The programmatic advertising world is a complicated interconnection of various parties vying for commissions from the sale of ad impressions that advertisers are willing to pay to have displayed to their target audiences. The use of advanced technologies and platforms has, until recently, only been complicating the process of ad acquisition and placement.
What An Ad Exchange Is
An Ad Exchange is a platform that provides bidding for ad impressions, as it puts up for sale impressions to visitors on publisher sites and ad networks, accepts bids from DSPs and announces a winner. The ad exchange works with the RTB ecosystem and is part of the SSP technology stack.
Owners of media sites are intensively looking for ways of increasing profits since the first display of an advertising banner, which was more than 15 years ago. Due to the fact that most of the advertising slots remained unsold, and all the money came from a small premium part that could be sold directly, advertising exchanges became an evolutionary solution to this problem.
The exchange (auction) model has already been applied on contextual advertising. As almost everywhere capitalism also reigns supreme, as on one site, a banner is worth a penny, on another it may cost a fortune, and in another case, the advertising exchange creates conditions when the price is determined by the solvency of the buyer.
The majority of transaction processes are carried out by the advertising exchange automatically. Algorithms are becoming more productive, which creates a steadily growing influx of publishers, agencies and advertisers who are abandoning the traditional model in favor of auction platforms. According to numerous forecasts, the advertising exchanges will soon take up a dominant position on the advertising market.
First of all, the advertising exchange attracts new players not by the comprehensive savings that the RTB system creates, but by the opportunity of avoiding the many intermediaries that are present in large numbers on the digital advertising market. The real revolution in their minds begins later, when it becomes clear what possibilities the use of data opens up.
The advertising exchange, like a black hole, absorbs not only digital channels, such as social networks, sites, mobile applications, and videos. Some Western television channels have already switched to this model, and broadcasting networks are next in turn.
Thus, the exchange trend in advertising is a co-directional action of factors that are beneficial to everyone:
· Fewer intermediaries, as an ad exchange is the meeting place for the advertiser’s request and the publisher’s proposal;
· Less routine, as the advertising exchange automates the main processes of the transaction and conducts them faster;
· High-precision targeting, as the user sees what he is most likely interested in;
· Fewer “advertising residuals” among publishers;
· The advertising exchange accepts placement on any budget, as sooner or later, even the most “elite” buyer will eventually visit a random site, and then the system will show them a banner at a price of a few cents.
At the moment, the Ubex team is engaged in the development of its own ad exchange. In the future, this will allow the project to connect third-party DSPs and have immense reach over an endless variety of audiences worldwide. Such an approach will further eliminate the need for intermediaries and will consolidate Ubex as a single point of entry and supply for advertisers and publishers.
