Which inventory cost model is most commonly used by a DSP?

The most commonly used inventory cost model by a Demand-Side Platform (DSP) is dynamic CPM (dCPM). This model allows advertisers to bid on ad impressions in real-time, taking into account various factors such as audience data, context, and competitive bids.

dCPM enhances the traditional CPM model by introducing dynamic pricing based on real-time factors, allowing for more effective allocation of budgets and optimization during the digital advertising campaign. This flexibility helps advertisers maximize their return on investment by adjusting bids based on performance metrics and audience targeting, rather than adhering to a static cost per thousand impressions.

In contrast, the traditional CPM model is a fixed price for every thousand ad impressions, which does not account for real-time bidding adjustments. Effective CPM (eCPM) serves as a way to calculate the profitability of campaigns across different pricing models but is not a bidding strategy on its own. Cost per acquisition (CPA) focuses on actions taken by users rather than impressions served, making it less relevant for a DSP's inventory cost model, which typically revolves around impression-based bidding.