What is an Ad Exchange?

Ad exchanges allow publishers a place to make ad inventory available to potential buyers — existing as an intermediary between the supply side and the demand side of the ad buying process. 

How does an Ad Exchange work?

Ad exchanges plug into supply-side platforms (SSPs) and demand-side platforms (DSPs) so that a wide variety of publishers and advertisers have access to and can exchange ads and inventory. Essentially, they’re the pool that impressions are taken from.

Many DSPs and SSPs can plug into ad exchanges, creating a vast landscape that generates many more opportunities for publishers and advertisers to monetize. Ad exchanges also combat bias in the buying process by using regulations that make the whole exchange more transparent.

For example, in ad exchanges, publishers can post the minimum price they’ll accept for an impression (called the “floor price”) in a real-time bidding (RTB) auction. Similarly, advertisers can set the highest price they’ll pay for the same impression. This allows for automatic and instantaneous ad exchanges, creating the optimal scenario for both advertisers and publishers in any given transaction.

As programmatic has gained prevalence, the lines between some of these entities are blurring. Both SSPs and ad exchanges post ad inventory for sale, and some platforms provide more than one of these services at once, so there are some redundancies in the ad tech world. Moving forward, we can expect these different platforms to shift and blend, allowing for the most efficient and streamlined programmatic ad buying process possible.