Glossary term

Ad Exchange

What is an ad exchange? An ad exchange is a real-time online marketplace where advertisers and publishers can buy and sell advertising space and impressions. The majority of ads sold on exchanges include display, video, and native across both mobile and desktop platforms.

How do ad exchanges work? Most ad exchanges function programmatically (or automatically), allowing companies to automate much of their advertising buys. Exchanges let ad networks and others directly purchase ad impressions , which occur whenever a user reaches a page on a website or app that is marked as ad space.

Advertisers can connect to exchanges using demand side platforms (DSP) and utilize audience data to determine whether the space is relevant for their campaign. They can then purchase the space in real-time and bid on it instantly. These decisions can be made manually, or in many cases, automatically by algorithms that scan demographic and user data to find the best value for advertiser spend.

Who uses ad exchanges? Agencies - Brands work with agencies to design and build ad campaigns that effectively achieve their marketing objectives. They frequently assist in facilitating ad-distribution and getting campaigns added to the start of the programmatic chain.

Brands or Games - Many brands and games have in-house programmatic buying teams that work directly with DSPs.

DSPs - Demand-side platforms are programmatic platforms that help agencies and brands efficiently buy supply. They are the “bidders” in the auction. They have sophisticated algorithms to decide what to pay and when to bid for supply that meets the requirements of a campaign.

SSPs - Supply-side platforms are specialized networks that focus on aggregating digital inventory and are traditionally responsible for holding programmatic auctions.