Is it worth investing in a managed DSP?

This article was inspired by a recent podcast episode with Alexa Wieczorek, Growth Marketing Manager at Electronic Arts (EA). With over 450 million players around the world, EA is a leading developer and publisher of console, PC, and mobile games.

You can listen to episode 106 of the Apptivate podcast through this link.

When it comes to performance marketing and growing an app’s customer base, mobile marketers have many options that range from offline marketing to CRM and beyond. For paid digital campaigns, many opt for the self-service route with established providers such as Facebook or Google. On the other hand, many have also benefited from investing in programmatic marketing by working with managed Demand Side Platforms (DSPs).

We’re diving into the reality of working with a managed DSP and will be sharing key points that one should look out for when it comes to vetting different partners. We’re also adding advice from EA’s Growth Marketing Manager, Alexa Wieczorek, on when it makes sense to consider investing in a DSP.

Managed DSPs came to the market to provide growth marketers with a solution to reach and reactivate customers at scale. DSPs allow advertisers to purchase ad inventory across programmatic ad networks. The platforms are built to place bids on the advertisers' behalf to identify, win the desired ad inventory, and optimize on real-time bidding (RTB) spending.

According to Alexa W., the lead of establishing programmatic marketing at EA, the smaller (DSP) names are not as well-known as companies like Google or Facebook. Many marketers start with self-attributing networks as it “comes down to a lack of understanding and resourcing”. She also adds that “DSPs can take 1-2 months or more to ramp up, especially if it's in-house where you develop your own bidding algorithm.”

While DSPs can provide greater services than their self-service counterparts, the learning curve is generally longer and steeper. The reason for this is that DSPs provide more data points for optimising campaigns, which means marketers have to be more hands-on in order to extract insights.

Is the investment worth it? A managed service that provides marketing at scale and possesses a repertoire of app marketing clients will have the expertise to sift through immense amounts of data. On top of this, they can apply their knowledge from previous experiences running campaigns for similar clients (so long as they do it in a privacy-safe way).

Transparency and trust are crucial as marketers will have no control over the inventory they’re buying on things like the Facebook feed or Instagram stories.

Marketers will benefit from more granular information when working with a managed DSP, such as device ID. Third-party providers can provide insights on bid requests, publisher data, and device types; this level of information enables them to filter and test far beyond what’s available on services like Google. For example, filtering campaign performance from the get-go helps marketers pinpoint where users drop off. All in all, mobile advertisers will have more data to work with, which is vital for revenue prediction and for understanding what their users might look like.

Not all DSPs are created equal though. Some DSPs would prefer a more hands-off approach with their clients, while others are willing to share information and strategies down to the last detail.

It’s clear that DSPs have a lot of value to offer. When checking different websites, there’s a trend in terminologies such as scale, machine learning, algorithms, and more. While they aren’t empty buzzwords, it requires careful analysis on the different nuances that each DSP has to offer.

If marketers choose a self-service DSP, they will still require at least half a year to get the algorithmic model to produce a positive ROAS, whereas a managed DSP can handle more data points and yield results much quicker.

Alexa shares that she’s experienced plenty of successes and failures. She also mentions that most major DSPs plug into the same inventory. So when it comes to vetting the right partner, she advises other mobile marketers to have a look at the business model and what the DSP can actually offer. For example, creative services are a huge plus, especially for companies that don’t have a lot of internal resources. Managed DSPs that offer creative support can build ads for their clients and use them in combination with their inventory and ad operation services.

If a managed DSP pushes back on applying a master blocklist of publishers, take it as a bad sign. How the DSP purchases traffic also matters when looking at click quality. At the end of the day, the incrementality of your mobile marketing campaigns proves the added value of your campaigns, so the service should be open to sharing information that can ensure that you’re not running ads on users that would have converted anyway.