Ad exchanges: advertise online

There are many options for ad­vert­isers to place their ad­vert­ise­ments online, allowing them to reach potential customers. Thanks to real-time ad­vert­ising (buying and selling ad­vert­ising banners in real time), ad­vert­isers and pub­lish­ers have had lots more options to choose from in the last few years. Everything centres on ad exchanges, which can be described as ‘the Wall Street of real-time ad­vert­ising’, where supply and demand meet.

Real-time ad­vert­ising

Real-time ad­vert­ising (RTA) is the trading of virtual ad­vert­ising products (e.g. banners) in real time. These fully-automated mar­ket­places were developed in order to fa­cil­it­ate and speed up com­plic­ated, lengthy ne­go­ti­ations.

Real-time bidding

Real-time bidding (RTB) is a specific RTA process. Ad­vert­isers bid for ad im­pres­sions (the amount of an­ti­cip­ated ad place­ments) in real time. Bidding runs auto­mat­ic­ally via different tools; the advert with the highest offer wins and is then ad­vert­ised.

Ad im­pres­sions are traded on ad exchange platforms. Pub­lish­ers enter their ad im­pres­sions into the supply-side platform, a tech­no­logy platform that enables them to manage their ad­vert­ising space. On the other hand, there’s the demand-side platform, which focuses on merchants’ requests. Ad exchange: the term ‘ad exchange’ describes a mar­ket­place where ad­vert­ising stock (page im­pres­sions) are traded. Supply-side platform (SSP): supply-side platforms are used by pub­lish­ers to manage sales. Offers are organised and supplied here. Demand-side platform (DSP): merchants and ad­vert­isers use demand-side platforms to relay their requests. DSPs use data from ad­vert­isers to organise and optimise demand. Take the following scenario: a user visits a website whose publisher offers ad im­pres­sions through an ad exchange. The SSP and DSP then begin to com­mu­nic­ate with one another.

• The SSP provides relevant in­form­a­tion like the content cat­egor­ies for the ad­vert­ising space, user ID for each im­pres­sion, or ad­di­tion­al data for targeting and re-targeting.

• The DSP checks this data and decides whether a campaign should be ad­vert­ised and, if so, which one.

• The DSP then names a bid (on the ad­vert­iser’s behalf) for the relevant ad­vert­ising space or ad im­pres­sion.

• The SSP receives various bids and cal­cu­lates the highest bidder (via RTB). The winning bid is then ad­vert­ised.

• The user doesn’t notice any of the process, as it only lasts a few mil­li­seconds.

With ad exchanges, a large amount of valuable data is connected over different platforms and systems. This makes it easier for the ad­vert­iser to tailor their services to their target group. Ad exchanges offer ad­vert­isers: ⇒A reduction of scatter loss ⇒An increase in return on in­vest­ments (ROI) ⇒An im­prove­ment on per­form­ance Real-time marketing is currently one of the fastest-de­vel­op­ing online ad­vert­ising solutions. New systems are con­stantly being in­teg­rated into the re­spect­ive platforms, and processes are con­nect­ing with one another better. The United States is the fron­trun­ner when it comes to ad exchanges. An overview of the biggest ad exchange providers:

• Double Click Ad Exchange (Google)
• Microsoft Ad­vert­ising Exchange
• OpenX
• The Rubicon Project
• AppNexus

In the United Kingdom, the ad exchange market is starting to replace tra­di­tion­al display marketing. Pub­lish­ers are presented with new pos­sib­il­it­ies for in­creas­ing their earnings through blog or website mon­et­isa­tion. The system is also be­ne­fi­cial to merchants and ad­vert­isers: they can reach their target group more easily through exact targeting and thus use their ad­vert­ising budget on optimised ad place­ments. If you would like to try your hand with the topic of ad exchange, you can make use of these new tech­no­lo­gies.