Ad Exchange - An Efficient Way of Buying and Selling Ad Inventory

Ad Exchange - An Efficient Way of Buying and Selling Ad Inventory

Ashwin Krishnakumar
Ashwin Krishnakumar

Chief Technology Officer, Airtory

Published on: 29 Jan 2023

Reading time: 5 minutes

With an increasing number of services having moved online with the widespread availability of the internet, consumers are spending more time than ever in online spaces. That is why advertisers and publishers are always looking for effective platforms to maximize their business exposure in the online sphere. This is where Advertising Exchange or ad exchange comes in. Ad exchanges are pools of ad impressions where advertisers can buy ad inventory from publishers and, in turn, publishers can sell publishing spaces to the highest bidder. An ad exchange is a neutral, autonomous platform that allows for programmatic ad exchange driven by real-time bidding (RTB). The platform connects advertisers on a demand-side platform (DSP) with publishers on a supply-side platform (SSP).

As the mobile landscape has grown and evolved over the years, advertisers and publishers have leveraged the ad exchange platform to optimize processes and maximize their ROIs. An advertiser is always on the lookout for platforms to put its message, product, or service in front of its customers. A publisher, on the other hand, is any site, search engine, or app that will host the ad. Virtually anyone can buy and sell ad impressions on the ad exchange platform. As a matter of fact, an advertising exchange platform is a more efficient way to buy and sell digital ad spaces. 

How it Works

To understand the concept of advertising exchange, it becomes crucial to understand how the platform works. An ad exchange is a key component of programmatic advertising where the most effective ads are shown to campaign audiences based on various signals. The process of ad exchange begins with a publisher making their ad inventory available on the ad exchange platform through a Supply-Side Platform (SSP). When a visitor arrives at the publisher’s page, the information about what the user could be interested in is collected by means of cookies. The ad exchange analyses the visitor data, and based on that information, it selects the most relevant bidders. The ad exchange platform ensures that only suitable ads are considered for the space and eliminates advertisers who do not meet the criteria of the requirements. After the entire process, the highest bid ad appears on the publisher’s website. The whole RTB ad exchange process happens in a matter of seconds.

Types of Ad Exchanges

In this vast digital landscape, an ad exchange is a dynamic space with constantly changing parameters. There isn’t any single type of ad exchange that works for both publishers and advertisers. To narrow it down, three types of ad exchange exist - open ad exchange, private ad exchange, and preferred ad exchange. 

Open Ad Exchange

The meaning of open ad exchange is exactly what it sounds like. It is a virtual marketplace where many publishers can list their ad inventories that is available for sale to any advertiser, agency, or ad network. The primary benefit of open ad exchange is the volume that the ad type receives. Advertisers looking for wider publicity often choose open ad exchange as a platform.

Private Ad Exchange

By virtue of being a closed platform, a private ad exchange involves publishers having more control over who can place bids and when. Within this, publishers have the full authority to block ad networks and restrict third-party members from accessing their pool of ad inventory.

Preferred Ad Exchange 

As the name suggests, the preferred ad exchange platform allows publishers to sell digital ad inventory to their preferred advertisers. This type of ad exchange involves direct negotiations between publishers and advertisers, where publishers can sell ad space to certain advertisers at an agreed-upon price.


With the ad tech market growing by leaps and bounds and its importance rising more than ever, publishers seek an edge to stand out within the advertising space and increase their ad revenue. Ad exchange help publishers get a competitive price for their ad space and allow advertisers to reach out to the right audience at the right time. 

The key benefits of some of the top ad exchange platforms include the following:

More Control

One of the prime benefits of ad exchange is that it allows publishers to choose ad formats and thematic areas of the ads that can appear on their websites. Publishers can choose to filter and block ads with sensitive content or content competitors with the help of an ad exchange platform. Moreover, ad exchange help publishers decide where and when the ads can be shown to a particular audience.

Competitive  Prices

Another key benefit of ad exchange is that the platform allows publishers to set a CPM floor. Control over floor pricing ensures that a publisher gets a fair and transparent price for their ad inventory. Thus, with the help of an ad exchange platform, publishers can increase their profits and get the best out of their efforts by setting attractive prices for their ad spaces.

Ad Filtering 

An ad exchange platform gives publishers a certain measure of control over both the ad quality and ad unit type. Publishers can filter out particular ad units, like video ads or interstitials, to suit their website or app perfectly. They can filter the type of ads that are shown to their audience that match their organizational needs.

More Optimization Options

Most of the time, publishers do not get an adequate fill rate, thus resulting in impressions that go unfilled and cause publishers to lose money in return. But with an ad exchange platform, publishers can get solid CPMs, a pool of advertisers’ interest, and a broader ad demand. This ensures that relevant ads run seamlessly on the publisher’s website without worrying about unfilled ad spaces.

From manually purchasing advertising spaces from publishers to virtually buying and selling ad spaces through ad exchanges - the ad-tech space has come a long way. Ad exchange platforms have improved buying and selling of digital ad inventory. With the growing popularity of programmatic advertising, ad exchange platforms have become the go-to virtual marketplace for both advertisers and publishers. 

Google ad exchange, AppNexus, and OpenX are some of the top ad exchange platforms that have transformed the ad-tech landscape for the better. And for that, Airtory offers an easy-to-use and well-equipped platform for publishers as well as advertisers. With Airtory, users can create more personalized and impactful ad experiences that enhance the overall ad campaign performance. Airtory is one such creative management platform that has standard ad sizes and universal ad tags that are accepted across ad exchanges. Hence, giving users an easy way to incorporate rich media advertising in their digital plan and improving ad performance.

To leverage any marketing tool to increase their sales and better ROIs, advertisers and publishers must have clear goals and milestones. In a broader sense, ad exchange gives advertisers much greater control over who sees their ads and where they are placed. At the same time, it lets publishers find the right demand sources to work with based on factors such as latency, unique demands, bid rates, and ad space availability. 

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