What is an ad exchange?
An online, real-time marketplace that enables advertisers and publishers to buy and sell digital advertising space across websites, mobile sites, and apps. The ads displayed in these spaces mostly include a native display, video, and mobile ads.
How do they work?
Programmatic advertising, which is an automated process to buy digital ad inventory within advertiser-defined criteria, powers the majority of ad exchanges. It delivers the most effective ads to campaign audiences based on a number of variables by utilizing machine learning algorithms and workflow automation.
To determine whether the space being offered is appropriate for their campaign, advertisers can connect to exchanges using demand-side platforms (DSPs) and utilize audience data. After that, they can make an instant bid and buy the space. This is usually done with Real Time Bidding (RTB), a form of programmatic advertising that functions as an auction. When an advertiser has the highest bid, their ad will appear on the publisher’s website or mobile app.
Why are ad exchanges important?
Ad exchanges provide:
- Full transparency (Advertisers are able to see transactions and cost changes)
- Inventory (Includes both premium inventories and additional unsold inventories)
- Users and Audiences (Works with advertisers, ad agencies, demand-side platforms (DSPs), and supply-side platforms (SSPs)