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WHAT IS AD EXCHANGE?

Updated 8 months ago • 2 min to read

WHAT IS AD EXCHANGE?

Аd Exchange is a digital platform where publishers and advertisers exchange their advertising inventories on a real-time basis by selling and buying ad slots. In other words, it is a mediator platform for the supply and demand sides. On Ad Exchange, marketers and agencies can buy placement for any ad type – videos, banners, audio ads, etc.

 

Which platforms does Аd Exchange work with?

Аd Exchange is a sort of bridge between numerous DSPs and SSPs. DSP (Demand Side Platform) is a technological platform representing the buyers’ interests that stores information about advertising campaigns and their rates and settings. The technology is used as a tool that helps the users that most closely meet the advertisers’ requirements purchase ad showings at a lower price.

 

How does Аd Exchange work?

The exchange follows this algorithm:

  1. Publishers add their mobile apps or websites to an SSP, which makes their inventories available at Ad Exchange;
  2. Users visit the publisher’s website or mobile app and the ad showing automatically becomes available at the auction. Users’ data are collected, forwarded to the publisher’s server, and later sent to Ad Exchange;
  3. Ad Exchange sends a bid request to the DSP. Each DSP is going to check the bid request and affiliated information (targeting parameters). After the verification, the platform decides whether the showing is of any interest to the advertiser. If so, DSP sends a reply to Ad Exchange stating the maximum bid amount and the location of an advert copy that has to be placed at the available ad slot;
  4. Ad Exchange checks all the bidding advertisers. The platform removes the advertisers that do not meet the publisher’s requirements;
  5. Having collected all the information, Ad Exchange analyses the bids ad sells the showing to the buyer offering the highest price;
  6. The ad is shown to the target audience.

The whole process takes a fraction of a second, which is why it does not interfere with the website or mobile app operation.

 

What are the advantages of working with Аd Exchange?

Ad Exchange advantages for publishers:

  • Freedom to choose partners and ad formats;
  • Elimination of unreliable advertisers;
  • Maximum possible income from inventory sales at competitive prices;
  • Possibility to set the minimum bid to sell your inventory;
  • Choice of ad display location to prevent any user experience interference and optimize interaction. 

 

Ad Exchange advantages for advertisers:

  • Great choice of platforms to show your ads;
  • Full control over advertising campaigns;
  • Advertising budget optimization – precise targeting helps you spend the money in the most efficient way.

 

What kinds of Аd Exchange platforms are there?

These platforms can be of three types:

  1. Open exchange offering open auctions for all advertisers;
  2. Private platforms – PMP (programmatic media-buying method). These are exclusive exchanges that offer access to top publishers who, in turn, set their rates and requirements for inventory sales;
  3. Preferred exchange platforms where publishers can sell their ad space to preferred advertisers at fixed prices. These help publishers monetize their inventories most efficiently, whereas advertisers take advantage of price stability. 

 

Аd Exchange is a handy tool to sell your inventory and buy ad space, which is beneficial to both advertisers and publishers. The bidding process is fast and allows mobile app and site owners to sell any inventory.

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