An ad exchange is a technology platform that facilitates the buying and selling of media advertising inventory from multiple ad networks. It is a digital marketplace that enables advertisers and publishers to buy and sell advertising space, often through real-time auctions. Ad exchanges are a key component of programmatic advertising, which uses an automated process to purchase digital ad inventory across the web, mobile, apps, video, and social media.
Here are some key features of ad exchanges:
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Real-time bidding (RTB): Prices for the inventory are determined through real-time bidding, which is a technology-driven approach as opposed to the historical approach of negotiating price on media inventory.
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Marketplace: An ad exchange is a virtual marketplace where publishers and advertisers connect to buy and sell digital ad space without the need for an intermediary.
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Supply-side platform (SSP): An ad exchange connects to supply-side platforms on the seller side, which are used by publishers to manage and sell their ad inventory.
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Demand-side platform (DSP): An ad exchange connects to demand-side platforms on the buyer side, which are used by advertisers to manage and buy ad inventory.
Ad exchanges are often compared to the trading floor of a stock market, while ad networks are compared to stockbrokers. While ad exchanges and ad networks are both programmatic software used during the buying and selling of digital ads, each serves a slightly different purpose. An ad exchange functions as a marketplace for publishers and advertisers to buy and sell digital inventory, while an ad network buys inventory from publishers and then sells it to advertisers as more of an intermediary.
