If you are familiar with digital marketing then you must have come across the word ‘ad exchange’ in your daily coffee conversations. Just like how a marketplace is a platform that brings together buyers and sellers, similarly, ad exchange is a marketplace for online advertisements.

To elaborate further, an ad exchange is a virtual market where publishers and advertisers are brought together on the same platform, to interact and participate in online display advertising from a list of participating sites. An ad exchange enables buying of high-volume, low-price inventory, that too in real time.

This exchange of online ads is carried out in a competitive auction-based manner where publishers place their unsold ad inventory and buyers can bid on this inventory through an automated interface. A publisher that owns the ad exchange site requests for ads to be placed.

The greatest advantage of ad exchange is that it eliminates redundant middlemen which in this case are ad networks, from the entire ad buying and selling process. It connects the two parties—advertisers and publishers, directly, enhance transparency and most importantly, it controls costs from shooting through the roof as the entire process is controlled through an automated bidding system.

An ad exchange is advantageous not just big companies but also for an average website owner who wants to earn additional income through giving space on his websites for online advertisements. With ad exchanges in place, he no longer needs to pitch for ads, build its own clientele, and do the maths to come up with monetization figures that make business sense, or even pay a cut to middlemen in the process. With ad exchanges, half is job is done. All one needs to do is enrol in an ad exchange.

You are thus not only saved from finding and managing advertisers, but you are in fact able to maintain a steady stream of income to cover your operational costs and even some more. With ad exchanges, small time website owners can turn their business into hugely profitable models by getting ads placed on their websites.

Ad exchanges want that the ads that are placed on any website should perform. This means they have built-in algorithms to ensure that the ads are of high quality, well targeted and relevant to website visitors, so that more and more clicks are generated. Through ad exchanges you can connect to a large number of advertisers. Ad exchanges enable you to connect to global traffic. These exchanges will have a wide array of ads, and thus can align varied mix of advertisements on your site. This in turn ensures higher click-through rate for the ads placed in your website, leading to more revenue through ads.

Ad exchanges work great for the average website owner because on doesn’t need selling skills. With ad exchanges in place, you don’t need to bargain and negotiate with advertisers. The ads are placed on the website through an automated network, and at a non-negotiable fixed price.

Transparency is another major advantage. Ad exchanges enables advertisers a complete view of where their ads would be featured or the pages that are currently running in. This lets the advertisers give a view of potential ad performance, and get know exactly what is working and what needs to be changed. Some ad exchanges take transparency to a whole new level by allowing advertisers to see their competitors’ bids.

Another significant advantage of using AdServer Solutions is that your operations are rendered cheap. Inventory on ad exchanges can be purchased for very low CPMs, often below $0.50. Even banners with a low click rate can deliver a very low cost per click.

In a nutshell, ad exchanges enable seamless interaction and collaboration between publishers and advertisers, leveraging technology. It cuts down unnecessary operational costs and allows publishers to get the best price for their ad space and lets advertisers target relevant users.