the infrastructure to increase the number daily impressions the DSP could process. 

Key points:

• We integrated the SITO Mobile DSP with various ad exchanges and SSPs, enhancing its capacity to handle bid requests per second, automating routine tasks, and improving report generation based on tracked events.
• We designed solutions to handle the discrepancies between the DSP and ad exchanges/SSPs by working directly with them to develop custom reporting mechanisms. This action drastically reduced the discrepancies from around 50% to 1%, thereby improving SITO Mobile’s media spend and positively affecting their bottom line.
• For improved platform stability and constant monitoring, we offered SITO Mobile a service-level agreement (SLA) that provided 24/7 monitoring. This resulted in immediate responses to performance issues, proactive avoidance of potential problems, and frequent infrastructure optimizations.

Our partnership with SITO Mobile profited from our vast experience in advertising-technology development, which enabled us to understand the specific needs of the project, engage proactively with other vendors, and recommend solutions based on our knowledge of the online advertising ecosystem.

Ad Banker Case Study

Clearcode developed a distributed budget management tool, referred to as “the ad banker”, specifically for real-time bidding. This tool aids tech firms in avoiding budget overspend and shortening the development timeline when constructing a demand-side platform (DSP). Our benchmark tests found that the ad banker can reduce budget overspending from 37.2% to just 1.2%.

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How We Built the SITO Mobile Demand-Side Platform (DSP) on AWS [case study]

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