An ad exchange is a digital marketplace where advertisers and publishers buy and sell ad inventory in real time. It acts as a bridge between DSPs and SSPs, facilitating real-time bidding (RTB) auctions. Ad exchanges aggregate inventory from multiple SSPs and make it available to DSPs, which evaluate and bid on it instantly. The winning ad is then served to the user within milliseconds. Exchanges handle billions of transactions daily, enabling scale and efficiency.
Frequently Asked Questions
How do ad exchanges determine the winning bid?
They typically use a second-price auction, where the highest bidder wins but pays just above the second-highest bid.
Are ad exchanges open or private?
They can be both—open exchanges allow all buyers, while private ones restrict access to select advertisers for premium inventory.
Do ad exchanges ensure transparency in bidding?
Leading exchanges provide detailed bid data, floor price visibility, and anti-fraud measures to ensure fair and transparent auctions.
Can advertisers blacklist domains on an ad exchange?
Yes, buyers can apply domain and app filters to avoid irrelevant or unsafe inventory before placing bids.
