How Publishers & Advertisers Benefit From Ad Exchange?
People who own online magazines, websites, or blogs are known as Publishers in the digital platform parlance. They use an SSP or supply-side platform that connects to the Ad exchange. On this platform, they offer digital advertising space to buyers interested in displaying their ads.
On the other hand, individual marketers and Ad Networks, known as Advertisers, use the DSP or the demand side supply to connect to ad exchange and help to purchase advertising space offered by the publishers. There is another option available where Ad Networks buys advertising spaces from Ad Exchanges on their account and later sells to clients looking for display at a profit.
Another player in this digital ad market is known as the Agency Trading Desk (ATD). They own multiple DSP and gives their clients multiple options to buy different programmed ads from the publishers. They are, in a way, a broker of sorts providing multiple products under one roof. In addition to the large wholesale ads buy-out services, the ATD also provides other retail services such as advertising campaign management and analytic data services.
Functions of Ad Exchange
An Ad exchange allows the publisher to provide all the details such as URL, page location, topics, audience, etc. When a user enters the website of the publisher, an Ad impression is created automatically. The users’ data is collected and sent to the publisher’s server, from where it gets transferred to the ad exchange.
The Ad Exchange then sends the requests to ad networks and DSPs.
The ad exchange platform reviews the impression bid and checks whether it is of interest to the publisher. If yes, then the DSP sends the reply to the ad exchange with the maximum bid and the location on where the advertising space is required.
The Ad exchange thus monitors and regulates the advertisers and publishers and sees that their requirements are matched. For example, a slot available on a Chinese website is only meant for advertisements in the Chinese language.
In this scenario, the Ad exchange will reject all non-Chinese advertisements bid.
Why is Ad Exchange required on the Digital platform?
This platform allows an efficient advertising mechanism using technology. The automated buying and selling of ads use software and algorithms, also known as programmatic advertising. They enable publishers to get the best price for the ad space by reaching out to advertisers at the right time. Apart from automation and algorithms, there is also an option for a real-time marketplace where buying and selling ads occur. This is known as the Google ad exchange or previously known as the DoubleClick ad exchange. Others like Facebook ad exchange also offer real-time bidding on ad spaces available on Ad network and AdSense.
The advantage of using Ad exchange is that it helps publishers exercise various control over what kind of Ads can be allowed, filtered, or even blocked for sensitive content from competitors. In addition, the Ad exchange determines the different types of ad formats, types of fonts, colors, and location of ads. Finally, ad exchange allows advertisers to set budgets and bidding capacities and sets prices accordingly.