Mar 1 2017
Anthony Loredo

What You Should Know About Ad Exchanges & Private Deals


Ad exchanges are not a new piece of the digital media puzzle, but they've been in focus lately as marketers continue to funnel their ad dollars through online marketplaces, while also navigating the programmatic advertising land mine that is brand safety. It can be hard, for both buyers and sellers alike, to make sense of it all. But one of the best ways to safeguard against fraudulent activity and low-quality inventory is to do your due diligence on the various ad exchanges that exist in the digital market right now.

OK. Let's go back to basics. Can you explain what an ad exchange is?

Sure thing. Picture a digital marketplace. There are no shortage of terms and pieces of technology that are part of this virtual marketplace, but to avoid further confusion, it's often easiest to think of ad exchanges as the intermediary between publishers selling their ad space through SSPs and marketers buying inventory through DSPs. An ad exchange's job is to announce each impression, in real-time, and ask buyers if they're interested in buying said impression and at which price. Keep in mind: in the automated buying world, this happens in a matter of seconds as webpages are loading.

Now I'm with you. Real-time bidding. Why the fancy word? That's just programmatic advertising, right?

Wrong. Programmatic advertising and real-time bidding (RTB) are not the same things. Programmatic is a very broad term that simply means automated technology infrastructure that enables media buying. It's the overarching umbrella term you'd use when describing automated buying, and RTB falls under that umbrella. But RTB is its own thing. In simple terms: RTB is a buying method of purchasing a single impression via an auction-based system in real-time – aka what's described above.

Alright, now I'm really with you this time. An ad exchange is just a fancier ad network, right?

Wrong again. They're similar in that both are handling massive amounts of publisher inventory. And it's easy to get them confused because ad exchanges and ad networks are providing similar offerings and services. One of the key differentiators is the fact ad networks are, on some level, more specialized than exchanges. Networks pull together inventory from groups of publishers and resell to advertisers, but an ad exchange could house inventory from multiple ad networks and plug into an SSP for an auction-based buy. An easier way to look at it: Picture the ad exchange as a shopping mall. The ad networks can be the stores or even the shoppers.

One more question.

You've been wrong twice now. Three strikes and you're out.

Are advertisers and publishers the only ones accessing and using ad exchanges?

To keep it simple and easier to digest, you should break it down into “buyer” and “seller,” and the larger point is that buyers and sellers need a tech access point. That can mean different things. For example, an advertiser could access it through an in-house bidding platform, or through a vendor’s DSP that it uses directly. Or an advertiser could work with an agency, and access exchanges through its own bidding tech, like a trading desk, or through a DSP.

There seem to be a lot of moving parts. How do you keep track of where your ads are placed?

There are a number of ways to protect your brand and have your ads appear on brand-safe and brand-friendly websites. When bidding through ad exchanges, there are pre-bid settings such as publisher blocklists – effectively selecting and screening a list of sites where you don't want your content to appear. Another way to ensure placement control is to utilize private marketplaces.

Private marketplaces? Huh?

It's not as confusing as it sounds. It doesn't matter if you're using an open marketplace or a private one: all the buying is still done via real-time bidding. The difference? Private marketplaces are customized, invitation-only marketplaces where publishers make their inventory available to a select group of buyers. A private deal typically involves a separate negotiation between a buyer and a seller to agree upon a deal. The technicalities aren't super important – it involves Deal IDs and coding – but what is important to note is the access to premium inventory that might not otherwise be available in an open marketplace that can be littered with fraudulent and unsafe sites. Private marketplaces and private deals are also beneficial to sellers (i.e. publishers). Sometimes publishers looking to monetize their inventory in open marketplaces are left with mediocre and low-paying advertisers who are on the hunt for cheap inventory.

How will I know which ad exchange is right for my company?

Like any decision that affects your business and your bottom line, there are several considerations to take into account when evaluating tech. Are you concerned careful vetting and ensuring your ads appear on appropriate sites? Are you looking to tap into a niche market and target local consumers? Are you just getting started and in need of some extra attention and service?

Centro Brand Exchange, the largest premium and private ad exchange on the market today, is built on the quality and strength of its brand-safe inventory. We connect more than 2,000 trusted journalistic news sites to demand across more than 6,000 brands. And, because our exchange is invite-only and the result of leveraging longstanding publisher relationships, we can be confident that we're offering high-quality inventory and deep access to local inventory.

In fact, Centro Brand Exchange has a 96% “Ideal" rating from Trust Metrics, as well as coverage in 98 of the top 100 DMAs, and includes the No. 1 or No. 2 newspaper site in 20 of the top 25 markets.

And, if you need a little help getting started, you can always scale your campaign initiatives with Centro's team of best-in-class digital specialists who can help you make sense of it all. Learn more about Programmatic Advertising with Centro.