Ad network VS ad exchange

When we talk about ad exchanges and ad networks, one should understand that they both work for the same goal - to offer the Advertisers ad inventory that was collected from various resources. The difference between can become subtle at all if we remember that both of variants can have programmatic element in organizing buy-sell process.

Having no idea where about purchasing inventory and where it actually comes from is important to have clear understanding of your business processes. The quicker you will understand how everything is designed, the sooner you will work on your brand improvement and your business optimization.

Definitions

If we talk about online advertising  network, in simple words, it is an intermediary between such key players as Publishers and Advertisers. The former ones offer inventory they have, the latter buy it to promote their brand and goods or services. The network itself helps to match the demand with the requirement.

Ad exchange, in its turn, can be compared with a market where all business (requirements and demands) is staffed without any third party. Vast majority of exchanges are based on real-time-bidding (RTB) technology that allows buying impressions one by one according to their features.

Comparison

If we put both trends close to each other, we will see that networks offer bulk solutions and posting on the websites where a necessary audience can be.

Exchanges invoke more personalized treatment to each impression. When it comes to the system, the Advertisers can exactly see what kind of user is in front of them, how valuable he or she is and how much they are ready to pay for particular impression. The price can be different for a display on the same website when even one component is changed. If the Advertiser is selling children’s toys, he is likely to offer highest rates for a young mother, while a teenager will be given low prices or ignored at all. Ad network will not take such details into consideration.

Main problem of networks is that too different ads can be combined on one page. A person is unlikely to be interested in teeth whitening, child’s upbringing and visiting clubs at the same time and, as a result, we get a terrible cacophony which may blind or annoy user. Growth of ad blocking software is a sad evidence that people are tired of irrelevant content distracting from their online activities.

Ad exchanges try to work, to cooperate with the user showing the ads that are supposed to be more suitable and relevant for each personal experience, online behaviour, type of the device and other important factors. Corresponding ads may become even a useful reminder to think about hobby or buying a new gadget. All the data collected for impression estimation is anonymous, cannot give even a hint about real personality and can be reseted after browser’s cookie files cleaning.

Ad exchanges are highly preferred by owners of small websites with traffic less than a thousand visitors per day. Focus on each particular client makes this point not so important, while some ad networks may have very strict requirements about minimal traffic amount.

The advertising via ad networks is more expensive as the company, as a third party, wants to get some money for the services provided and, thus, takes commission fees. Ad exchanges provide direct contact between key players that helps them to save some money and make the campaigns cheaper, that is especially important for small companies with limited advertising budgets.

Conclusion

Both of the approaches have what to learn from each other, that they are doing at the same time. We are expecting their unification quite soon to have the best possible solution at the moment. While it hasn’t happened yet, we recommend to implement both of the approaches to get maximum from your advertising campaigns.