What is an Ad Exchange?

Ad exchanges are special digital platforms where publishers and advertisers find each other to trade display, native and video ads with the help of real-time bidding technology.

Ad exchange users

If you are a website, online magazine or blog owner you can become a publisher, so-called SSP (supply-side platform), to make your digital marketplace available for advertisement and monetize your online resource. As an independent marketer, ad agency and ad network, you can become an advertiser or a DSP (demand-side platform). This will allow you to get connected to publishers to post your advertisement. Agency Trading Desk (ATDs) would use as exchanges to purchase large advertising inventories and then sell them to individual advertisers.

Why to choose ad exchanges?

As a publisher and as an advertiser you gain huge benefits when using ad exchange platforms.

As a publisher you will be getting access to various control mechanisms:

  • You can choose the location of your ads on the website page
  • You can choose ad formats and style to regulate the types of ad that will appear on your page
  • It allows you to set a minimum CPMs for inventory units
  • You can set your own combinations of fonts and colors and apply them to multiple display ads

As an advertiser you will have these advantages:

  • You can blacklist sites and people you don’t like/need for some reason
  • You can retarget across multiple ad exchanges
  • You can set all the bidding, targeting and price options depending on your budget
  • Or you can even set a limit on the number of times the same ads appears to the same user
  RTB ad server

Ads exchange process

  • Publishers register on Ad exchange platform, listing full details on the inventory, and give access to the advertising inventories to platform users.
  • All the data collected about the publisher’s website’s users is collected and transferred to the ad exchange.
  • The ad exchange then sends a bid request to all possible advertisers – DSPs and Ad Networks. They examine the offer, analyzing all the related information such as demographics, user ID, frequency capping and other targeting options). If the platforms decide that this ad inventory is interesting to the advertiser, DSPs send a reply to the Ad exchange with the maximum bid amount.
  • The ad exchange then examines the incoming bids and eliminates the ones that don’t meet publishers’ criteria.
  • Ad exchange sells the impression to the highest bidder.
  • This whole process takes no more than a few milliseconds, just enough time for the web page to load, so the user is not aware of the RTB process when the winning advertising copy appears in front of them.

There are different types of ad exchanges – open ad exchange/public marketplace/open auction offers a broad list of publishers but limits the information about them to the buyers. Private Ad Exchange/Private Marketplace allows publishers to control all bidding details. Preferred Deal gives publishers an opportunity to sell digital ad inventory at a fixed price for preferred advertisers.


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