Ad exchange

An ad exchange is a technology platform where digital advertising inventory is automatically bought and sold between advertisers and publishers.

How it works
Like a stock exchange, advertising inventory is often traded through auctions. In an open auction, the highest bid usually wins, but not every ad impression automatically enters that auction. Programmatic guaranteed deals are sold directly in advance, while preferred deals receive priority before the open auction takes place. Only then do the remaining bids compete.

In addition, factors such as the publisher's floor price, the relevance of the advertisement, campaign quality and brand safety determine which advertisement is ultimately displayed.

Supply-side platforms (SSPs) enable publishers to make their advertising inventory available through one or more ad exchanges. Demand-side platforms (DSPs) enable advertisers and media agencies to automatically purchase advertising inventory through one or more ad exchanges. Together, SSPs, DSPs and ad exchanges form the core of programmatic advertising.