What is an Ad Exchange
Ad exchanges are a way for advertisers to buy and sell ads from digital publishers through a single platform. The exchange uses demand-side technology to match the highest-paying ad inventory with the highest-value advertisers, resulting in more revenue for digital publishers and better ROI for advertisers.
- What is an ad exchange?
- Difference between ad exchanges and ad networks
- Importance and benefits of ad exchanges for advertisers and publishers
- Who uses an ad exchange?
- How do ad exchanges work
- Types of Ad exchanges
- Why do you need ad exchanges
- How to make the most out of Ad Exchanges with Spiny
Ad Exchanges Explained An ad exchange is a digital marketplace that allows advertisers and publishers to buy and sell digital advertising inventory.
While an ad exchange may be used by an individual advertiser or publisher, it is typically a platform that connects advertisers and publishers to facilitate the buying and selling of digital advertising inventory. A user can submit a request for an audience on their website, which will then determine if there are any available spaces for ads to be displayed in that particular area. Once this is determined, they will receive a quote from the publisher's network(s), which includes how much it costs to place an ad based on various factors such as location and time of day (viewable impressions). They use demand-side technology to match the highest-paying ad inventory with the highest-value advertisers, resulting in more revenue for publishers and better ROI for advertisers. Ad exchanges differ from ad networks in that they are typically used by both publishers and advertisers who want to buy or sell ads through an intermediary system, rather than doing business directly with each other. The user can then purchase these advertisements using their preferred payment method (e.g. credit card).
Difference between ad exchanges and ad networks
Advertisers, digital publishers, and ad networks all use ad exchanges to buy and sell ads. Ad exchanges work by setting up real-time auctions for ad space and allowing advertisers to bid on it. The winning bidder's ad is then displayed on the publisher's website. Ad exchanges can be classified as either general or specialized, with the latter focusing on specific types of advertising such as mobile or video. Ad exchanges can be accessed through Google Ad Manager, a supply-side platform (SSP), or an ad server.
Ad networks are typically used by publishers (such as websites) that want to sell their own advertising space directly to advertisers. Ad exchanges are used by both publishers and advertisers who want to buy or sell ads through an intermediary system instead of doing business directly with each other.
Importance and benefits of ad exchanges for advertisers and publishers Ad exchanges are used by both advertisers and publishers. They allow advertisers to buy ad space at the best price, while also allowing publishers to sell their unsold inventory to advertisers at good prices. Ad exchanges are automated systems that work as a platform where an advertiser can buy ads based on targeting and optimization criteria. Advertisers and publishers gain control over their ads and costs, as well as target audiences better than ever before.
Who uses an ad exchange? There are several types of companies that use ad exchanges to buy and sell ads. The most common are:
Advertisers (brands): These entities use the exchange to sell their products and services to consumers. They have a message they want to get across, and they can do so via display advertising or other digital marketing channels.
Digital Publishers (websites): These entities run websites with content for users, and they can earn revenue from ads displayed on them by using an ad exchange. They work with the advertiser in order to monetize their traffic—but not always directly: sometimes publishers allow advertisers access only through intermediaries like Ad Networks or Demand-Side Platforms (DSPs).
Ad networks: Digital media companies whose business model is based on selling inventory from multiple sources at once in order to maximize profits for all parties involved. In this case, “all parties” includes both publishers who sell their inventory via ad networks as well as advertisers who purchase ads through those same agency-like platforms instead of directly from each website where those ads will be displayed.
How do ad exchanges work Ad exchanges are a type of real-time bidding system that allows advertisers to bid on advertising space in real time. They work by setting up an auction for ad space, and then they match the highest bidder with the lowest available inventory at any given moment.
Ad exchanges work by setting up an auction for ad space, and then they match the highest bidder with the lowest available inventory at any given moment—think of them as a stock exchange for ad buying, but instead of stocks you’re buying impressions (or units). For example, if you have 100 ads you want to buy online, you can use an ad exchange to find all those ads within milliseconds (instead of going through each network yourself). And because there are so many publishers out there who don't always know where their own unsold inventory resides (and need buyers), these exchanges make it easy for everyone involved in this process to get what they need—which means higher profits all around!
Types of Ad exchanges The term “ad exchange” is used to describe a number of different types of systems. Here are the main types:
Real-time bidding (RTB): This is the most common type of ad exchange and is used by many publishers and advertisers. In this model, advertisers bid for specific slots on your page in real time, with the highest bids taking priority.
Programmatic advertising: also called automated buying, programmatic selling or programmatic media buying. It involves automated software that selects the audience segments and makes decisions about which ad formats should be displayed where (including when they're placed on mobile devices). It's often based on website cookies or other tracking methods that let advertisers reach people who've visited their site previously or signed up for an email newsletter in order to target ads at them specifically while they browse other websites online through an intermediary such as Google AdWords or Facebook Audience Network
Programmatic direct: also called programmatic guaranteed, it’s a more manual approach to buying and selling online advertising. It allows advertisers to directly negotiate with publishers for the best available rates on certain inventory types (such as banner ads or mobile app installs). They'll use data about their audience such as age range, gender and location in order to find the most effective type of ad format.
Why do you need ad exchanges As a publisher, you want to make sure that your inventory is being sold at the right price. As an advertiser, you want to ensure that your ad space is being used by legitimate users and not fraudsters. With the help of an ad exchange, both parties can meet their goals in real time! Ad exchanges help publishers and advertisers to connect with each other in real time by providing a platform where:
- Publishers can sell their ad inventory programmatically
- Advertisers can buy premium media at scale without having to worry about fraud or transparency issues
How to make the most out of Ad Exchanges with Spiny
- Spiny’s Bidroll is an Ad-tech solution that improves yield and ROI for publishers.
- Its automatic price flooring feature helps you to increase your profits and make the most out of ad exchanges. With Bidroll, you can also automate your ad server demand sources by applying specific rules based on publisher performance metrics or audience segments (age, gender, location etc.).
- Digital Publishers have full control over their inventory — they decide which auctions are used for each impression and how much they are willing to pay for them. As no private marketplace is involved in this process, users don't have to worry about being forced into a corner with certain buyers.
- BidRoll also utilizes advanced Ad Tech to make Digital Publishers ads as efficient as possible, through the propeitarty tech Publishers have seen increases that, in some instances, have more than doubled ad revenue on the site.
- Click here how Spiny has helped Sports Digital Publisher On3
These are just a few of the many features that BidRoll has. BidRoll is a unique product as through Spiny content intelligence and real time insights can be combined with the Ads product, creating results that can’t be found anywhere else. Therefore, looking into BidRoll for Digital Publishers is something we highly advise.
Conclusion The ad exchange market is growing at a rapid pace, with the total number of active ad exchanges and networks expected to reach 1,500 by 2024. The more competition there is in this space, the better for advertisers. If you’re looking to make the most out of your advertising budget by reaching your target audience, then check out our website today!