An ad exchange is used to facilitate programmatic media buying and selling on the internet. These exchanges are unique in that they make it possible to purchase individual ad impressions instead of making bulk buys.
It may help to think of an ad exchange as an internet-based marketplace. Both advertisers and publishers meet there to buy and sell ads and the space to display them.
Modern ad exchanges use something called real-time bidding (RTB). This process doesn’t just allow for individual ad purchases. It also generates pricing based on up-to-date demand for targeted user segments.
All of the transactions on an ad exchange happen programmatically. Algorithms take publisher data and traffic and match it with the most relevant commercial vertical. This approach allows for relevant advertising done on a global scale.
It’s clear that ad exchanges make the process of programmatic advertising easier for both publishers and advertisers. How do you select the provider that will work best with your company? Here are a few things to consider.
The Benefits for Publishers and Advertisers
Ad exchanges serve the needs of both publishers and advertisers. For publishers they:
- Ensure that publishers receive adequate ads for their available space
- Provide better ad creative quality
- Offer ads that are more relevant
For advertisers they:
- Help provide connections to niche content platforms
- Offer a variety of options to meet a variety of marketing goals and budgets
- Allow bidding during low demand times to lower costs
Ad exchanges offer greater efficiency and convenience for both publishers and advertisers.
Assurance of Good Traffic Quality
Unfortunately, many of the same features that allow ad exchanges to offer up such accurately personalized ads also create the risk of fraud. Every ad impression may be moved through multiple platforms before it arrives. If any of those platforms fail to take proper precautions, unsafe ads could be displayed on publisher websites.
To combat this possibility, reputable ad exchanges implement fraud prevention methods. These include the use of anti-fraud providers that verify bid requests and technology that is used to scan ad creatives to ensure that they are safe for display.
Adequate Data Centers and Connection Types
An ad exchange should be able to receive bids from multiple partners to serve a wide range of publishers. For that to happen, they must be able to support all of the key connection types. That includes RTB. However, they should also connect with VAST and JS tags, etc.
Additionally, ad exchanges need to have data centers in place. These help ensure that ads are served in a way that doesn’t cause performance delays. If they do not, this can lead to a poor user experience. Global ad exchanges should have a data center in each region where they operate.
IP and Device Intelligence Capabilities
When a publisher broadcasts a request for bids, that may not include all of the information needed to properly complete the request. One of the most common pieces of missing information is the device data. Oftentimes, the issue is that the publisher simply doesn’t have the capabilities needed to provide that information.
Ideally, an ad exchange will be partnered with vendors that can catch these incomplete requests and fill out the correct data. They can also add missing geographical data in cases where that data is relevant.
Adherence to IAB Standards
The most commonly occurring fraud in programmatic advertising is called fake supply. This fraud impacts the publisher as perpetrators misrepresent ad inventory.
Fortunately, there is an organization called the Interactive Advertising Bureau (IAB) to help prevent this. An ad exchange that follows IAB standards may not prevent all fraud but will be able to provide protection from most of it.
The most important tool for publishers is an IAB-provided file, “ads.txt.” This file is a list of authorized vendors. There is also the file “sellers.json” that checks ad inventory sources and traffic resellers.
Bidstream optimization technology is used to analyze the purchasing patterns of various advertisers, devices, and geos, as well as common channels. It then considers the bid/win ratio of that advertiser.
The bidstream traffic is optimized using this information. This optimization reduces resource contention on buyers and ensures everyone receives more relevant traffic and submits bids more efficiently.
Common ID Solutions
To create a better online experience for Chrome users, Google is getting rid of “advertising ID.” This feature is what was used for user tracking, attribution, and ad retargeting.
In response, common ID solutions have been created to allow advertisers to continue to target without compromising anybody’s privacy. This approach will involve the use of a single sign-on technology that is stored as a hash for security purposes.