An ad exchange is a marketplace for online advertising transactions between publishers and advertisers. They provide a platform for real-time bidding (RTB) on ad space.
These exchanges help publishers maximize the revenue they earn from their premium inventory through cost-per-mille (CPM) pricing models by making it available to the highest bidder. Advertisers benefit by getting access to a larger pool of potential inventory and being able to bid on it in real-time.
They are essentially the modern-day ad network. This guide will detail the major types of ad exchanges available today, as well as how they work and differ.
Ad Network vs. Ad Exchange
An ad network is a company that connects advertisers to websites that want to host advertisements. The ad network will typically take a cut of the ad revenue.
They sort inventory into specific categories and charge a CPM rate for each.
An ad exchange is a digital marketplace where inventory from multiple publishers is made available to advertisers in real-time. Advertisers can bid on this inventory through a process called programmatic buying or RTB.
Auctions always occur on an ad exchange to ensure that each advertiser has a fair chance to bid on the ad inventory. Publishers also use auctions when there is unsold inventory that an ad network cannot fill.
Publishers and advertisers can buy and sell inventory directly in an ad exchange, and it is based on market competition, not media inventory.
Ad networks used to be the primary way for advertisers to buy ad space. Ad exchanges have largely replaced ad networks because they are more efficient, transparent, and provide a better user experience.
Open vs. Private Exchanges
An open exchange is a digital marketplace available to sellers and buyers where inventory from multiple publishers is made available to advertisers in real-time. Advertisers can bid on this inventory in real-time.
Examples of open exchanges are Google Ad Exchange, Openx, Xandr, and Rubicon Project.
A private exchange is an invitation-only private marketplace (PMP) where inventory from a specific group of publishers is made available to a particular group of advertisers.
This makes the process more secure than open ad exchanges.
Ad Exchange vs. DSP & SSP
Since we understand what an ad exchange is and how it works, let us look at DSP and SSP. A demand-side platform (DSP) is a system that allows for the buying of ad impressions across multiple ad exchanges in real-time.
A supply-side platform (SSP) is a system that allows publishers to manage the sale of their ad impressions in real-time.
DSPs & SSPs work to identify which bidders qualify for a specific website. They provide data to ad exchanges that enable the buying and selling process through real-time auctions.
The difference between DSPs and SSPs is that advertisers use DSPs to buy inventory while publishers use SSPs to sell inventory. Both play a significant role in the programmatic ecosystem.
Google Ad Exchange
Google Ad Exchange was previously known as the DoubleClick Ad Exchange. It works by connecting advertisers with publishers who want to host advertisements. Advertisers can bid on ad space in real-time through Google’s interface.
Google Ad Exchange offers RTB, private auctions, and preferred deals to advertisers and publishers looking to buy and sell advertising space. To be eligible, one has to have a Google Ad Manager account and have access to AdX, either directly or via a Google partner.
Another eligibility criterion is that the site or app should have high-quality content and follow Google’s ad policies.
Google Adsense is an ad network that connects advertisers to websites that want to host advertisements. The ad network will typically take a cut of the ad revenue. They sort inventory into specific categories and charge a CPM rate for each.
Google Adsense is great for new sites with lower traffic, whereas Google AdX is excellent for more established sites with stronger traffic.
Index Exchange
Index Exchanges targets media owners, platforms, and publishers looking for header bidding solutions. For these types of companies, Index Exchange provides a wrapper that publishers can place on their site to manage all of the header bidding tags.
This makes it easier for publishers to control header bidding and avoid potential latency issues. Examples of Index Exchange partners are Yahoo, Gemini, The Washington Post, and AOL.
The most significant benefit of Index Exchange is its full transparency toward its clients. It uses data analytics to give clients a better understanding of how their display ads and video ads perform and what they need to improve.
They also track header bidding tags to ensure they are working correctly and are not causing any problems.
Index Exchange also adheres to the latest online advertising standards of the Coalition for better ads. They stand for high-quality creatives.
Magnite (Ex-Rubicon Project)
The Rubicon Project changed its name to Magnite in 2020. They transformed their business from being a supply-side platform (SSP) to a programmatic ad exchange. Magnite has an incredible optimization technology to help you increase your ad revenue. It is a global technology company that provides solutions to publishers and advertisers.
They have a self-service platform where media buyers can access publisher inventory in an open and transparent marketplace. They also have a private marketplace with the highest CPM on their inventory for premium publishers and select advertisers.
Some of the notable companies that use Magnate are eBay and the Wall Street Journal. Magnite offers advanced header bidding options for both publishers and advertisers. Their technology helps improve the yield for publishers and provides a better buying experience for advertisers.
Xandr (Ex-AppNexus)
Xandr is a programmatic ad exchange and supply-side platform (SSP) that AT&T created. Microsoft later acquired them to accelerate the delivery of digital programmatic advertising and retail media solutions.
Xandr increases ad yield by helping you understand the value of your inventory and optimize it to maximize revenue. You can calculate value by taking into account your ads’ cost CPM, cost per click (CPC), and click-through rate (CTR).
The best way to increase your ad yield is by using Xandr’s header bidding technology. The Xandr Header Bidding Wrapper is a container tag that allows publishers to run multiple header bidding adapters in parallel. Their wrapper is designed to minimize latency and maximize yield.
Xandr also offers other ad types such as banner, video, native and audio. Xandr has done a great job in streamlining their services. The businesses who have trusted them are proof of that. For example, AMC Networks, Disney, and WarnerMedia work with Xandr to maximize the experience of their consumers.
Their header bidding wrapper and advanced analytics help publishers increase their ad impressions and revenue. They also have a robust set of features for advertisers, including audience targeting and brand safety controls.
PubMatic
PubMatic is a global technology company that provides software and monetization services to help you buy and sell digital advertising. They are a data management platform (DMP) ad exchange with a self-service platform where media buyers can access publisher inventory in an open and transparent marketplace.
They also have a private marketplace with the highest CPM on their inventory for premium publishers and select advertisers.
PubMatic is one of the largest ad exchanges in the market and has more than 170 billion ad impressions monthly. They have a real-time bidding platform that helps publishers increase their ad revenue. PubMatic has been known to improve a publisher’s ad quality and fill rate.
Digital media ad fraud is a severe problem in the online advertising industry. Ad fraud occurs when someone artificially inflates ad impressions, clicks or conversions by using automated bots or clicking on ads themselves. PubMatic protects against ad fraud by monitoring suspicious activity and working with partners to combat it.
Verizon Media
Verizon is an industry giant in both the media and technology sectors. There are a lot of publishers using Verizon’s ad exchange, making it one of the largest ad exchanges in the advertising industry.
There are also advanced monetization methods available across the company’s multiple devices and ad formats. Verizon also offers a self-service platform where media buyers can access publisher inventory in an open and transparent marketplace.
They even have a private marketplace. Some critical features offered by Verizon’s ad exchange are pre-bidding solutions, inventory management tools, and programmatic direct selling.
Verizon’s ad tech is designed to help you grow your business by reaching the right people with the proper message across all devices.
They have a robust set of high-quality ad products, including video and native advertising, header bidding and display.
Smaato
Smaato is a digital ad tech platform that offers monetization solutions and a free ad server. They specialize in the monetization of mobile apps. The great thing is that the platform offers omnichannel advertising and self-serve solution.
Smaato also has multiple ad fraud protection features, so publishers and advertisers will not lose out on revenue due to invalid traffic.
Their ad fraud protection features include:
- Protecting against invalid traffic
- Blocking bots and automated systems
- Detecting fraudulent activity in real-time
SmartyAds
SmartyAds is a white-label ad exchange that helps publishers and advertisers buy and sell digital advertising. Smarty Ads creates solutions for digital advertisers, publishers and ad networks by giving them the ability to reach their targeted audiences with high-quality ad products.
The SmartyAds platform offers a wide range of ad products, including video, native, display and rich media. Real-time bidding is their primary focus to provide publishers and advertisers with the most efficient way to buy and sell ad inventory.
Their key targeting options are video advertising, mobile advertising, native advertising, header bidding and programmatic direct selling. SmartyAds also has a self-service platform and private marketplace for publishers and buyers.
MoPub
MoPub uses its mobile ad exchange to give mobile app publishers and developers monetization solutions to make money from their app. They are one of the leading mobile ad exchanges and have been known to improve fill rates and eCPMs.
Their RTB exchange, ad network, ad server and mediation make the process of clients meeting their goals easy.
It is worth mentioning that MoPub already works with big companies such as Zynga and Ubisoft.
The key targeting options for MoPub are mobile video ads, video advertising, native advertising, header bidding and programmatic direct selling.
OpenX
OpenX is a programmatic advertising company and ad-serving platform. Their platform allows for easy inventory management, geo-targeting of ads by country and provides statistics for each video advertisement placement.
It uses advanced integration technology to combine real-time bidding with various video ad networks and SSPs. OpenX’s best targeting options feature is ad forecasting and optimization.
The types of businesses and publishers that most often use OpenX are websites, mobile apps, and video publishers.
Wrap Up
These major ad exchanges give you the ability to buy and sell ad inventory. Each has its own strengths and unique functionalities, so it is essential to choose the right one depending on your needs.
These ad exchanges give you simple monetization options to increase your ad revenue. If you have any questions or want to learn more, feel free to contact us.
