Friday, 19 June 2015

Programmatic Advertising 101: 4

Key players of Programmatic Ad Buying: Advertising Exchange

An online advertising exchange is a technology platform that connects digital media buyers and sellers to facilitate the commercial transaction between the parties.

The purchase price, determined in CPM (Cost Per Thousand (mega)), can be auction based or pre-negotiated and can vary depending on for example:
- the website (premium sites will command a higher CPM rate)
- the ad format (video is more expensive than standard banner display)
- overall market competition (supply vs demand), which can impact volume of impressions won by an advertiser on real time auction
- targeting (the more targeting applied, the narrower the pool of inventory that matches the requirements, which can also push the price up)

Major Ad Exchanges with global reach include AdX (by Google), PubMatic, The Rubicon Project, Open X, and AppNexus, just to name a few. The way they make money is through a commission on each of the transaction that they facilitate.

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