Ad Networks and Ad Exchanges are powerful monetization tools as it stands. No monetization strategy is complete without either ad networks or access to ad exchanges. After all, ad networks and ad exchanges are the backbone of the Internet advertising system.
Advertising was originally published on websites via ad networks. Ad networks allow websites owners to sign up to push ads from ad servers onto their own websites. These ad servers contain a database of advertisers that the ad network has partnered with, and the ads are displayed according to an algorithm.
For example, an ad network’s server might display an ad about Penn State University to those in Central Pennsylvania, but such an ad wouldn’t be as relevant to a London site visitor. And if an ad server can’t find an ad that matches the visitor, it passes the request on to a partner network — a process that continues until a proper ad can be found. Some ad networks use highly complex algorithms and cookies to determine which ads to display and to whom.
As the internet grew, the ad network advertising model became efficient and cumbersome. The need for a better advertising publishing system gave rise to ad exchanges.
The rise of ad exchanges
Ad networks are slow at serving dynamic advertising, leading to lost revenue for both publishers and advertisers. Multi-level searching for proper ads on ad servers can sometimes give inappropriate product advertising, like an ad for an online dating website on an article about abusive relationships.
Revenue tracking with ad networks is cumbersome and complicated because reports need to be aggregated from multiple sources.
Ad exchanges were designed to fill in the gaps and improve upon the existing approaches to advertising. Ad exchanges provided a centralized system for combining all the impressions available across multiple ad networks. The most appropriate ads for the individual visitor are then matched according to the advertisers’ target demographic, budget, and placement needs.
So what should you look for when picking an ad exchange to use?
A great ad exchange includes the following:
- A well-documented API (Application Programming Interface) that you can use to collect audience-targeted data.
- Dynamic auction functionality, based on pricing that the publisher can control.
- Self-serving applications for ad creation, traffic and management, and reporting.
The main players
There are dozens of ad exchanges out there, but a few main players.
- Yahoo’s Right Media was the first popular ad exchange. The Yahoo network itself has a broad reach, and many advertisers still use it.
- Google Ad Exchange provides DoubleClick’s real-time-bidding Ad Serving platform. Since this exchange is provided by Google, the technology stack is the most sophisticated among all the top level exchanges. And because it uses DoubleClick’s real-time-bidding, you can feel confident that you’re getting the highest rates to publish these ads.
- AdMeld provides publishers with premium services in order to maximize their revenue streams, reduce operating expenses, and forego unwanted ads.
- PubMatic’s ad management solution provides an all in one solution for auction, brand protection, and operations support.
- AppNexus integrates exchanges and inventory aggregators, like Google’s DoubleClick and Microsoft’s AdECN.
Why ad networks and ad exchanges word best together
So for all this talk about how awesome ad exchanges are, you should drop ad networks and just switch to ad exchanges, right?
Ad exchanges were not meant to replace ad networks altogether. Instead, they serve the same goal in different ways: to match ad buyers with publishers. Ad networks scour high volumes of ads for the right one too for any given request. Ad exchanges are more personal marketplaces where ad buyers can purchase space on your website. By hedging your bets and publishing ads from both ad networks and ad exchanges, you’ll increase your overall CPMs.
Let different ad networks and ad buyers in ad exchanges compete for space on your website!