If you’re a publisher looking for more information on ad exchanges, you’ve come to the right place.
Ad exchanges are an essential part of the digital advertising ecosystem, so it goes without saying that it’s important for you to know what they are and which ones are the best.
So buckle up and get ready – we’re about to do a deep dive into the world of ad exchanges.
What is an Ad Exchange?
An ad exchange is a digital marketplace that facilitates the buying and selling of advertising space in real-time. The exchange connects advertisers with publishers, allowing them to buy and sell ad inventory without the need for an intermediary.
The auction-like process involves advertisers bidding for ad space, with the highest bidder being selected by the publisher.
The whole process is incredibly swift and automated, occurring in a fraction of a second.
The most popular ad exchange in the world is Google AdX, Google’s premium ad exchange.
How Do Ad Exchanges Work?
When a user visits a website that has available ad inventory, two things happen simultaneously with the publisher and the advertiser.
On the publisher’s side, the ad exchange records the publisher’s inventory through a supply-side platform (SSP), which collects all the relevant information needed to best serve the ads. Once the ad exchange has all of this information, it decides who are the most relevant bidders.
The advertiser connects to the ad exchange via a demand-side platform (DSP) and sets how much it’s maximum bid per ad slot is. Based on this, the ad exchange holds an auction to decide which advertiser wins the bid.
Although there are many moving parts, this whole process happens within a blink of an eye.
Ad Exchanges vs Ad Networks
As we mentioned earlier, ad exchanges are digital marketplaces that allow advertisers and publishers to buy and sell ad space in real-time.
Ad networks, on the other hand, are companies that connect advertisers with publishers. They act as intermediaries and work on fixed pricing set by the advertisers.
Ad networks, like Google AdSense, benefit the advertiser because they offer publishers less control.
It’s more of “you take what you get” approach.
That’s why for publishers, ad exchanges are the way to go. You can check out more information about ad exchanges vs ad networks.
Benefits of Ad Exchanges
Overall Increased Revenue
Ad exchanges allow publishers to sell their inventory to the highest bidder, resulting in increased revenue. The real-time bidding process ensures that inventory is sold at its true value, enabling publishers to maximize their earnings.
Access to More Demand Partners
Through header bidding, ad exchanges offer publishers access to a large pool of demand partners, increasing the chances of finding a high-priced bidder for your inventory.
More Control Over Ads
Ad exchanges give publishers complete control over the ads that appear on their site. You can choose the ad units you want, when, and how the ads are served. This helps improve viewability and increase RPM.
Cost Flexibility
Ad exchanges allow publishers to choose a minimum CPM (cost-per-mille, or thousand impressions), meaning you won’t be getting the short end of the stick.
Better Ad Quality
Ad exchanges enable publishers to filter and block ads. This means you have much better control over the quality of ads displayed on your site.
Advanced Targeting
Ad exchanges allow publishers to better target the users. This makes your ad inventory more valuable to users and increases the cost.
Types of Ad Exchanges
There are three types of ad exchanges that we need to discuss:
- Open Ad Exchanges
- Private Ad Exchanges
- Preferred Ad Exchanges
Open Ad Exchanges
Open ad exchanges are accessible to all publishers and advertisers. They provide a wide range of inventory for advertisers to bid on, which is why they are the most widely-used ad exchanges.
Open ad exchanges cater more to publishers as the advertisers don’t have access to such detailed information about the publisher from whom they are buying ad inventory.
Private Ad Exchanges
Private ad exchanges, also known as private marketplaces, are an invite-only platform accessible only to top-tier publishers.
The reason that only premium publishers can run private ad exchanges is because the exchanges are operated by the publishers themselves, who invite advertisers and can pick and choose which advertisers they want to invite.
Private exchanges only work for very large publishers because there need to be enough quality advertisers interested in your ad space for the private exchange to work.
Private exchanges offer high-quality inventory, and the bidding process is restricted to a select group of advertisers.
Preferred Ad Exchanges
A preferred ad exchange, known also as preferred deal, is a more customized platform that enables publishers to sell their ad inventory at a fixed price.
Both advertisers and publishers benefit from this because they know exactly how much they are paying/getting paid.
Best Ad Exchanges for Publishers
- Google AdX
- Amazon
- Magnite
- OpenX
- AppNexus
How to Choose the Best Ad Exchange
Choosing between the best ad exchange can be tricky, but it’s easier than you might think.
If the ad exchange is also a demand partner, such as Amazon and Rubicon, you can use header bidding to access all of the best demand partners simultaneously and increase competition over your ad space. To achieve even better results, you can implement hybrid header bidding which utilizes both client-side and server-to-server methods of header bidding.
Interested in learning more? Feel free to get in touch with our monetization experts today to learn how you can get the most out of your ad revenue.
