In between the advertiser and the publisher is the ad exchange. You can think of the ad exchange like a market with vendors and buyers.
The whole process, from an app user triggering an ad request to the bidding process to the placement of the ad, happens in just 200 milliseconds.
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This also gives marketers the agility to pivot quickly if their campaign isn't performing as expected. For instance, you might find that switching out one keyword for another may boost your campaign's performance and align better with the audience you want to reach.
Also interacting with Ad Exchanges are Ad Networks which aggregate ad inventory on ad exchanges, segment it according to demographics, context and other criteria and sell it to advertisers for commission.
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The real-time bidding process starts when a visitor opens a publisher’s website. The whole process takes less than 100 milliseconds, but a lot happens during that time: A site sends an ad request to an SSP when there’s a chance to show an ad to a visitor. The SSP collects the data about the visitor (cookies, location, etc.) and website the ad space to pass it on to an ad exchange. The ad exchange broadcasts the information about this ad opportunity to several DSPs.
It’s hard to believe that at one point—and not too long ago, either—ad inventory could only be bought or sold when two people picked up a phone to complete the transaction. Today, ad impressions are sold and purchased at an astonishing rate and at faster speeds than the human brain can comprehend.
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Demand-side platforms play a similar role for advertisers as SSPs do for publishers. They are automation tools which allow advertisers to effectively manage, analyse, optimize and run their advertising campaigns over many different networks.
Here’s how they differ. In traditional RTB, the program evaluates bid requests from advertisers sequentially — if Buyer 1 doesn’t meet the floor price, the request moves on to Buyer 2, and so on, until the floor price is met.
Through programmatic advertising and an exchange, the advertisers can determine which users are the most valuable and then adjust bidding accordingly.