Glossary | A | Ad Exchange

What is an Ad Exchange?

Ad exchanges are marketplaces that act as an intermediary between the supply side (mobile apps) and the demand side (advertisers) in the ad buying process.  

Ad exchanges plug into supply-side platforms (SSPs) and demand-side platforms (DSPs) so that a wide variety of developers and marketers can exchange ads and ad inventory. Both DSPs and SSPs can plug into ad exchanges, ultimately creating more opportunities for developers to monetize their apps, and advertisers to efficiently find audiences.  

Ad exchanges combat bias in the buying process by adopting standards that make the exchange more transparent. For example, in ad exchanges, app developers can post the minimum price they will accept for an impression (called the “floor price”) in a real-time bidding (RTB) auction. Similarly, advertisers can set the highest price they will pay for the same impression. This allows for automatic and instantaneous ad exchanges, creating the optimal scenario for both advertisers and developers in any given transaction.  

As programmatic advertising gains prevalence, the lines between some of these entities are blurring. The fact remains that both SSPs and ad exchanges post ad inventory for sale. Also, some platforms provide more than one of these services at once, so there are some redundancies in the AdTech world. Moving forward, we can expect platforms to shift and blend, allowing for the most efficient and streamlined programmatic ad buying process possible.