The Programmatic Glossary
A practical glossary designed to help marketers, advertisers and ad-tech professionals understand the terminology that powers programmatic advertising
Programmatic
Ad Exchange
It is a space that acts as the technology-driven auction floor that connects buyers (Demand-Side Platforms or DSPs) with sellers (Supply-Side Platforms or SSPs), replacing manual negotiations. A digital marketplace where publishers sell advertising inventory and advertisers buy it automatically in real time through auctions. Think of it as a stock exchange, but instead of shares, the product being bought and sold is ad space on websites and apps.
HOW IT WORKS
When a user visits a webpage, the publisher's system sends a signal to the ad exchange saying 'I have an ad slot available.' The exchange instantly runs an auction among interested buyers. The highest bidder wins and their ad appears. All of this happens in under 200 milliseconds, before the page finishes loading.
EXAMPLE
A news website has banner ad space an ad exchange connects that space to dozens of advertisers simultaneously. A travel brand, a car company and a fashion retailer all bid at the same time. The travel brand wins the auction at $2.50 cost per mille (CPM) and their ad is shown to the reader.
RELATED TERMS
Real-time bidding (RTB) | Supply-Side Platform (SSP) | Demand-Side Platform (DSP) | Open Auction | Private Marketplace (PMP)
★ LIMELIGHT INSIGHT: Limelight connects publishers and ad networks to all major ad exchanges through a single integration, removing the complexity of managing multiple exchange relationships independently.
