Ad Exchange is a real-time online bidding market that allows advertisers and publishers to buy and sell their advertising inventories and impressions.
Most of the ads sold on Ad Exchange are display creatives such as banner ads, native ads and videos. They are always native across both mobile and desktop platforms. The majority of the features and functions in Ad Exchange are automatic or pre-programmed which will allow publishers, studios and companies to automate their advertising purchases. When a user reaches a page on an app or website that has ad space, Ad Exchange will allow ad networks to directly purchase ad impressions.
To connect to Ad Exchange, advertisers can use demand side platforms (DSP) and utilize audience data to decide whether the offered ad space is relevant for their advertising campaign. Once the decision has been made, they will proceed to purchase the ad space in real-time bidding process. All of these processes and decision making can be done manually or automatically by algorithms based on demographic and user data to find the best value for advertisers.
There are 2 crucial types of auctions: open auction and private auction.
- Open auction doesn’t have any restrictions on who will get to join the auction and bid on ad space and impressions.
- Private auctions are restricted a certain amount of clients that have the permission to join the auction.