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What is an Ad Exchange In the World of Programmatic?













Think of a stock exchange and that gives you an idea of what an ad exchange does. The world of online digital ads has publisher sites on the one hand with inventory on offer and, on the other, there are ad agencies and advertisers looking for the best sites on which to place their ads. Ad Exchange is the platform where all they all come together and the exchange conducts real-time bidding based on parameters as set by the publishers and as set by advertisers/ad agencies.

Types of ad exchanges

An ad exchange can be open type, a preferred deal type or a private ad exchange.

Open exchange: Open exchanges exhibit the largest volumes of trades and transactions with an estimated 70 billion impressions being facilitated. Any publisher or advertiser can join the open exchange. One has to be extra careful while transacting business on open exchanges.

Private ad exchange: Private exchanges are closed platforms where only private auctions are conducted. Publishers have full control overlaying out terms and conditions and deciding who to accept. Quality is superior despite publisher dominance.

Preferred deal: This again is oriented towards publishers, giving them the power to sell ad space only to selected advertisers after negotiations.

How ad exchanges work

In the simplest terms one can explain it this way:
  • The ad exchange works along with DSP and SSP linked to the real-time bidding technology. Publishers list available inventory and set minimum expected price while the real-time bidding auction process may get them a higher price demanding on demand-supply position. The platform selects advertisers based on cookie information. 
  • Advertisers select models of payment set out criteria such as user ID, demographics, frequency capping, and others. If a publisher site matches these requirements the advertiser is linked to the RTB process through the ad exchange. 
  • If there are many bidders the ad space goes to the highest bidder. An advertiser may even bid against himself and end up paying more. 

In any case when a match is made an ad server rolls out the ad to the publisher site.

The entire process occurs in milliseconds, delivering the ad even as the visitor to that page is loading it.

Kritter serves the online digital advertising community with its superior and smart ad exchange platform. Publishers get maximum returns. Advertisers get maximum ROIs on ad spends.


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