Ad exchange

How it works

An exchange connects supply (publishers, or the platforms that represent them) with demand (advertisers' buying platforms and networks). For each impression, it sends a bid request describing the placement and the visitor to connected buyers, collects their bids within a short time limit, picks a winner and returns the ad. The exchange usually owns no inventory and runs no campaigns; it runs the auction and settles the money.

The difference from an ad network is mostly one of role. A network curates its own publishers and advertisers; an exchange is an open venue where many networks and platforms trade. In practice the line is blurred, since networks often buy and sell through exchanges as well.

Auction pricing

In a first-price auction the winner pays its own bid. In a second-price auction it pays a small increment above the next-highest bid. With bids of $2.00, $1.50 and $1.20 CPM, a first-price winner pays $2.00, while a second-price winner with a one-cent increment pays $1.51.

On UluMob

UluMob runs its own auction on every ad request rather than operating as an open exchange. A campaign with a fixed bid pays its bid. With the Smart CPM strategy, a CPM campaign pays one cent above the next-highest bid, never more than its own bid and never below the publisher's reserve. See RTB for how the bids are ranked.