Digiday reported that in 2014 alone around 70 billion ad impressions were available daily via ad exchanges Those statistics were for 2014, and since then, the programmatic industry has grown at a phenomenal rate with spending set to reach heights of over $80 billion in programmatic advertising worldwide. One can only imagine how many impressions are available in 2019.
In this guide, we’ll get you well-equipped to face the world of Advertising Exchanges in 2019 and beyond. Let’s jump right in!
Do you know how to navigate the complex world of Ad Exchanges? At MonetizeMore we have established relationships with all the Tier 1 and Tier 2 advertising exchanges. Want help to get access to their demand? Sign up to MonetizeMore today!
What is an Ad Exchange?
You might be thinking, what is an Ad Exchange? Well, it is a technology-driven platform where publishers can sell their ad inventory, and advertisers can buy it. This advertising inventory can include video, mobile, display, in-app and other types.
Through Advertising Exchanges, multiple ad networks come together on one platform. Real-time bidding (RTB) technology is used to buy/sell inventory and determine prices on an impression basis. An Ad Exchange can also be commonly referred to as a Supply-Side Platform or SSP.
For publishers, this is beneficial since they can sell their inventory and potentially get more bang for their buck from a consolidated source containing a large pool of advertiser demand. For buyers/advertisers, it gets easier to reach a mass audience, use advanced targeting technology to increase campaign effectiveness and zero-in on their preferred audience.
This video below from AdAge goes on to explain it further:
How DSPs work with Advertising Exchanges
It’s easy to get confused and mix Ad Exchanges up with Demand Side Platforms (DSP). These two programmatic platforms are not the same. Instead, they are meant to complement each other.
Ad Exchanges are platforms part of the programmatic advertising ecosystem which makes ad inventory from multiple ad networks available for purchase by advertisers through RTB technology.
To utilize the Advertising Exchange platform a buyer/advertiser needs something that can manage the bids for them. This bid application or software interacts with the exchange’s RTB API and helps the buyer assess available impressions.
The DSP enables the advertiser to automate the ad buying process within a range of multiple exchanges while all the information such as inventory costs, ad placement, ad sizes and more remain transparent.
Open vs. private exchanges: what’s the difference?
Open Ad Exchanges allow publishers to put their inventory into the open market and have both ad networks and advertisers compete for their ad impressions. Popular examples of companies in the market include Google Ad Exchange, OpenX, Rubicon Project, and AppNexus.
These public exchanges represent the basic idea of a marketplace run based on auctions with billions of impressions. Unlike premium ad inventory mostly available on private exchanges, open exchanges contain ad inventory from all kinds of publishers and do little to differentiate them.
Because of various factors such as brand safety concerns, ad fraud, and more some premium publishers and advertisers have started gravitating towards private ad exchanges.
Private ad exchanges represent a more controlled, brand-safe and premium ad inventory environment. Premium publishers that sell to strong brands usually get to join these private exchanges. At the same time, it allows publishers to get premium prices for their inventory.
A private exchange can also consist of exclusive publisher groups that only allow vetted buyers, agencies and media planners to bid on their inventory. Any ad inventory that is left unsold goes to an open ad exchange where the rest of the market can bid on it.
Vox Media is an excellent example of a private exchange. Together with NBCU, they created Concert which is a prestigious private advertising solution. This group contains a long list of premium publishers and brands such as Vox, CNBC News, Flipboard, Quartz, Livestrong, Buzzfeed and many more. Through Concert, they give advertisers the ability to advertise to over 200 million monthly unique visitors within a highly brand safe environment.
What is the benefits of Private Ad Exchanges for publishers
A publisher can decide to set up a private ad exchange for a few reasons. One fundamental reason is the fact that private means higher quality ad inventory for advertisers and higher prices resulting in better ad revenue for publishers.
Let’s say you operate an auto review site and you put your inventory on a private ad exchange for select automakers. Since the topic is so highly related to the advertiser’s core product line, they can increase their spend on your inventory. It could mean changing a once-off buyer into a long-term customer.
Besides the potential for long-term customers, less time, work and money go into monetizing premium inventory this way.
Publishers also remain in control as they can directly specify who gets access to their ad inventory and with that, the price they want to accept for that inventory.
The publisher might even be able to sell less profitable or even non-premium inventory to buyers. If their non-premium inventory has some relation to their premium selection, the chances remain that the buyer might be interested.
Even though private exchanges poses many benefits, it needs to fit your business model. The possibility remains for buyers to pay higher prices than with the open market, so you’ll need to be able to sell and provide the value as perceived.
Accurate and exceptional ad inventory data is crucial to a publisher succeeding with this setup.
Ad Network VS Ad Exchange
Both these ad tech companies can seem very much the same but have some key characteristics that set them apart.
An ad network combines the ad inventory from many publisher websites into one platform and resells it to advertisers by adding a certain margin to the inventory. They also group inventories according to specific demographic elements such as user age, gender, location and more.
An Advertising Exchange does not conduct arbitrage as their advertising network counterpart. Here, pricing of impressions and websites where ads appear are transparent which is not the case with ad networks.
Ad Exchanges can also give access to more publisher ad inventories than Ad networks since they integrate multiple sources into one platform. DSPs are used here and include better targeting options as compared to Ad Networks for advertisers.
Google AdX VS AdSense
On the other end, Google also offers what it calls its range of DoubleClick by Google products (now known as Google Ad Manager) of which DoubleClick Ad Exchange (AdX) is a part of. AdX is the premium version of AdSense which was built specifically for premium publishers and advertisers.
As a publisher, getting access to this ad exchange means putting your ad inventory in front of all the advertisers found in AdSense as well as additional premium/big brand advertisers. Publishers who switch from AdSense to DoubleClick Ad Exchange with MonetizeMore tend to see a 25%+ increase in their ad earnings.
For the official Google product comparison chart visit this link.
Besides increased earnings, there are other beneficial factors to consider for a publisher when switching over to AdX such as gaining access to:
- Multiple demand partners and networks
- Better optimization tools
- Faster payments from Google via multiple sources
- Better targeting which increases your placement engagement
- And much more
However, publishers can only gain access to this network by either being invited by Google or joining through one of Google’s certified partners. MonetizeMore is a certified Google partner and can help you get started via our master Google Ad Exchange for publishers account.
Top Ad Exchanges
As you’ve probably guessed it, Google’s Ad Exchange is among the top Advertising Exchanges in the world. However, they are not the only company offering exchange-related services.
It is hard to say who is ranked the highest, has the biggest pool of ad inventory or the most users. From our experience working with 100s of publisher partners, we’ve identified the ad exchanges below as those performing the best in the industry.
- Google Ad Exchange
- Rubicon Project
- Verizon Media
Trends for 2019
Econsultancy.com recently published an article about ad exchanges and their outlook for 2019. Publishers have been relying on ad exchanges for many years. However, there is a growing trend of the market moving over to programmatic direct and private marketplaces.
As a publisher, you can pursue a strategy that uses these direct and PMP offerings alongside your core open ad exchange monetization. Having a balanced and sophisticated ad revenue strategy will bring in higher earnings for your site and give you more control over the process.
Media buyers and advertisers for big brands supplement their open ad exchange bidding with these private marketplace deals and work with publishers directly as they can gain a competitive advantage with the right publisher partnership.
Executives from major media brands such as The Guardian and The New York Times have been predicting a decrease in open marketplace auctions in 2019. The Guardian has experienced tremendous growth from premium programmatic deals over the last year.
The New York Times on the other hand completely removed themselves from open ad exchanges in Europe. This was partly because of GDPR, and the results have not been negative as many would believe. They still experienced growth in digital advertising.
How many publishers can reduce their reliance on ad exchanges remains uncertain. Not all publishers have premium traffic that would attract private deals. The same goes for advertisers who all don’t have access to private marketplaces and might not be able to scale accordingly with such deals. Advertisers will still find quality inventory at fair prices on the open exchange.
We see that programmatic direct and PMP deals will not be enough to move the majority of publishers away from ad exchanges completely.
You should now have a better understanding of Ad Exchanges and the role they play in the programmatic advertising ecosystem. MarketWatch research shows the global Programmatic Display market is valued at 84.6 billion USD in 2017 and is expected to reach 244.1 billion USD by the end of 2023, growing at a CAGR rate of 19.3% between 2017 and 2023.
As a publisher, the easiest way to take advantage of ad exchanges is to work with the premium players and supplement that with your own private deals. This way you can continually evolve your strategy to make Google Ad Exchange compete in your auctions with the likes of OpenX, AppNexus and Verizon Media to bring in higher RPMs for your site.
What advertising exchanges are you working with? At MonetizeMore we’ve spent years establishing and cultivating priority access to all the Tier 1 and Tier 2 advertising exchanges. Want help to get access to their demand? Sign up to MonetizeMore today!
What are the biggest ad exchanges?
Some of the biggest ad exchanges include Google Ad Exchange, OpenX, Rubicon Project, AppNexus, Verizon Media, PubMatic, and more.
What is an ad exchange vs ad network?
Ad networks connect publisher ad inventory with buyer (advertiser) budgets by acting as a go-between. Ad Exchanges act as a direct marketplace and integrate ad inventories of different ad networks and publishers while connecting to DSPs to offer better targeting and functionality to advertisers.
How do ad exchanges make money?
There are different ways ad exchanges make money. They can do so by asking for a setup fee. They can also take a percentage of the advertising spend that advertisers use to buy publisher ad inventory.
Is AppNexus an ad exchange?
Yes, they are one of the top ad exchanges in the market.
How do ad exchanges work?
Ad Exchanges are tech platforms where publishers sell ad inventory, and advertisers buy it. Multiple ad networks connect through one platform, and real-time bidding is used to buy/sell inventory. Participants get access to advanced targeting features to increase their campaign effectiveness.
Is Google an ad exchange?
Google is not an ad exchange but owns one called the Google Ad Exchange.