When ad networks alone are not enough to sell all of your ad inventory, ad exchanges step in to help you maximize the money you make. Put simply, ad exchanges work on the same idea as stock markets. They allow buyers to bid on your inventory, and the demand for your inventory determines the price at which you can sell it.
Photo credit: Travel Aficionado edited by Andre Deutmeyer
Making a living as an independent web publisher means that you have to do one thing very well: monetizing your content. Google AdSense is where most publishers start because it is easy to set up. But how do you do ensure that you are getting top dollar for your ad inventory?
Joining a vertical ad network to sell your inventory is a good idea. But the problem with ad networks is that even if they are good, you will have a hard time selling 100% of your ad inventory all the time, and there is no easy way to know if you are getting the most you can out of your available ad inventory.
Ad networks play an important role in bringing you and similar web publishers together with online advertisers. But because ad networks are typically disconnected from the rest of the market (i.e. any given network only works with a small percentage of the available advertisers and publishers, rather than the whole market), they can limit profitability because they offer limited supply and demand. For publishers who link or daisy chain ad networks together, manually prioritizing ad inventory to networks can be a hassle. And there is no way to guarantee that your set up is making you the most money.
This is where the ad exchange steps in. In the exchange, all market players - advertisers, publishers, and networks - are interconnected on a common platform. If your ad spot can't be sold at a premium price set by you, it is auctioned off in the exchange. You set the minimum bid price and then simple supply and demand economics take over. All advertisers have access to and compete for your ad spots in real-time. The advertiser with the highest bid purchases any given ad spot and the process begins anew as your ad inventory opens up.
Currently, ad exchanges seem to be relegated to the remnant ad market (the leftover ad inventory spaces available on your site). But the real potential for online ad exchanges lies in not just maximizing the return on your remnant ad inventory, but in opening up your entire ad inventory to real-time bidding.
If you have ever considered using an ad exchange... or even if you have never considered using an ad exchange and you have no idea where to start and what to look for, then there is no better place to start than here.
In this article I have brought together some of the largest ad exchanges - AdBrite, ContextWeb's ADSDAQ, Yahoo's RightMedia Exchange, and Google's DoubleClick Advertising Exchange - with some of the newest entrants into the ad exchange space - TRAFFIQ and Turn - for a comparison of their unique traits and characteristics.
If you are looking for ways to improve the monetization of your existing site and are caressing the idea of opening up your ad inventory placement opportunities to real-time bidding then you may find some useful information in this guide..
The ad exchanges reviewed below were selected because they allow independent publishers to submit their ad inventory directly to the exchanges.
AdBrite ad exchange aggregates more than 45,000 publishers including big names like LinkedIn and the Drudge Report as well as thousands of long tail small niche publishers with over 7000 advertisers including big brands like Verizon and the US Navy. Additionally, AdBrite teams up with over 20 of the leading ad networks, thus helping to ensure a dynamic marketplace for ad trading.
Every ad that is served is served on a eCPM (effective CPM) basis. So it doesn’t matter whether or not the ad being served is a CPM, CPC, or CPA ad, each is converted to eCPM to determine which ad will be the most profitable for you. Each time there is a page view, AdBrite calculates the demographics and geo-location of the user, the contextual meaning of the page and other factors, and runs an auction for all interested advertisers.
The AdBrite ad exchange service can be integrated with other ad management platforms. And AdBrite serves both your standard graphical display ads and rich media ads; text ads like Google AdSense; as well as interactive interstitial ads (full page ads).
Publishers have complete control over the ads to be displayed. You can review and if necessary remove any ad before or after it appears on your site. Furthermore to maximize revenue you can set your own reserve price. For example, if you believe that you could make a minimum of $2 CPM for a specific ad spot, you would set your reserve price at $2. If AdBrite can’t beat the reserve price, your backup network (Google AdSense or another of your choice) will fill the ad spot. Additionally you can control the look and feel of ads so that the ads best fit your site design.
Unique Feature: With one snippet of AdBrite HTML code, each publisher has the choice of displaying banner ads, rich media ads, text ads, inline ads (double-underlined words that display a relevant ad when the mouse hovers over it) or full-page interstitial ads. Additionally, AdBrite InVideo enables ads in videos, and BritePic enables advertising on still images.
All AdBrite features can be accessed by anyone, instantly, using a self-service interface at http://www.adbrite.com/.
Since its inception in early 2005, the ADSDAQ (think NASDAQ for ads) ad exchange was built by offering a CPM AskPrice to publishers. ADSDAQ offers a self-service desk for publishers, which allows smaller, long-tail publishers to take advantage of market dynamics to sell off their ad inventory.
The ad exchange brings together more than 7,000 publishers, including 100 of the comScore 250 websites, including Fox News, Accuweather, and Belo Interactive Media and many smaller niche sites with interactive ad agencies, including Digitas and Modem Media (Publicis), Agency.com (Omnicom), and more than 350 advertisers run on the ADSDAQ exchange, including some of the biggest brands in automotive, pharmaceuticals, travel, consumer electronics, insurance and financial services.
ADSDAQ only sells graphical display ads. ADSDAQ support standard IAB sizes and runs standard graphical and various rich media formats.
If ADSDAQ is unable to clear inventory at the publisher AskPrice, ADSDAQ enables each one to specify backup networks such as BURST, Tribal Fusion, Google AdSense and many others to sell your remnant inventory.
However, ADSDAQ touts itself as an ad exchange for premium ad inventory, not remnant. Since the publishers will set their CPM AskPrice, the ADSDAQ exchange is a first stop for inventory prior to a publisher's ad network remnant alternatives.
Unique Feature: One of the things that make ADSDAQ unique is that it has focused on direct relationships with ad agencies, advertisers and publishers rather than working with existing ad networks like the other ad exchanges do.
Contact one of the ADSDAQ representatives for more information at http://exchange.contextweb.com/sellingdesk/
Bought by Google in 2007, the DoubleClick ad exchange brings together some of the largest publishers on the web with advertising from top firms representing a broad range of established Fortune 500 companies and newer, upstart brands. Additonally, DoubleClick works with ad networks to ensure a dynamic market driven trading environment for all.
Although, the DoubleClick ad exchange tends to focus on large scale publishers, smaller niche publishers can also use the marketplace to sell their inventory.
For publishers, DoubleClick Advertising Exchange attempts to generate maximum possible revenue for every single ad impression. The system enables sellers to dynamically allocate inventory to the highest-paying sales channel, rendering obsolete the arbitrary "premium" vs. "non-premium" (or "remnant") inventory distinctions. Publishers will always get the highest paying ad in the market.
DoubleClick Advertising Exchange now supports the buying and selling of all standard types of online display advertising. However, the exchange was built to support a range of inventory, including graphical, video, and even in-game ads.
The advertising exchange is tightly integrated with DoubleClick's existing DART ad management platform, enabling yield maximization across sales channels for sellers, as well as shared creatives, advertisers, Spotlight Tags and audience targeting for buyers. Dynamic allocation: For publishers, DoubleClick Advertising Exchange automatically determines how to generate the highest return for every impression by dynamically allocating to the highest paying sales channel.
Publishers benefit from complete control over to whom impressions are sold, what ads are run and at what price. DoubleClick Advertising Exchange provides a single billing and payment point for all transactions, so you receive a single aggregate payment for all ads served, regardless of the number of buyers.
DoubleClick ad exchange does not integrate with other ad management platforms easily, but if you use DoubleClick's ad management platforms and DART then the integration is seamless.
In order to sign up for DoubleClick, you must contact a representative at http://doubleclick.com
Right Media Exchange is considered to be the founding father of the ad exchanges. Launched in 2005 and bought by Yahoo in 2007, Right Media Exchange works with top-tier publishers like Tickle, Looksmart, Fox, Yahoo! (obviously), and thousands of smaller, niche publishers on their direct media exchange platform. On the advertising side of this equation, Right Media works with the top 10 ad agencies in the US, as well as a range of ad networks including Revenue Science and Adtegrity.
Right Media facilitates transactions for all rich media, graphical, and text based IAB-approved ad units.
Right Media provides an extensive set of classification and protection mechanisms for both buyers and sellers in the exchange. Ads and sites can be filtered using approximately 160 different attributes. Furthermore, before any ad is served it is scrutinized by an automated (creative tester) and human review process to stop potentially harmful creative from flowing through the exchange and ending up on your site.
Like most of the ad exchanges featured here, Right Media makes its money by taking a cut of each transaction from ad networks and publishers.
Unique Feature: Right Media offers APIs to outside developers. The APIs allow businesses to seamlessly plug into and develop technology for the exchange so that a tremendous amount of new services and value can be brought to the exchange community by third party developers.
To sign up for the Right Media Exchange, go to https://direct.rightmedia.com/tour/index3.php
TRAFFIQ is one of the newest entrants into the ad exchange space, but has already been selected for the Silicon Alley Insider 25 list honoring the world's most valuable digital startups. TRAFFIQ is a self-serve platform designed to help publishers of all sizes sell their inventory to advertisers.
Since launching in August 2007, TRAFFIQ has brought together 1,500 brand name and quality niche publishers with more than 400 leading agencies and advertisers. TRAFFIQ partners include most of Fortune 1000 advertisers, mid-size advertisers, and premium and niche publishers, including: Federated Media, Healthcentral.com, Sky Sports, PerezHilton, and more.
Using TRAFFIQ publishers can setup storefronts, segment, bundle, and list their inventory according to highly targeted premium and niche attributes. TRAFFIQ also offers full-path conversion tracking and reporting which allows publishers to completely capture of the full path of user engagement allowing publishers to gain a deeper understanding of the role of their inventory relative to other touch points, and price their inventory accordingly.
Because TRAFFIQ allows publishers a lot of flexibility to describe their audience, advertisers can more easily match their preferences with your ad inventory. Advertisers are happy because they can easily launch highly targeted advertising campaigns ensuring that the ads are placed on a pre-approved list of sites and publishers. Publishers benefit because they get highly relevant ads.
Like DoubleClick, TRAFFIQ handles all reconciliation and billing, so that publishers receive one check with all their ad revenue, rather than having to receive a separate check from each advertiser. And like the other ad exchanges reviewed here, there is no upfront cost to join TRAFFIQ, instead sellers pay a fixed percent commission on ads sold.
Unique Feature: Using the publisher storefront, TRAFFIQ can serve as a rudimentary futures markets, letting publishers sell ad space several months in advance.
To find out more about TRAFFIQ check out https://itx.traffiq.com/register/default.aspx
The Turn Smart Market is the other new entrant into the ad exchange space. Turn targets mid-size to larger publishers typically generating at least 100,000 ad impression per month. But any publisher can technically become a participant in the market, regardless of size, if the site is well built and serves a targetable niche.
The Turn web-based publisher console gives you control over which advertisers, ad types, and ads are delivered to your website.
Turn provides a single billing and payment point for all transactions, so you receive a single aggregate payment for all ads served within 30 days of the last day of the month in which ads were served.
The Turn Smart Market is a “revenue ranked” auction, in which the ad with the highest predicted eCPM (effective CPM) wins the auction. As such the ad exchange can basically any type of ad, regardless of pricing structute (CPM, CPC, and CPA pricing). For every ad served, Turn automatically calculates the eCPM real-time, ranks every eligible ad, and the one with the highest eCPM wins the auction.
To find out more information about Turn, visit http://www.turn.com/corp/publishers/publishers-overview.jsp
N.B.: One ad exchange that I would have liked to include in this guide is Microsoft's AdECN. Although Microsoft’s AdECN is one of the largest ad exchanges, AdECN Exchange offers membership only to advertising networks, advertiser and publisher brokers, and agencies. According to their website, in order to remain "neutral and not compete with its members, AdECN does not work directly with advertisers or publishers". Because AdECN does not allow publishers to join the ad exchange directly, AdECN was not reviewed here.
Would you like to suggest other ad exchange solutions? Would you like to share your own experiences with any of the ad exchanges reviewed? Please leave a comment below.
Originally written by Andre Deutmeyer for MasterNewMedia and first published on January 5th 2009 as Advertising Exchange: Ad Exchanges Open Up Your Ad Inventory To Real-Time Bidding - Best Ad Exchanges Reviewed