Ad tech is a very dynamic industry and the changes in it occur pretty aggressively. There’s always a new technology or a new ad format waiting to jump into the fray. Publishers and advertisers need to constantly keep track of all the new developments in the industry and have a proper understanding of the same for seamless implementation of ads. However, it might take beginners some time and effort to master all the jargon that gets thrown around in the industry daily. We, at Blognife, understand that and are always here to assist you through the process.
We have seen that ad server and ad exchange are two terms that people often use interchangeably or are not sure about their differences. With the rise of programmatic advertising, ad exchanges have become very important entities in the world of ad tech and as you must know, ad servers are essential tools that publishers have to serve ads.
In this article, we are going to discuss ad servers and ad exchanges and try to understand the difference between these two pillars of digital advertising.
An ad server is a web server that contains information about advertisements and delivers them to websites depending on various factors and constraints. Suppose a user visits the Yahoo homepage. The ad server of Yahoo will now deliver an ad to the website depending on the user’s usual browsing habits, geographical location, demographic and other factors. Ad servers successfully execute entire advertising campaigns by helping in targeting, segmentation, impressions-clicks tracking, frequency capping among others. Ad servers can properly evaluate the success of an ad campaign. Managing the ad space of a website is one of the most significant parts of running the said website. Ad servers are very instrumental in geo-tagging and demographic segmentation, the key features of online advertising. Ad servers constantly monitor campaigns for further improvements on different factors.
An ad exchange is a digital pool of ad impressions that publishers and advertisers use to sell and buy ads respectively, through real-time bidding. This kind of automated digital advertising is known as programmatic advertising. Demand-side Platform (DSP) and Supply-side Platform (SSP) are two softwares used by marketers and publishers respectively to sell or buy ads. Publishers make the ad impressions available through ad exchanges and DSPs automatically decide which impressions an advertiser should buy, depending on certain attributes such as where they’re served, and which specific users they’re being served to. An SSP is a software used by publishers to sell ads by connecting their inventories to multiple ad exchanges. Through real-time auctions, the highest bidding advertiser wins the impression.
Ad Server vs Ad Exchange
The difference between ad server and an ad exchange lies in how the process of ad serving works. Both the platforms are engaged in delivering ads to the publisher sites, but at different steps. When a user visits a website that runs multiple ads, an ad tag ( the HTML code a browser uses to fetch an advertisement from the ad server) loads and calls the ad server. Now, after getting called, the ad server registers a request and sends it to the advertisers through the ad exchange to which the publisher site is connected through an SSP. The advertisers will now bid on the request, in real time, if they are interested in serving the ad. The highest-bidding advertiser will win the ad and the page on publisher website will load with the winning advertiser’s creative. This entire process takes place in the matter of a few milliseconds in real time.
Digital advertising has been fast replacing traditional advertising formats like billboards, newspaper, TV and radio ads due to its unparalleled reach in a much more cost-effective and time-efficient way. And, new technologies come up every day to give digital advertising an upgrade. So, it is important for publishers and advertisers to have in-depth knowledge of all the important platforms associated with it. We hope this article has been helpful and will assist you in your monetization scheme.