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Ad Exchange definition


Exchange (© Farknot Architect / Fotolia.com)

Exchange (© Farknot Architect / Fotolia.com)

An ad exchange is a relatively new concept in marketing and advertising. However, it has become one of the most popular methods of marketing and advertising because of how effective it is. Even some of the largest companies out there are now doing ad exchanges. In this article, we will explore the concept and use of the ad exchange, as it relates to marketing.

The Ad Exchange

An ad exchange, simply put, is an online marketplace that connects advertisers and publishers. Often, the ad space that is available is sold through the exchange in an auction format. The bulk of advertising that happens over an ad exchange is display ads, such as banners on websites, video advertising and mobile advertising.

Almost anyone can buy from an ad exchange, depending upon the policies of that particular exchange. Advertisers will either use third-party bidding applications or their own auction programs to facilitate the exchange, and the customers include individual companies, advertising networks, advertising agencies and more.

Why the Ad Exchange Works

In order to understand how the ad exchange works, you must first understand why the ad exchange works. There are two reasons that advertising companies and publishers tend to like the ad exchange. The first is the fact that clients can bid on premium spaces. This means that sometimes these spaces make more money than they would have normally.

Of course, the opposite is also true. Sometimes, people end up paying less than what the advertising space is worth because of the auction format. But there is one thing to keep in mind, and it might be the most compelling reason to use an ad exchange; if you have advertising space that doesn’t get sold, then you make nothing. It’s just wasted space that is costing you money; so, much like airlines and hotels, advertising publishers are often willing to accept less money for advertising space if it means that the space will be sold.

How the Ad Exchange Works

So, how does the ad exchange work exactly? Basically, an ad exchange is a giant pot of ad impressions. An ad impression is a single viewer looking at an ad. Buyers choose which impressions they want and then use demand-side technologies to bid for them.

The ad exchange isn’t just good news for those selling advertising space; it is also really good news for those buying ads. Using an ad exchange, advertisers can bid on advertising from a great many sites at once instead of setting up an account and negotiating a price with each individual website.

Ad exchanges are similar to ad networks, but in the case of an ad network, they typically mark up the price of the advertising because they have aggregated the publishers into one place and consider that their fee. An ad exchange is better for advertisers because they are able to see exactly what price they are getting. Sometimes, even ad networks buy advertising space from the ad exchanges and then sell them to make a profit.


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German

Press releases

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