Ad exchanges are virtual marketplaces that conduct automatic auctions and broker advertising deals worldwide. They are the pillars of modern advertising, and there is absolutely no escaping them if you need to reach diverse audiences for your programmatic campaigns or to get sufficient fill rates for your ad spaces.
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Rise of ad exchanges
Before the 2010s, the advertising industry relied on ad networks, which replaced the incredibly non-transparent system of direct media trading and made digital advertising a coherent marketplace. Nevertheless, ad networks could only provide a limited scope and had difficulties with external integrations.
Competitive landscape of ad exchanges
The market-leading ad exchange is the Google-owned DoubleClick Ad Exchange (AdX). Other prominent ad exchanges include AppNexus and OpenX, which, together with DoubleClick, comprise up to a 74% share of the ad exchange market.
The market share varies significantly across the globe. Asian markets usually have distinct adtech ecosystems with native ad exchanges. In China, Baidu, the Chinese equivalent of Google, holds the biggest share of the programmatic market with its Baidu Exchange Service.
The benefits of ad exchanges are hard to underestimate. Publishers get the opportunity to maximize the sale of all of their ad spaces with global demand. At the same time, advertisers have the opportunity to buy millions of impressions at low bids on open exchanges or get placements from premium publishers through programmatic direct.
There are certainly some bad apples among ad exchanges, but they do not characterize the industry as a whole. Ad exchanges evolved and implemented safety standards that boosted transparency, traffic quality, and bandwidth. Many of them rebranded as SSPs or invented a different title, but at the core, all leading programmatic players are still ad exchanges.