Ad exchanges are platforms that bring advertisers and publishers together to make a transaction. There are three types of programmatic ad exchanges available:
• Open Exchanges/Real-Time Bidding (RTB) – This ad exchange offers a low-priced inventory but a large number of competitors, as all buying platforms have access to this auction type. The pricing of ad spots is based on an auction format.
• Private Marketplace Exchange (PMP) – Buyers can only gain access to this exchange through invitation. This means that there are limited buyers within the auction place. Due to the exclusivity of the exchange, the inventory is higher priced; however, the quality of inventory is better than RTB. The pricing of ad spots is based on a pre-agreement between the buyer and seller.
• Programmatic Direct Exchange – With this type of ad exchange, inventory is sold directly from the publisher to the advertiser with guaranteed inventory and pricing. This method is ideal for brand safety. Due to a guaranteed inventory, the pricing of ad spots is typically higher than RTP and PMP exchanges.