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Does Ad Networks and Ad Exchanges Work Hand in Hand?

During the dawn of online advertising, demand grew for both the publishers and advertisers! Increasing demand required fruitful ways to efficiently manage their respective buying and selling needs. While all the publishers desired to upsurge revenue, on the other hand, advertisers struggled to make a leap via their campaigns to the larger chunk of the audiences.

To balance it up, new and innovative technologies were introduced. Two most popular terms used in online advertising are ad networks and ad exchanges. These terminologies are often used together. Sometimes you will even find the same definition for both! However, these are two distinct things that deserve their own definitions.

Most web publishers are familiar with the term Google AdSense, in fact, it’s generally the first tool they turn to when they first choose to monetize their website with display ads. Maybe you have heard of the term ad exchanges before, maybe you haven’t, however, here we will discuss what an ad exchange is and how it is different from an ad network.

What is an Ad Network?

An ad network is a company that creates a nexus between websites with advertising to sell, then sum up the inventory for advertisers to buy, usually through programmatic exchanges. It helps in fetching inventory altogether. It also enables marketers to buy ad impressions on online faster, more proficiently and economically. If you see close ad targeting in ad network follows bulk buying and selling!

What is an Ad Exchange?

An online marketplace where advertisers, publishers, agencies, DSPs, SSPs, ad networks can buy and sell ad inventory. It works by auctioning each impression to the highest bidder. There are three dimensions of ad exchange includes:

  • API that you can use to collect audience-targeted data
  • Active auction pricing that the publisher can regulate.
  • Self-serving applications for ad creation, reporting and traffic management
  • Brand safety and fraud prevention

Ad exchanges enable publishers to command on the market price for their unsold inventory and help the advertisers to target and recognize all the potential customers. Dawn of ad exchanges has brought new innovative technologies to allow buyers and sellers to value inventory on a per-impression basis. It has also reduced the number of players and lowered administrative overheads on purchasing and selling.

How they are different from each other?

Ad Network: An innovated mechanism to unburden all the unsold inventory, incorporating efficiency and transparency. Most ad networks comprise of premium inventories and premium ad spots.

  • Publishers – They sell their inventory across advertisers and other networks. Sell all the unsold inventory and deliver creatives across websites.
  • Advertisers – They got inventory across a various range of publishers. They are also enabled to reach mass audiences and competence to coordinate ad campaigns across various sites.

Ad networks are often referred as blind networks or blind spots with restricted transparency because publishers have slight knowledge on who is purchasing and at in what cost, on other hand, advertisers have slight transparency on who see the ads.

Ad Exchange: Improved transparency and targeting with real data by auctioning each impression in real-time between numerous bidders. It reduces the cost of operation by direct buying and removal of intermediaries. RTB allows display inventory to be purchased via a bidding system by the individual impression that reveals in the millisecond before a webpage is loaded by a customer. The targeting and cost efficiency breakthrough offered by RTB are making it an innovative force on the online advertising platform.

  • Publishers – They are helped to maximize their value of impression by delivering or offering best price under competitive bidding.
  • Advertisers – They are enabled in data driven decision making for ad buying, budgeting and targeting. They can target customers based on rule settings with the facility to define maximum bid value for given impression. Offers flexibility to budget spends.

However, an ad exchange is transparent as compared to ad networks for both advertisers and publishers. The publisher has complete knowledge about who is buying at what cost, helps optimize inventory and an advertiser is completely aware of the impression level data to target users. One of the reasons, if not the primary reason why a user may be considering shifting from an ad network to an exchange is probably that they would like to better monetize their inventory and generate higher revenue.

How they work together?

While ad exchanges have not annihilated ad networks, however, it continues to play an essential role! During a bulk buy or sell strategy ad exchange has brought more transparency and flexibility in the programmatic world. Ad networks and ad exchange play precise roles and sticks together as industry ratifies automated and programmatic ad exchanges.

An ad exchange is a programmatic RTB exchange that ties ad networks, agencies, and DSPs with an immense global inventory in real time. It’s well-matched to relatively large or bigger publishers who involve more granular control over their ad setup.

Broadly speaking, it expands your prospects by giving you more options and control. It allows publishers to sell their inventory straight away and it is also a great decision for established brands and e-commerce players who have a lot of quality traffic. If you want to know more about it, click here for further information.