Ad Network vs Ad Exchange vs Ad Server: Complete Guide

Ad networks, ad exchanges, ad servers — it’s difficult to keep track of all the terms used in digital advertising, particularly since these terms are often used incorrectly or mixed up within the advertising industry. So let’s start with some quick definitions:

• Ad networks bundle ad inventory from multiple publishers to sell to advertisers.

• Ad exchanges are marketplaces that host auctions between publishers and advertisers.

• Ad servers are a type of ad tech that are used to manage and serve ads.

In this guide, we dig into each of these in more detail including key differences, the pros and cons of each solution for publishers and advertisers, and where they fit into the advertising landscape. We also show how header bidding with Snigel lets you take advantage of all of the top ad networks and ad exchanges and earn more revenue.

Ad Networks

Advertising networks are a type of programmatic advertising platform that aggregates ad inventory to sell to advertisers. Effectively, they’re a middleman for ad transactions.

Some ad networks stand out from their competitors by specializing in a certain areas, such as:

• Device types, such as desktops, mobile phones, tablets, or CTV displays<

• Verticals, such as gaming or lifestyle blogging

• Ad formats, such as video ads or native ads

Pros & Cons for Publishers

Pros

• Large selection of advertisers. By joining an ad network, publishers gain automatic access to a range of advertisers without having to seek out and establish individual contracts with each advertiser.

• Efficient for publishers. Ad networks manage deals for you, so you don’t have to micromanage transactions to consistently keep a variety of ads on your site.

• Some ad strategy support. Ad networks handle certain parts of your ad strategy, such as choosing where/how to sell your ads, how much to sell them for, etc. However, as we cover in later sections, there’s a lot more to creating a successful ad strategy that they don’t help you with (e.g., where to place your ads and strategies for earning more revenue without increasing the number of ads).

Cons

• Reduced control over ads. The flip side of ad networks’ strengths is a lack of control over what ads are featured on your site. Some ad networks do provide tools for publishers to block certain ads or ad providers, but even then there’s no guarantee of getting ads that are relevant to your brand and appealing to your target audience.

• Less transparency. It can be difficult with some ad networks to know how much your ad space is going for, how much ad space was filled vs left unfilled, etc. (It can be difficult to know how much you’re supposed to be getting paid and why it’s more/less than what you expected.)

• Insufficient ad strategy support. There’s a lot to think about when it comes to optimizing your ad strategy, such as who your target audience is, ideal ad placement for your site, optimizing across device types, and much more. Without spending a lot of time figuring out every aspect of your ad strategy, you’ll be leaving money on the table. Ad networks rarely help with this, and if they do, they typically apply the same cookie cutter strategy to all publisher’s websites. In our experience, publishers can earn significantly more money with a customized ad strategy.

Pros & Cons for Advertisers

Pros

• Improved reach. By joining an ad network, you gain access to the ad inventory of a wide array of publishers. The bundles you buy are designed to display on multiple websites, broadening your reach.

• Streamlined. Programmatic advertising is much faster than manually deciding on ads and sending materials to publishers you’ve made individual deals with.

Cons

• Reduced control. Unfortunately, the convenience of ad networks comes with a tradeoff: less control over what sites your ads end up on. Though publishers must meet the ad network’s eligibility criteria — potentially including a minimum number of monthly pageviews or a minimum percent of traffic from Tier 1 GEOs — there are no guarantees your ads will end up in front of the best audience for your brand.

Ad Exchanges

Advertising exchanges are digital marketplaces in which publishers sell their ad inventory via real-time bidding (RTB). Publishers use supply side platforms (SSPs) to access ad exchanges and advertisers access ad exchanges using demand side platforms (DSPs).

Note: Ad exchanges and SSPs are often combined, so many publishers use these terms interchangeably. 

There are multiple types of ad exchanges that vary based on how accessible they are to advertisers and publishers.

• Open ad exchanges. Open ad exchanges are real-time auctions that allow any advertiser to bid on and win ad space from any publisher. These tend to result in a broad pool of bidders who nevertheless have limited knowledge about the sellers. In other words, supply and demand are both high, and advertisers aren’t likely to place high bids on relatively unknown publishers when there are plenty of other opportunities.

• Preferred ad exchanges. Preferred ad exchanges let publishers offer ad inventory to a select pool of advertisers for a set price before they send their inventory to an open or private auction.

• Private marketplaces (PMPs). In PMPs, the most exclusive type of exchange, publishers invite select advertisers to bid on specific ad inventory with a set price floor. PMPs are a good option for publishers who want more control over advertisers and ad auction terms, while advertisers know exactly who and what they’re bidding for.

Pros & Cons for Publishers

Pros

• Greater control. Publishers can choose which advertisers to work with, what style and topic of ads to accept, how much to sell the ads for, etc.

• Higher CPMs. Advertisers tend to be willing to invest more money in publishers they know cater to their target demographics, which means publishers generally get higher cost per mille (CPMs) on ad exchanges than ad networks.

Cons

• Hard to access. Most ad exchanges have difficult-to-meet entry requirements that leave out small to midsize publishers. For example, running Google ads on your site via Google AdX requires 5 million monthly pageviews, plus at least six months where your site has a minimum of 10 million ad impressions per month.

• Bigger time investment. Ad exchanges don’t come with ad strategy support, so it takes time and resources to develop a plan for managing your ad inventory (and then follow through on that).

Pros & Cons for Advertisers

Pros

• Greater control. Since advertisers are buying inventory directly from publishers, it’s easy to ensure ads only appear on brand-compatible sites whose traffic consists of your campaign’s target demographics.

• Compatible with DMPs. Most DSPs can be easily used alongside Data Management Platforms (DMPs) that can be used to collect and analyze consumer data necessary for campaign targeting.

• More transparency. Finally, ad exchanges tend to provide more metrics about ad sales and performance than ad networks, making it easier to monitor the efficacy of an ad campaign and adjust your investment in online advertising space accordingly.

Cons

• Less accessible. The preferred ad exchanges and PMPs that give you access to the largest publishers are typically not open to small and midsize advertisers.

• More costly. If you want premium inventory, you’ll need to beat all the other bidders, which might mean higher bids for individual ad spots.

• Bigger time investment. Finally, properly analyzing data, managing transactions, and adjusting digital marketing campaigns to be as cost efficient as possible takes more time and resources than ad networks.

Ad Servers

Whereas ad networks and ad exchanges are both different types of ad monetization solutions that let you buy and sell ads programmatically, ad servers are a tool used for administering and running ads.

On the publisher’s end, when a user visits the site, the publisher’s ad server implements ad tags, gathers user data, and sends a request to the advertiser’s server. Once the highest bid is confirmed, the advertiser’s server picks the best ad based on user data, the ad campaign, and the publisher’s requirements. Finally, the publisher’s server implements the ad sent by the advertiser’s ad server.

When it comes to what type of ad server is best for you, there are a few main considerations:

• Is the server included in your ad monetization solution? This should be pretty obvious when you start working with a new ad technology platform. If it’s not, just ask.

• Do you need a first- or third- party ad server? First-party ad servers are used by publishers to place the ad in front of the end-user. Third-party ad servers are used by advertisers to upload ad creatives and manage ad campaigns.

• Is hosted or self-hosted a better option for you? The answer to this one is a bit more complicated and will be covered in the next section.

Hosted vs Self-Hosted Ad Servers

Both advertisers and publishers must decide whether to use a hosted ad server (one provided and managed by another company) or whether to use an open source self-hosted server (one they implement themselves).

Here are a few considerations:

• Money. Self-hosted ad servers are typically either open source or low cost. In comparison, hosted ad servers can be quite expensive.

• Time and Expertise. Setting up and maintaining your own ad server requires a high level of technical expertise and is time-consuming.

• Control. With self-hosted ad servers, you have full control over security, how bandwidth is utilized, etc.

You can learn more about different ad servers and how to choose the best one here:
Best Ad Servers for Publishers

Note: The next section is primarily for publishers. If you’re an advertiser and would like to read more, consider our article on the best ad networks for both publishers and advertisers.

Publishers Can Access Multiple Ad Exchanges & Ad Networks with Snigel

Snigel’s header bidding solution, AdEngine, lets publishers access 50+ of the top ad exchanges and ad networks.

Not only do you get the benefits of working with all of these demand sources, but, by making all of these demand sources compete against each other, you’ll also drive up the highest bid.

Learn more: What is Header Bidding? A Comprehensive Guide for Publishers

We also help you overcome other shortcomings of ad networks and ad exchanges, namely:

• Our ad experts handle your ad strategy for you.

• You’ll have access to a full suite of advanced, AI-powered ad tech designed to help you increase revenue without harming the user experience.

• Our ad tech specialists will implement and maintain all of this ad technology for you — including serving the ads, so you won’t need a separate ad server.

Let’s dive deeper into each of those points.

Revenue-Boosting, Customizable Ad Tech

By implementing the right ad tech (and ad setup, as we’ll discuss in the next section), publishers can significantly increase ad revenue. For example, publishers see a 57% increase in ad revenue, on average, when switching to Snigel. However, most ad networks offer limited ad tech options and ad exchanges don’t offer any additional ad tech.

With Snigel, publishers have access to a full suite of advanced ad tech, such as…

• AdStream, our native video ad solution, lets you display high-quality native video ads without impacting page performance. Publishers can use AdStream to increase their revenue by 23%.

• AI bidder optimization enables faster ad load speeds by using both client- and server-side header bidding; it also connects you to the highest bidders for the user’s location. AI bidder optimization can increase publisher revenue by up to 7%.

• Dynamic floor pricing uses AI to automatically adjust your floor prices to give you higher CPMs and fill your ad inventory. Dynamic floor pricing can increase revenue by over 5%. <

• Smart refresh lets you display multiple ads, one after the other, for as long as a user stays on the page. For instance, if a user changes tabs or scrolls down, smart refresh will display a new ad. Rather than just showing a single ad per user, this can increase your revenue by 6%.

• Adblock revenue recovery automatically switches between high-paying ad formats and adblock compliant ads. This way, you’ll always get some revenue from your traffic. Adblock revenue recovery can increase your revenue by over 10%.

• And much more.

Publishers also have access to next gen ad formats, such as…

• Adaptive ads which automatically fill ad space with the size of ads that produce the highest revenue. For instance, two small ads paying $1 each will bring more revenue than one large ad for $1.50. Adaptive ads can increase your revenue by 10%–30%.

• Super adhesive ads which let you show large ads in small spaces thanks to tech that moves the ad as the user scrolls. Larger ads typically attract higher CPMs, so this can increase your revenue by up to 20%. 

• Interactive ad units which engage the user by inviting them to take a quiz, fill out a poll, or click through the ad. As users tend to look at them for longer, advertisers are willing to pay higher CPMs. Interactive ad units can typically increase revenue by up to 3%.

Finally, all of this ad tech is fully customizable. And, our ad tech specialists will implement and maintain all of it for you.

But ad tech alone isn’t enough to make the most possible money on your site; for that, you also need a robust ad strategy.

Ad Strategy Support from Dedicated Ad Operations Experts

An ad strategy needs to address factors, such as…

• Where to place your ads.

• How many ads to include on each page.

• What type of ad formats to use in specific ad spots.

• Which demand sources to connect to each ad spot.

• Whether to use ad refresh (and what type to use).

• How your ad setup for mobile should differ from your ad setup for desktop.

• How to take into account the needs of your user based on where they’re viewing your content from (e.g., India vs the US).

• What to do with unfilled ad space.

• And much more.

When publishers try to do this themselves, they typically leave money on the table because they don’t have the necessary time and expertise to make the most effective decisions.

Therefore, Snigel provides:

• Strategies tailored to your site’s goals. Our team will learn the ins and outs of your ad monetization goals, target audience, etc., and design a customized ad strategy specifically for your website.

• Dedicated ad management. Our team will implement your ad strategy for you, so you can focus on building quality content.

• Ongoing monitoring and optimization. Even after implementation, we continue to manage your ad setup. As needs and opportunities change, we adapt your ad strategy to ensure you’re always getting the maximum amount of revenue from every impression.

We Take Care of Serving Ads

If you partner with Snigel, you don’t have to worry about choosing the optimum ad server — we take care of that for you.

Snigel works with publishers who make $300/day or have high growth potential. If you’re curious about partnering with Snigel, view our case studies or get in touch today.