Ad Exchange

An Ad Exchange is a digital marketplace for the distribution of advertising inventory.

Ad exchanges are like a big pool of ad impressions where publishers add their inventory, hoping someone will buy it. Merchants can buy the advertising spaces on those platforms via real-time bidding, an online auction procedure that determines prices for advertising inventory based on supply and demand in real time. Advertising inventory is always delivered to the highest bidder for each ad space.

Ad exchanges are particularly used to sell display, video and mobile advertising inventory like mobile banner and video ads or full screen interstitials.

The biggest advantage is that they enable advertisers to buy ads from a wide range of publishers without negotiating individually with every single publisher. This way, ad exchanges make the trade with advertising inventory a lot easier and also more efficient.

Ad exchanges resemble ad networks, however, ad exchanges are more transparent because you can see the price impressions are sold for. Ad networks even buy inventory from there.