Home Website Monetization Ad Network vs Ad Exchange vs Ad Server: Differences and Benefits

Ad Network vs Ad Exchange vs Ad Server: Differences and Benefits

by Patrick D
Ad Exchanges in 2022

Advertisers and publishers work together to achieve a shared goal: monetizing online audiences and connecting with potential customers. So both parties need to communicate seamlessly and very quickly and profitably. That’s where the Ad Network vs Ad Exchange vs Ad Server comparison began.

Thanks to ad networks, publishers and advertisers no longer have to send each other emails and haggle about banner placement. Ad networks are now in charge of the entire process. But there are also ad exchanges where this “haggling” still happens.

In this article, we discuss the following:

  • What is an advertising network, and how does it work?
  • What is an advertising Exchange, and how does it work?
  • Differences between ad networks, ad exchanges, and ad servers
  • How to choose the right ad network for your website

Ad networks and ad exchanges offer the same stuff. They both welcome publishers offering their inventory for placing ad codes. These publishers show ads to their visitors (aka traffic). Both ad networks and ad exchange attract advertisers who set up campaigns targeting the inventory they need. Both can be linked to the demand and supply-side platforms, allowing for programmatic ad buying and selling. So it can be challenging to understand their differences.

What is an advertising network?

An advertising network acts as a middleman between advertisers and publishers. It gathers inventory from publishers and matches it to advertiser demand. Ad networks can categorize inventory based on selected audience segments. Thanks to ad networks, advertisers and publishers can interact and transact much more quickly.

How do ad networks work?

  1. Compiling inventory: the ad network compiles a growing list of publishers with inventory who are willing to sell it to buyers for a higher price, depending on which buyer is willing to pay more. In return, publishers sell traffic to advertisers via ad views and clicks. The better they are at selling traffic, the better for advertisers. This approach also increases the ad network’s credibility.
  2. Setting up the campaign: Advertisers specify their needs, such as the amount they are willing to pay per impression, their target audience, and the type of content they want to advertise. They often use the campaign-management panel of an ad network to set up the campaigns directly. The advertiser’s campaign includes the target audience, budget, frequency caps, and more.  After advertisers set up targeting and budgets, the ad network estimates how much traffic they will get and how stiff the competition for this traffic is recommending optimal bids.
  3. Providing inventory: The publisher installs the ad-network codes on their website and decides how much website space they’re ready to put for sale. Some ad networks offer the opportunity to choose the minimum CPM rate.
  4. Connecting with publishers: Once an advertiser creates a campaign, the system will automatically place the ad on the platform that meets the requirements of company managers.
  5. Choosing the highest bidder: Ad networks use algorithms to match the highest-bidding offer with the publisher’s traffic. Depending on the season and traffic quality, the highest bid may vary.
  6. Showing (Exposing) ads on publishers’ websites: The ad network transfers the advertiser’s ad creatives provided to the publisher.  As soon as users interact with the ad (e.g, ad views or clicks) all interaction data is sent back to the advertiser to track their performance.

This process has changed significantly with the advancement of technology. Dynamic marketplaces such as Supply Side Platform (SSP) and Demand Side Platform (DSP) are common in today’s digital advertising space. To sell inventory, more publishers are now using multiple ad networks.

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Why should you use ad networks?

  1. A wider range of options: When publishers and advertisers choose to buy or sell through an ad network, the number of options available to them multiplies. The auction mechanism ensures that publishers get the best price for their inventory and that advertisers are matched with premium inventory that fits their budget.
  1. Premium impressions are automatically matched. Independently finding inventory that meets your needs as an advertiser can be time-consuming and frustrating. An ad network will handle this for you; it will sift through the impressions and packages it has gathered from top-tier publishers and ensure that you have access to premium inventory.
  1. Access to unique traffic sources worldwide. They provide instant connection to millions of publishers and help business owners broaden their reach and get in touch with international audiences. At the same time, publishers can generate immediate income through ad networks by selling their inventory as soon as they create a website.
  1. They facilitate ad campaign management. Ad networks come with a variety of marketing tools for ad design and campaign tracking. Thus, business owners and marketers clearly understand how much engagement every ad they pay for generates.
  1. Robust setup settings. Advertisers can use a detailed user profile. Specifying the cost per click, the interests, and the location of desired traffic and choosing the most appealing ad type for your audience improves the efficiency of marketing efforts a great deal.
  1. No in-person interactions. Using ad networks instead of looking for advertisers allows publishers to focus on editorial planning and attracting as many readers as possible.
  1. Publishing relevant ads. Ad networks help advertisers filter ads, choose those relevant to the platform’s readers, and adhere to the editorial policy.
  1. Multiple monetization options. Publishers can charge advertisers on a pay-per-click, pay-per-view, pay-per-sale, pay-per-lead, and pay-per-install basis. Media owners are sure they leverage the full potential of their inventory.
  1. Built-in inventory management infrastructure. A built-in supply-side platform comes in handy for publishers — they can manage their inventory, track user engagement and revenue.

Adsterra helps publishers in increasing ad income. Our machine-learning algorithms, automated A/B testing, header bidding, creative ad formats, and in-house ad operations expertise enable us to accomplish this. Please don’t hesitate to get in touch with us and ask any questions you may have.

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What are advertising exchanges?

An advertising exchange is a marketplace where several parties such as publishers, advertisers, ad networks, DSPs, and others) buy and sell inventory without a middleman. Most ad exchanges run auctions and sell inventory to the highest bidder on an impression-by-impression basis using real-time bidding technology (RTB).

Benefits of ad exchanges:

Ad exchanges help publishers receive the best price for their ad space (inventory) while allowing advertisers to reach their target audience appropriately and in the proper context.

Benefits for publishers:

  • Set inventory unit minimum CPMs: filter and prevent ads with sensitive content or competitors’ ads.
  • Define the types of ads that will appear on the web page by selecting ad formats and styles.
  • Create custom corner styles, typefaces, and color combinations and apply them to multiple display ads at once.
  • Select an ad placement on a web page.

Benefits for advertisers:

  • Select targeting options, bidding capabilities, budget pacing options, and behavioral profiling and price settings for advertising.
  • Use various ad exchanges simultaneously.
  • Add particular audiences and websites to a blacklist.
  • Set a limit on how often adverts are shown to the same user.
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Types of ad exchanges

  1. Open Ad Exchange: It’s a free digital marketplace with a wide range of inventory from various publishers open to all buyers.
  2. Preferred Deal: For publishers who want to sell digital ad inventory to preferred advertisers at a negotiated fixed price.
  3. Private Marketplace (PMP): Also known as private ad exchanges, this closed platform allows publishers to choose which buyers can submit bids, under what conditions, and at what price.

Ad network vs. ad exchange: key differences

Here’s an example from the advertising industry that involves people to help you understand.

Assume that Apple is looking for a programmatic strategist to help them plan and implement their ad campaigns. There are two major alternatives to consider:

  • Ask an advertising agency for a suitable candidate.
  • Use a freelance marketplace like Upwork to find a programmatic expert.

Companies that don’t have enough time to sift through candidates and choose the best one usually hire advertising agencies. Small websites that have the time and have developed the criteria and terms of collaboration use freelance marketplaces to find a specialist who matches their needs.

When it comes to buying and selling ad inventory, almost the same factors apply. Ad networks are far better at inventory pre-segmentation, but they charge more for a smaller group of impressions. On the other hand, ad exchanges allow publishers and advertisers to work directly together and choose from a wide range of options.

Here’s a table comparing ad networks and ad exchanges

MetricAd NetworkAd Exchange
How it worksActs as a go-between for publishers and advertisers.For all market participants, it serves as an open ad marketplace.
The ad network is a company or a technological platform. For example, Adsterra.The ad exchange is more of a media-buying technology.
UsersPublishers, advertisers, and ad agencies are all involved.Publishers, advertisers, agencies, ad networks, other ad exchanges, DSPs, SSPs, and agency trading desks (ATD) are all part of the advertising ecosystem.
Key CharacteristicsThe platform provides pre-segmented ad categories for serving specific audiences. Buys and sells in large quantities. It is worth noting that more advanced ad networks (Adsterra) introduced AI algorithms for evaluating campaigns, competitor actions (CPM and CPC rates), traffic quality up to ad slots.The marketplace provides access to a diverse range of inventory. An ad exchange works based on impression-per-impression.
TransparencyNormally, advertisers and publishers don’t communicate. But advertisers are aware of which traffic sources and which ad placements send them the best traffic.Advertisers are fully aware of the publishers from whom they purchase inventory and vice versa.
PricingThe cost of inventory is determined by market demand and advertisers who place bids. Some ad networks determine the cost themselves, but that is pretty old-fashioned. The most advanced ad networks use AI algorithms to estimate the cost of traffic according to current bids and competition for traffic.The inventory cost fluctuates because it is determined by advertiser bids in a real-time bidding auction.

Ad networks and ad exchanges are quite different: each has its own set of advantages and disadvantages. You can benefit from both as an advertiser, especially if you use a DSP for automated media buying.

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What to look at before selecting an ad network

Choosing an advertising network is an easy task if you know what to look for. Here’s a quick checklist to help you choose the best ad network for your requirements:

  • Inventory quality

Different types of inventory are compatible with various ad networks. Some offer premium inventory sourced from top-tier publishers, while others sell unsold inventory. Before deciding on an ad network, make sure to assess the quality of the inventory available.

It’s critical to think about the size of the ad network you choose, as it’ll be responsible for a steady stream of customers from inorganic (paid) sources. You’ll get more traffic if it can deliver more traffic.

When creating a campaign as an advertiser, you must first determine who your target audience is. Because different ad networks support different targeting options, you must first understand the requirements of each platform before choosing an ad network. For instance, you can assess over 15 targeting options on the Adsterra Self-Serve Platform once you log in.

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  • Available formats

You might want to advertise with a simple banner or animated GIF because different ad networks offer different formats. Select a network that meets your format requirements:: Popunders, In-Page Push, Native Ads, Video Ads, etc.

When choosing an ad network, this is one of the most important factors to consider. Some may require manual, code-based integrations, whereas others are entirely plug-and-play.

Modern ad networks may be hosted in the cloud, which raises concerns about service availability. If your ad network goes down, it could cause major business disruptions, so make sure to include service availability requirements in your SLAs.

Finally, the interface should be simple, intuitive, and data-rich to provide your marketing team with the critical performance data they need without requiring time-consuming customizations.

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Types of ad networks

Ad networks shifted from a single generic platform to multiple tools to better meet the needs of both parties. Examine the main ad network types and pick the best one for you:

  • Premium ad networks. These platforms host coveted inventory. An advertiser may need to either request an invitation or pay a subscription fee to find out how to get in. Before distributing their inventory, publishers must ensure that their platform meets the network’s traffic requirements.
  • Vertical ad networks. These are niche ad networks. If an IT company wants to advertise on a tech platform, joining an IT-only ad network increases the chances of matching with relevant target audiences.
  • Inventory-specific networks. They distribute specific inventory (banners, video, mobile, etc.) to help business owners and content platform managers place and distribute a specific type of content. Examples include Verizon Media and Taboola.
  • Affiliate ad networks. Advertisers spend $6.8 billion on affiliate marketing (in-post links from advertisers). Some of these networks include ShareASale, Awin, and Amazon Associates.
  • Multi-format ad networks. These are global structures serving billions of impressions monthly. They provide partners with at least 10 ad formats: popunders, display banners, video pre-rolls, push notifications, etc. A single line of code now allows you to rotate multiple ad types. Advertisers and publishers alike benefit from innovative formats like Social Bar, which add a new dimension to their marketing efforts.
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Why are ad networks important?

Ad networks have ushered in a new era of digital advertising. They gave marketers, and inventory owners have almost limitless scalability, made it easier to design and track marketing campaigns, and fueled the entire programmatic advertising industry.

Consider the following reasons if you’re still wondering, “Why are ad networks important?”:

  1. Facilitate inventory and campaign management

Advertisers can use ad networks to connect with targeted audiences, track ad performance, and adjust bids. Publishers can manage all inventory in one place and maximize every sale.

  1. Help businesses scale advertising and promotion

Advertisers can quickly place ads on multiple platforms. Publishers can also sell dozens of spots at once. A third-party network will give both business and media owners a big-picture view of their marketing and monetization strategies.

  1. Wide range of advertising and monetization technologies

A typical advertising network is more than a database — rather a full suite of marketing software and integrations. Think about Adsterra or Facebook Ad Manager and the robust toolkits these platforms offer.

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Ad Network vs Ad Exchange vs Ad Server

Ad networks, ad servers, and ad exchanges make up ad placement, so it’s common for both advertisers and publishers to confuse them. We’ll take a closer look at the definition of the concepts and the differences between them. We already know how the definition explains what an ad network is. Now let’s consider two other concepts: ad servers and exchanges.

  • An ad server is a technology that manages, stores, and exchanges files between those who buy traffic (to rotate ads) and those who sell the traffic (expose ads to the website’s visitors).
  • Ad network is a platform that consists of an ad server, a demand-side, and a supply-side platform.
  • An ad exchange is like an ad network as both distribute inventories. The ad network dictates the cost of an inventory spot, while ad exchanges set it through real-time bidding.
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An ad network will help facilitate and scale your marketing; whether you publish an ad or sell inventory. To advertise your services or monetize your web platform safely and transparently rely on Adsterra — a reputable advertising and monetization platform with over 30 billion ad impressions monthly sent by 18K+ direct publishers.

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