This post was most recently updated on January 18th, 2023
Do you know the difference between an ad network and an ad exchange? If not, you’re in for a treat! It might be easy to confuse Ad Networks and Ad Exchanges, but they are two entirely different things. The main function of advertising networks is to aggregate inventory from several publishers, mark it up, and sell it to advertisers for profit. Ad exchanges are more transparent than ad networks since they enable advertisers to view the exact price at which publishers’ impressions are being sold.
In this post, we’ll explore the differences between these two types of platforms and explain why ad exchanges are quickly becoming the go-to choice for publishers. Stay tuned!
Consider Ad Exchange as an online marketplace where publishers & advertisers meet to buy and sell ad inventory. A big pool of inventory is gathered by ad exchanges from multiple ad networks, SSPs, and publishers which is then presented to DSPs, media buyers, ad networks & brands to buy the impressions in real-time. Under impressions, comes the video, display, mobile & in-app ad inventories.
For publishers to get started with ad exchanges, they can contact one or sign up directly. Publishers join this pool in order to maximize profits from their inventories by tapping into global demand. Here, publishers have the power to control their entire inventory through ad exchanges. They can set floor prices & tweak them, set up targeting criteria, add or block demand, etc. Ad Exchanges are primarily enterprise-level publisher-oriented with high traffic and revenue requirements. In such cases, ad networks and SSPs can help small & medium-scale publishers to access them. In a nutshell, ad exchanges are an efficient way of buying and selling ad inventory.
Ad exchanges allow publishers to get the best price for their ad inventory and allow advertisers to target the right audience at the right time.
An online ad network works as an intermediary between buyers and sellers of ad inventory by aggregating ad inventory supply from publishers & match that supply with buyer’s demand. As inventory is usually segmented into categories, such as gender, location, and age, advertisers can somewhat target specific audiences.
Here are the 25 best ad networks for publishers in 2022: https://www.monetizemore.com/best-ad-networks-for-publishers/
Advertising networks collect unsold inventory from publishers and sell it to advertisers. Ad networks make money by taking a cut of the publisher’s ad revenue once inventory is sold through real-time bidding. Ads go live on publisher’s sites through a highly automated process where the website invokes an ad request by incorporating code that makes a call to the central advertisement server, which serves the ad.
|Its Automated tech platform improves overall ad buying & selling efficiency.||Ad Networks are owned and operated by people.|
|With ad exchanges, publishers can sell their remnant ad inventory transparently.||Streamlines the process of ad buying and selling between publishers and advertisers.|
|Publishers have more control over defining policies and rules for buying & selling ads.||Connects advertisers with premium ad inventory sources from industry-standard publishers.|
|Ad impressions are sold via real-time bidding (RTB auctions) on an impression by impression basis.||Some ad networks do offer advertisers an automated ad-buying experience but this is not to be confused with the impression by impression automated bidding & targeting systems seen in programmatic media buying.|
|Depending on how much advertisers are willing to pay for ad inventory, ad impression prices keep fluctuating.||Ad Impressions are bundled together to be sold as packages to advertisers. The prices remain stable once the negotiations are over.|
|Zero third-party involvement||Publishers have no control over who will buy their ads.|
|Transactions between advertisers and publishers happen within the ad exchanges’ open-marketplace technology platform.||Reporting is managed by teams so it is not automated.|
|Publishers can pick on which advertisers can bid on their ad inventory.||Only certain publisher websites that have met their qualifications & apply for membership will be approved to join the ad network.|
|Performance reports are generated automatically and can be customized easily by publishers.||Publishers can sell both premium & remnant ad inventory at the best rates.|
Despite the similarities between ad networks and ad exchanges, they operate differently, even if they appear identical at first. Unlike ad networks, which always determine the price of ad inventory, ad exchanges only use real-time bidding, so pricing is always competition led and the highest bidder gets the ad inventory.
In an ad exchange, inventory is purchased more transparently since advertisers specify various parameters as to where and to who ads should appear, meaning they are generally more willing to pay more for these impressions. Ad exchanges allow advertisers and publishers to discuss the type of ad inventory they are trading directly between them.
Ad networks, on the other hand, provide exclusive, pre-segmented inventory to serve a specific audience at higher rates. Ad networks have been deemed as less transparent, as advertisers don’t know which websites their ads may pop up on, and publishers have no clue regarding who bought their ad inventory.
Despite the fact that ad networks made selling and buying ad inventory more efficient, ad exchanges can be considered as the leveled-up version of an ad network.
So, what’s the takeaway? If you want to ensure that your ad revenue doesn’t take a nosedive (and who wouldn’t?) then it might be time to make the switch to an ad exchange. Not only will you get better value for your inventory and more relevant ads for your users, but you can also rest assured that our Intelligent Price Floor Solution is keeping those CPMs sky-high.
Here’s the course that 300+ pubs used to scale their ad revenue.