Ad Network vs Ad Exchange: Why You Should Know About Them?

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ad network vs ad exchange

In this digital world, where technologies are evolving at an exponential speed concurrently the demand of consumer is taking new heights.

If you’re running a business in this competitive environment and want to take the opportunity offered by programmatic advertising, then it’s obvious for you to be clear with the programmatic advertising terms like ad network ad exchange difference, DSPs, SSPs and DMP.

Don’t worry; people get confused especially with ad network ad exchange difference but, the things are not as complicated as they sound. 

For a better understanding of ad network & ad exchange differences. let’s first have a glance at the evolution of these terms with their clear definitions.

What is Ad Network?

In order to know ad network vs ad exchange difference, it’s obvious for you to know them individually. An ad network is a platform that allows publishers to sell their ad inventory to the advertisers/buyers/marketers/agencies. Ad networks collect the ad space from the publishers, segment the ad space based on specific parameters of an audience like their demographics, geolocation, behaviour, interest, experience, and similar other factors.

Concerning publishers, the ad network is a platform that helps them to sell their ad inventory in an efficient way which is hard to sell by directly contacting the advertisers (also referred as unsold, non-premium inventory). Publishers can directly connect with the ad network or with the help of SSP’s to sell their ad space.

Concerning advertisers, the ad network is a platform that can enable them to select ad space from a wide range of publishers and also to get the ad space, which is intended for their targeted audience. As ad network segment the audience based on some specific parameters. It will be easy for advertisers to target audience based on their current needed audience in an effective way for different ad campaigns. Reaching individual publishers for particular ad space is not going to happen in a real-time scenario. Because in the market, you have a list of publishers with an ample amount of ad inventory only in your targeted niche.

What is Ad Exchange?

Even though, all the long ad network is the good platform for the publisher and advertiser to sell and buy ad inventories. Still, there are many ad spaces left unsold.

Ad exchange came in to picture to resolve this issue; it’s also same as ad network with some little difference. Ad exchanges also follow the real-time bidding process and sell ad space based on impression in bulk.

In ad exchanges, the highest bidder/or most interested advertiser for that ad space will win the auction.

Concerning publishers, ad exchanges help them to get maximum value for their ad inventory because it is auctioned to the highest bidder.

In terms of advertisers, ad exchanges helped them to spend the right amount for ad space.

What is DSP?

Demand Side Platform (DSP) helps the advertisers to manage, buy and maximize programmatic inventory from various ad exchanges, ad networks, or SSPs via a single interface. DSP, when integrated with an ad exchange, it analyses different parameters based on geographic, demographic, behaviour, interest, and other factors. This analysis helps the advertiser to buy ad inventory from a wide range of publisher sites that targets a specific audience.

What is SSP?

Contrary to DSP, SSP is a supply-side-platform, it’s used by the publishers to automate their ad space selling process. SSPs aggregate supply or ad inventories from various publishers or mobile app developers and give them to an ad exchange or a DSP for enabling demand. If integrated with the RTB (Real-Time Bidding) process, SSP helps the publishers to gain the maximum amount for their ad spaces.

What is DMP?

Data Management Platform (DMP) makes the information in a ready-to-use way for advertisers, publishers and different experts that sort, examine and get user bits of knowledge which help in getting possible metrics.

It functions as a one-stop for advertisers to access and deal with the audience information, for example, cookie ID’s, Ad Id’s, and mobile ID’s to generate targeting segments for programmatic advertising campaigns.

How does this programmatic advertising work?

Whenever the audience visits the website, the publisher provides the ad inventory dimensions to the SSP. Following this, SSP analyses audience data and determines the most relevant ad to display and the amount for the ad space.

Then DSP evaluates the value for that website ad space and offers a bid amount. SSP selects the highest bid, which shows more interested in that ad space and displays the ad of the bid winner on that particular ad space. All this process carried out in a period of milliseconds. This below figure will clear you with the complete programmatic advertising process and ad network ad exchange difference.

programmatic advertising Model

Ad Network vs Ad Exchange

The below table can give you a clear picture of ad network vs ad exchange.

Add Network
Add Exchange
Definition:
An ad network is a platform that collects the ad space from the publishers and segments it based on some specific parameters and sells it to the advertisers.

Ad exchanges are a platform where publishers and advertisers/agencies/DSPs/marketers can sell or buy ad space and work by auctioning the ad space to the highest bidder.

Ad exchanges work on competitive bidding and provide transparency to publisher and advertiser with the information who purchased or sold the ad inventory at which ad space and even the bidding amount.

Whereas in Ad network you don’t have this much transparency, publisher or advertisers will not get that information which lacks their confidence.

Ad space category:
An ad network is mostly non-premium/remnant inventory.
An ad exchange is non-premium/remnant inventory, but it is mostly used for the lowest denominator ad formats.
Ad Target:
Ad network buys or sells ad spaces in bulk mostly contextual. The ad networks provide various ways to target a specific audience including- RON (Ron all sites on the network), IAB categories (Vertical), ROS( Run on particular sites on the network), browser type, Geo-location, and specific time of the day. These clearly means that in the ad network, you can target based on sites, browsers, etc. to find your intended users. 
Ad exchange buys or sells ad space on impression base mostly behavioural. The ad exchanges permit advertisers to bid for impressions depending on the user data and context. Ad exchange provides cookie syncing process; thus, make sure the intended users are targeted with the relevant ads.
Key players:
Media.net, Adbuff, BuySellAds, Conversant Media, Criteo, Propeller Ads, Exponential and others.
Google Ad Exchange, OpenX, Rubicon Project, AppNexus, Verizon, Media, PubMatic and others.
Pricing:
When it comes to the pricing Ad network, do negotiation based on ad space.

Adv. They gather ad space, bundled them based on vertical, context, etc. and sell it to the advertisers in the majority. Sometimes, the ad network algorithm decides the price.

Ad exchange does negotiation based on market/competition led to real-time bidding. Ad exchanges buy or sell ad impressions in real-time considering on the user data and some other factors. The competition in the market decides the price of the impressions.
Key challenges:
In Ad networks, publishers have to put more time and efforts to sell and deliver. And face the challenges of less transparency and inability to optimize ad space for best advertisers. On the other side, Advertisers also need to put more time and efforts to buy and follow ads and has to face the challenge with a limited view on the quality of ad space and its performance.
In Ad exchange, publisher revenue possibility remains challenging, and for advertisers, they may encounter challenges related to the quality of the ad space.
Transparency Factor:
An ad network is generally referred to as blind networks because the publisher doesn’t know about who is purchasing their ad space at what cost. And advertiser also won’t have any information regarding who sees their ads.
An ad exchange is more transparent because publishers will get information about who is buying their inventory at what cost and helps them in optimize inventory. And advertisers also get ad impressions to their targeted audience.

Why should you know about Ad network Ad exchange difference?

In the traditional days, people are not pretty active online, so the advertisers used to purchase ad inventory in TV’s, Radio and Newspapers. Now people are more dependent on online for getting information even for their basic needs like shopping, locating a restaurant, ordering food, booking a cab, social media chat and many others in their day to day activities. So advertisers are more inclined towards the programmatic advertising.

Similarly, in traditional days, advertisers used to buy ad space directly from the publishers. Presently with the expansion in the number of websites and demand for ad space leads to the damn need for the advertisers/agencies/marketers to know about ad network vs ad exchange terms for cost-effectively investing their amount.

It’s significant to understand the ad exchange ad network difference. The knowledge about Ad network vs ad exchange is the basic thing that helps industries to make better decisions towards programmatic advertising. It helps you in deciding which one suits your business at various circumstances. To your knowledge, an ad exchange frequently operates as mediators for ad networks.

To Conclude

Automation in marketing technology leads to an ample of opportunities for marketers to target their users.

But how far you can take this opportunity and benefit out of it without knowing its basics.

Ad network ad exchange difference, DSPs, SSPs and DMP, are the basic terms to understand before you start with programmatic advertising.

Ad network and Ad exchange both are the platforms that help the advertisers and publishers to buy or sell ad space.

But there are some slight changes between the two which make them useful for different marketing purposes. Knowing about ad network vs ad exchange will really help the advertiser in performing programmatic advertising.

We can’t say which one is better for your business unless you are clear with ad network vs ad exchange difference and how it works.

Thus, it becomes a need for the marketers and publishers to know about ad network vs ad exchange, to better implement it in their marketing strategy according to their business. You can go through the Martech Leader website for getting better insight and news about advanced marketing technologies in the market.

Hope this article has given a clear insight of Ad network vs Ad exchange and reason to know about them.

Kindly share your knowledge with us regarding Ad network vs Ad exchange topic.

We are here to learn and share the knowledge!

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