What is an Ad Exchange?

Ad Exchanges can be defined as a digital marketplace where different advertisers and publishers come together to do the trading of digital ad inventories such as a display, native, video, mobile and in-app. The process of selling and buying happens in real-time auction that is empowered by RTB (Real-Time Bidding) technology. Ad exchanges are the driven auction mechanism and an autonomous platform that facilitates the programmatic ad buying.

Who uses Ad Exchanges?

Many players of the online advertising uses this Ad exchange such as different owners of websites, online magazines or blogs also known as Publishers use SSP in order to plug into the ad exchange to make their digital advertising space available for all kind of buyers. Independent marketers, ad agencies and ad networks are known as advertisers and they use DSP in order to connect with ad exchanges so that they can purchase different advertising spaces. Ad exchanges also sell ad spaces to Ad networks.

Benefits of an Ad Exchange for Publishers

The process of Programmatic ad buying Ad buying with the help of different software and algorithms helps publishers to get the best price for their ad space and advertisers to reach out various target audiences in the right time and in the right context.

  1. It sets the minimum CPMs for inventory units along with the filtering and blocking of ads that have sensitive content or other ads from the competitors.
  2. It allows the publishers to choose the location of ads where they want their ads on the website.
  3. By choosing ad formats and ad style it defines what types of ads would appear on the web page.
  4. It builds customized combinations of fonts, colors and other useful things and apply them to multiple types of display ads at a time.

Benefits of an Ad Exchange for Advertisers

All the advertisers gets benefits from the ad exchange with the useful ability to:

  1. Set their own budget and budget pacing options.
  2. Choose different targeting options.
  3. Change bidding capabilities
  4. Manipulate behavioral profiling.
  5. Change price settings.
  6. Backlist any website and audience.
  7. Put a limit on the number of times an ad appears to the same user.

Working of the Ad Exchanges

Publisher makes its inventory available on the different ad exchanges through SSP. The publisher then provides complete details of the inventory which includes URl, audience, page location and many other things.

When user enters any website ad impressions automatically appears on the auction. All the data about the user will be collected and send to the publisher’s server and after that it will be send to the ad Exchange. After getting the data the ad exchange will send a bid request to DSPs and ad networks. The DSP will inspect the bid request and after the inspection the platform will decide if the impression is useful to the advertisers.

Once the bidding is completed the ad exchange will review the advertisers who bid on the impression. The ad exchange will automatically eliminate the advertisers who do not meet the criteria.

The winning advertising copy will appear on the publisher’s website in front of the user. This whole process does not interfere with user experience and it does not decrease the page loading speed.

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