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People and companies in the digital advertising industry frequently buy and sell ad inventory on dedicated marketplaces known as ad exchanges. However, there is a lot of confusion surrounding ad exchanges. Learn what an ad exchange is, how it works, who uses them, and how to avoid confusing ad exchanges with other similarly-named concepts, such as ad networks.
What is an Ad Exchange?
An ad exchange is a specific online marketplace where individuals, companies, and entities involved in the digital advertising business can buy and sell ad inventories. The many types of entities that can use an ad exchange include advertisers, publishers, supply-side platforms (SSPs), demand-side platforms (DSPs), and even ad networks, ad agencies, and agency trading desks.
Seller entities (e.g., ad networks, SSPs, publishers) with ad inventories for sale gather on ad exchanges to create pools of assorted ads.
Buyer entities (e.g., advertisers, DSPs) can view the presented inventory pools and bid on them in real-time.
Ad Inventory Types
Ad inventories can be classified by type or format: display ads, native ads, in-app ads, video ads, mobile ads, etc. In exchange for benefitting from an ad exchange’s global reach, publishers have complete control over the inventory for sale, with options such as setting floor pricing, viewer targeting, or functions letting publishers add and block demand sources.
How to Use an Ad Exchange
Publishers looking to get started with ad exchanges can typically contact one directly and follow the exchange’s directions and requirements to become a member. However, most ad exchanges impose minimum traffic and revenue requirements. For this reason, it is impractical for a small or medium publisher to join an ad exchange unless supported by a suitable SSP or ad network.
Types of Ad Exchanges
Ad exchanges are categorized into three sub-types: open exchanges, preferred-deal exchanges, and private marketplaces (PMPs). Each type is suited for different kinds of publishers.
- An open ad exchange is open to everyone meeting the minimum joining requirements. All inventory offered on open exchanges is available via real-time auctions to all buyers, allowing entities to purchase and sell ad inventory programmatically.Examples: OpenX, Yahoo
- Preferred-deal exchanges are best suited for publishers wishing to negotiate a fixed price to a preferred list of advertisers.Example: Preferred Deal campaigns on Google Ad Exchange
- Private marketplaces (PMPs), also called private exchanges, are closed exchanges reserved for premium publishers and selected advertisers with the highest-quality ads. This level of exclusivity allows publishers to sell their inventory at the highest prices.Example: Smaato Exchange’s private marketplace
How does an ad exchange make money?
Although the exact terms, conditions, and revenue models vary from platform to platform, most ad exchanges employ three primary monetization methods: setup fees, publisher commissions, and advertiser commissions.
- Setup fees: Many ad exchanges impose setup fees on all entities joining their platform. Setup fees are typically flat rates in exchange for continued usage of the ad exchange.
- Publisher commissions: Ad exchanges may require publishers to pay a commission, typically a percentage of the money they earned from using a particular advertiser’s inventory. For example, if an ad package valued at $6,200 has a 10% commission, the publisher pays the ad exchange $620.
- Advertiser commissions: Some platforms may require advertisers to pay a commission, typically a percentage on top of the value of a negotiated deal.
What is an example of an ad exchange?
A typical example of a programmatic ad exchange is Google Ad Exchange. Publishers and ad agencies may join Google Ad Exchange to sell their ad inventories, and advertisers and ad networks may join the platform and compete via real-time bidding to obtain the inventory available for sale.
Best 10 Ad Exchange Companies for Publishers
Although there are hundreds of platforms for publishers to choose from, only a select number are among the top performers. Here are the top 10 highest-rated ad exchanges available today and which features, benefits, and unique value propositions each one has to offer for publishers.
1. Yahoo (previously Verizon Media)
Previously known as Oath and Verizon Media and better known for its search engine, Yahoo is a top-performing media and tech company operating one of the world’s largest ad exchanges. Verizon Media serves over 800 million users daily, including an extensive network of publishers, advertisers, and other entities in the digital ad industry.
The Yahoo ad exchange offers an array of monetization options designed to be as easy to use and implement as possible, compatible with multiple ad types and form factors across all common devices, such as desktop, mobile, and tablet-optimized. The ad exchange’s underlying technology is also employed to power the websites of some of Yahoo’s biggest publisher clients, such as TechCrunch or the Huffington Post.
If you are a publisher, Yahoo’s ad exchange offers the following features and benefits:
- High-quality ad creatives
- Compliant with worldwide privacy regulations (e.g., the European Union’s GDPR)
- Complete ad inventory management tools, including tracking of earnings from different channels and avenues
OpenX is a high-performance programmatic marketplace designed to empower publishers with detailed, actionable insights regarding their audience. The exchange’s primary tool, OpenAudience, is a powerful audience identity and data matching tool that enriches trillions of ad requests with valuable user data daily.
OpenX is also protected by robust anti-fraud and anti-malware measures and is a certified member of the Trustworthy Accountability Group (TAG). These certifications ensure that publishers and advertisers partnering with OpenX are safe from bad actors and the threat of malvertising.
Publishers partnering with OpenX enjoy the following advantages:
- Access to OpenX Bidder, an internally-developed, in-house maintained header bidding solution providing publishers access to premium buyer entities.
- A real-time guaranteed feature predicting audience volume and statistics giving publishers valuable data and insights for optimizing their monetization strategies and improving buyer-seller deals.
- A secondary mobile-optimized ad exchange where buyers and sellers can trade mobile ad inventory exclusively.
MoPub was founded in 2010 as an app monetization platform for publishers and developers. After Twitter acquired the company in 2013, MoPub became a Twitter subsidiary and began offering ad exchange services with an exclusive focus on the mobile market.
Today, MoPub is one of the world’s largest ad exchanges and one of the top-performing platforms for buying and selling mobile ads, serving over 1.5 billion users and partnering with over 50,000 developers and publishers, including industry leaders such as UbiSoft and Zynga.
Publishers using MoPub can expect the following benefits:
- In-app monetization features
- Real-time bidding and mobile mediation features, ensuring publishers have access to the best demand sources
- Real-time impression tracking
- Data tracking displays revenue at the impression level, allowing publishers to understand the exact value of their ad inventory
4. Google Ad Exchange (AdX)
Google Ad Exchange (AdX), previously known as DoubleClick Ad Exchange, is the search engine giant’s ad network. It is powered by Google technology under the same umbrella as Google Ad Manager. As a premium ad exchange, only registered members of the Google Display Network (GDN) can use Google AdX to buy and sell ad inventory.
Google Ad Exchange lets buyer and seller entities trade ad inventory using one of two auction models: open and private auctions. These models mean that Google AdX can function as either an open exchange or a private marketplace (PMP), providing high flexibility and a wide range of pricing options.
If you are a small or medium publisher looking to access Google AdX, you likely do not meet Google’s stringent requirements to join the platform. In that case, you may need to partner with a Google Network Partners (GNP) program member.
Joining Google AdX grants access to the following features and benefits:
- Account-level filtering of advertisers and ad creatives, giving publishers total control over the content displayed on their sites, apps, and other properties.
- Numerous reporting criteria and parameters: Publishers can organize their data reports by geographic area, above-the-fold (ATF) units, below-the-fold (BTF) units, layouts, sizes, and many more.
- Maximum convenience: Google AdX handles as many aspects of ad serving as possible (delivery, payment, currency conversion, etc.) to ensure you can focus on monetization instead of configuration.
5. Magnite (Ex-Rubicon Project)
Magnite is the ad exchange formerly known as the Rubicon Project. Founded in 2007, this advertising platform is the world’s largest independent supply-side platform (SSP) and one of the world’s busiest ad exchanges, with over one billion deals completed monthly.
Many high-profile clients buy and sell ads on Magnite, such as eCommerce giant eBay, the Wall Street Journal, or video game publisher Gameloft.
Publishers partnering with Magnite enjoy the following benefits:
- Publishers with little to no technical knowledge can still take full advantage of Magnite’s features, thanks to an easy-to-use user interface (UI) and superior user experience (UX).
- Magnite staff can provide publishers with manual assistance on request.
- Magnite has a global reach, letting publishers access worldwide demand from a single platform.
6. Index Exchange
Index Exchange (IX) is a global ad marketplace built on the principles of openness, transparency, and neutrality, letting advertisers and publishers buy and sell ad space and ad inventory safely and efficiently.
Index Exchange is operated by the IX Team and trusted by some of the world’s most trusted media and news companies, such as The Economist, Business Insider, and The Telegraph.
Publishers partnering with Index Exchange can expect the following benefits:
- The platform is powered by Business Intelligence (BI) software, providing publishers with a wealth of data points for publishers to optimize their strategies
- The Wrapper Pulse API and IX exchange tool provide publishers additional actionable insights, such as impression count, geographic regions, bid cycles, and revenue information.
7. Smaato Exchange
Smaato is an ad technology company operating Smaato Exchange (SMX), a self-serve, real-time bidding (RTB) ad exchange platform. SMX specializes in mobile applications exclusively, serving in-app ads globally. The exchange processes over 150 billion requests monthly.
Smaato’s SMX platform offers app developers and publishers monetization options for their ad spaces through real-time bidding or programmatic waterfall solutions.
Publishers choosing SMX may enjoy the following benefits:
- Access to over 450 demand sources worldwide
- Fully-featured ad exchange, with open and private marketplaces, options for RTB, direct deals, and third-party mediation.
- Publishers can find the best price for their ad spaces in under 200 milliseconds
AppNexus is one of the best-known advertising marketplaces, offering advanced monetization services to seller and buyer entities alike. The platform employs cloud-based software that allows publishers to optimize revenue yields quickly and efficiently by automatically connecting them with third-party DSPs worldwide.
AppNexus is the preferred ad exchange for major players such as Axel Springer S.E., Underdog Media, and the tech giant, Microsoft.
Publishers looking to partner with AppNexus will enjoy the following benefits:
- An internally-developed algorithm, Forecast Shaped Pacing, allows publishers to earn more by evenly distributing budgets, causing ad inventories to be matched to more programmatic demand during peak hours.
- A fully-featured publisher suite with numerous features: a supply-side platform (SSP), audience extension features, ad serving options, and many more.
- Publishers have access to detailed data logs, letting them verify whether their ad inventories have been sold in fair conditions on open markets.
SmartyAds is a real-time bidding (RTB) marketplace and open ad exchange designed to function as the ideal intermediary between web advertisers and publishers.
SmartyAds processes over 135 billion impressions monthly and is widely considered a white-label platform in the ad exchange industry.
Publishers with premium desktop and mobile ad inventories for sale can use SmartyAds to access worldwide advertisers and sell their inventories according to their exact needs and specifications.
If you are a publisher partnering with SmartyAds, you will gain access to the following features:
- SmartyAds CPI, a full-stack solution powered by artificial intelligence (AI) and designed to help mobile app and game publishers reach more buyers.
- An automated anti-fraud system protecting publishers from bots, fraudulent advertisers, and other bad actors using a Fraud score system.
- Unlimited access to demand sources, ensuring publishers can close deals that benefit them at every opportunity.
PubMatic is an ad technology company running the PubMatic Ad Exchange, a publishers-first, data-driven monetization platform powered by full-stack technology.
PubMatic is often considered a top choice for publishers of all sizes because it prioritizes premium advertisers, helping them connect to publishers at any scale.
This ad exchange delivers over 65 billion daily impressions and serves ads to over 800 million worldwide users. Top publisher clients include Dictionary.com, the Boston Globe, and Complex Networks.
Here are the top features and benefits offered to publishers on PubMatic:
- PubMatic’s OpenWrap header bidding wrapper, an open-source solution designed to facilitate client-side, server-side, and hybrid header bidding.
- Internally-developed RTB technology with access to a large and competitive pool of bidders, increasing potential revenues.
- PubMatic’s automatic traffic verification system helps keep invalid traffic (e.g., bots) out, preserving your brand safety.
Advantages of Using an Ad Exchange for Publishers
Publishers and seller entities with ad inventory for sale have many reasons to choose an ad exchange over another platform or method.
Here are some of the most significant advantages of ad exchanges for publishers:
- One of the most valuable features offered on most ad exchanges is minimum CPM settings, ensuring publishers always get a fair price for their inventory.
- Publishers can use filtering and blocking tools to block competing, sensitive, or brand-damaging content.
- Publishers have greater control over the sizes and formats displayed on their digital properties.
- Publishers have complete control over when and where the exchange will display their ads
- Ad exchanges offer more customization options than other platforms, letting publishers configure fonts, text colors, and corner styles for multi-ad placements.
Advantages of using an Ad Exchange for Advertisers
Advertisers and other buyer entities looking to purchase ad inventory may find many benefits in using an ad exchange.
Here are some of the most significant advantages of ad exchanges for advertisers:
- Advertisers have access to powerful audience targeting and performance. optimization tools, allowing them to increase their ROI and choose their audience
- Advertisers can use display frequency tools to control how often ads are shown to the same users.
- If an advertiser finds publishers they don’t wish to partner with, they can use the ad exchange’s block-listing functionality to prevent interactions and transactions.
- Ad exchanges offer advertisers a high degree of control over their ad spend budgets through price setting and bidding functions.
Ad Exchange vs. Ad Network
Although they are frequently confused for one another, ad exchanges and ad networks are not the same. Here is a table illustrating the most significant differences between the two platforms.
What is the best ad network for publishers?
As a publisher, the best ad network for your needs depends primarily on your size.
If you are a larger publisher, a registered Google Display Network (GDN) member, or a smaller publisher participating in the Google Network Partners (GNP) program, then Google Ad Exchange is the best choice.
Despite the rise of numerous high-performing competitors, Google AdX remains the world’s most popular Internet advertising program, leveraging Google technologies to optimize ad placement and contextual ad serving.
If you are a smaller publisher or a start-up looking to make your first steps with an ad network, then a platform such as SmartyAds may be better suited, as it allows publishers to scale up or down easily and without the need to meet additional requirements.
Best Ad Exchange Alternative: CodeFuel
Whether you are a small-scale publisher having difficulties joining an ad exchange, or want to further optimize your earnings with an additional solution, CodeFuel offers the features you need.
CodeFuel is here to help you leverage as many monetization avenues as possible for your mobile apps, websites, blogs, browser extensions, and other digital properties. We offer the following options:
- App monetization: Whether you operate a desktop or mobile app, CodeFuel can help you earn money through intent-based monetization.
- Search mediation: Optimize your search revenue per visitor with optimized landing pages, tailored verticals, and more.
- Website monetization: Make money with your website or blog with relevant, high-intent text ads and banners.
1. What does an ad exchange do?
Ad exchanges are a type of virtual marketplace designed to connect buying and selling entities for trading ad inventory and ad space.
2. Are ad exchanges safe?
Although not all ad exchanges are safe, there are ways to ensure you are working with a trustworthy partner, such as compliance with IAB standards, transparent policies, or the presence of anti-fraud systems.
You can benefit from additional layers of security by using preferred-deal exchanges or private marketplaces (PMPs), as their more exclusive nature significantly reduces the chances of dealing with a bad actor.
3. What is the best ad exchange?
The world’s best-performing ad exchange is Google Ad Exchange (AdX), due to having access to the largest ad inventory and some of the world’s most advanced technology and safety measures. However, many other platforms and alternatives are available, some of which may be better suited for your needs as a publisher.
If you own or operate a website, mobile application, or any other digital property in need of monetization, CodeFuel can help you. Our experts can help you research and leverage as many monetization avenues as possible and maximize your earnings. Contact us today to get started.