Introducing Smart Exchange: An intelligent way to deliver performance in a changing world

The ad tech industry is undergoing seismic changes to audience targeting and tracking, producing a power shift to the sell side. Here are a couple of notable high-impact developments. Apple’s changes to device IDs have made it increasingly difficult for advertisers to target audiences. Chrome’s eventual deprecation of cookies is likely to make the industry’s ability to know audiences even more challenging. Publishers have been playing and will continue to play an outsized role in defining and curating their audiences for advertisers to target. They’re not the only ones.

Ad exchanges must rise to the occasion, too. They can no longer operate as simple pipes connecting DSPs with publishers. Instead, ad exchanges should provide added value for advertisers and publishers alike. Our Smart Exchange, part of the Yahoo Exchange, is ready to do so.

What is the Smart Exchange?

Our Smart Exchange leverages experimentation and machine learning to drive efficient media buying for DSPs and advertisers and increased yield for our third-party publisher partners. Two of the core features are smart filtering and margin optimization.

Smart filtering uses machine learning algorithms to optimize ad requests based on which will generate the most interest from DSPs. This maximizes our exchange’s capacity to take on and monetize a higher-quality publisher supply. For advertisers, it presents better-quality opportunities to target their audiences in premium environments. And for publishers, smart filtering improves how DSPs perceive their traffic. Publishers using smart filtering have seen significant increases in bid response rates, fill rates and eCPM.

Margin optimization cements our exchange’s competitive advantage in header bidding auctions. It leverages impression-level margin adjustments that improve the Yahoo Exchange’s ability to win such auctions, which has a dual benefit for advertisers and publishers. Advertisers are better positioned to compete in header bidding auctions, while publishers see increased revenue for each impression sold.

Increasing value for advertisers and publishers

Ad tech is undergoing a paradigm shift, and every actor in the supply chain has a role in shaping the industry’s future. Ad exchanges play a unique role in providing more value to publishers and advertisers: curating, monetizing and analyzing publishers’ rich first-party data, while helping advertisers be more competitive and efficient in the auction.

We’re proud to stay ahead of the industry’s changes with Smart Exchange. It’s just a sample of our exciting work to help you maximize monetization. And with our new VP of Product, Prashant Chaudhary, leading our supply product management team, it’s full speed ahead with delivering more value to our advertisers and publishers.

Whether you’re a publisher who wants to monetize with an ad exchange built for publishers by a publisher or an advertiser looking to reach audiences in premium environments efficiently, let’s connect today.