Ad Networks vs Ad Exchanges

As the internet has developed over the last decade, advertising networks have emerged allowing publishers to just place HTML/Javascript tags on their site to display ads from a variety of advertisers to fill their inventory, and to allow advertisers to display their ads across a variety of websites in one process. In the last couple of years advertising exchanges have appeared alongside ad networks, offering an automated bidding process to let advertisers buy cheaply and effectively any unsold ad space.

Most websites utilise ad networks and exchanges in some way to monetise their content, with larger sites selling their own ads directly before sending unsold inventory to them, and smaller websites sending them most if not all their inventory from the start. However, there is some misunderstandings and overlap between the two concepts, so a longer explanation is necessary.

Ad Networks

An ad network maintains a network of websites and blogs that fulfil certain entry requirements such as content niches and traffic levels. They also build and maintain relationships with large numbers of advertisers, to which they sell the advertising inventory provided by their network of sites at varying prices and on varying terms. The advertisers’ ads are then displayed on either all or a selection of the sites within the ad network’s network of sites so as to best match the demographic that the advertiser has paid to target, which can be based around the content niche of the sites, or behavioural targeting techniques, or other factors.

As the ads are being displayed, the ad network is constantly working to optimise the campaign – removing it from sites where it is not converting and weighting it more heavily where the advertiser is getting a better ROI. Through these optimisation techniques, the ad network is able to charge higher prices for ads across its network, which then means higher eCPMs and payouts for its publishers.

Some example of ad networks are Casale Media, ValueClick Media, Tribal Fusion, and Google AdSense.

Ad Exchanges

Similarly to an ad network, an ad exchange has a roster of websites which they represent. However, ad exchanges often have much lower entry requirements or even none at all, so there tends to be many more sites involved and of a more varied quality and from more varied content niches.

Ad exchanges provide a level platform where publishers, advertisers, and ad networks can all buy and sell ad space using a real-time bidding system. Each impression is bid on separately and automatically to get the advertiser or ad network the lowest price available for the ad inventory they want to buy, and to get publishers the highest price available for the ad space they want to sell. Due to the large volume of ad inventory available on these exchanges, prices are often very attractive to advertisers, whilst they still offer publishers a way of monetising any inventory that they were not able to sell privately or through a more traditional ad network.

Some examples of ad exchanges are Right Media Exchange (Yahoo!), DoubleClick Ad Exchange (Google), AdECN (Microsoft), and Contextweb Ad Exchange).

One Response

  1. Sofía Santucho August 28, 2014

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