In the early times, the ad inventory was sold and bought through internal sales teams and it was the best way to review and predict the buys against specific ad inventory at that time. Later on, as the volumes of ads and ad spaces grew it became difficult to manage things with this methodology. Publishers started facing difficulty to engage multiple advertisers to sell their inventory and even the advertisers had to face different problems in finding publishers for their ad display needs. Managing inventory became rather complex with blogs, social networking sites, user generated content and news portals expanding day after day. Hence, this lead to the invention of technology that can aggregate, categorize and offer inventory to run advertising campaigns and this technology is the Ad Network.

With the introduction of the ad networks, inventory management, selling and buying tasks were rather simplified. But still there were few loopholes uncovered. The publishers often faced an issue of unsold inventory, while the advertisers were lead to make bulk and unnecessary buys as this was not a transparent mechanism. Hence, there came a better and new technology called Ad Exchanges with transparency and thus allowed for behavioral targeting for the advertisers and management of unsold inventory for the publishers.

Both Ad Networks and Ad Exchanges provide a mechanism for buying and selling ad space online, but still there are a few major differences between the two. Let’s see what they are.

Marketplace:

While Ad Network is a controlled marketplace between advertisers and sellers for ad inventory buy and sell needs, Ad Exchange provides an open, digital and a transparent marketplace that allows advertisers and publishers to buy and sell ad space through online auctions. It works by auctioning every impression to the highest bidder.

Transparency:

Ad networks are often referred as the blind networks because of their limited or negligible transparency. They provide little knowledge to the publishers on who is buying their ad inventory and at what cost while the advertisers will also have limited knowledge on who views their ads in the networks. Compared to the networks, Ad Exchanges are highly transparent similar to stock exchange. They give complete knowledge of who is buying the inventory and their costs to the publishers while the advertisers will get clear knowledge of impressions to target specific users.

Key Advantages:

For publishers, ad networks help them sell inventory across various advertisers and other networks. With networks, publishers can effectively manage and sell their unsold inventory. On the other hand, ad exchanges will help publishers earn better for their ad inventory by getting maximum value of the impressions due to competitive online bidding.

For advertisers, ad networks will enable reach across multiple publishers for inventory buying and can also increase efficiency to conduct ad campaigns across websites. On the other hand, ad exchanges will enable advertisers to take better decisions for ad buying, targeting and budgeting needs. They will now get the ability to target users based on behavioral targeting.

So, both ad networks and ad exchanges are different and are the means for buying and selling ad inventory between advertisers and publishers.

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