I’ve been thinking of putting ads on my blog and wondered how ad exchanges make money? Also, I was curious about what an ad exchange does and how it’s different than an ad network.
Ad exchanges make money through a fee for each transaction. These fees are usually less than those of an ad network.
Keep reading, and I’ll share the pros and cons of using an ad exchange on your blog. Plus, whether you should use an ad network or ad exchange, the difference, and the best ways to monetize a website.
What is an Ad Exchange?
An ad exchange is a marketplace, where advertisers are matched with content creators (I’ll call them publishers to keep things simple.)
Advertisers are buying ad space, and publishers are selling space on their websites.
An ad exchange is a middle person that helps make the deal happen. It’s very similar to a real estate agent that connects home sellers to home buyers.
The buying and selling of ad space uses a bidding process. If someone is buying ad space, they can set a floor price, the lowest they will pay for an impression.
They can also set a ceiling price, which is the highest price they will pay for it. An impression is just when someone views an ad. It doesn’t account for clicks or sales.
Also, both publishers and advertisers can set rules or criteria. Due to these criteria, some advertising space goes unused.
When it comes to the fees, an ad exchange is going to have fewer fees than an ad network. Google Ad Exchange (the largest player) has a fee of around 5% to 10% per transaction.
If you compare that to Google Ads (the Ad network), the fee is going to be around 20%. Some other popular ad exchanges are…
- Rubicon
- AppNexus
- Open X
- Smaato
- Verizon
- Pubmatic
- Smartyads
The challenge is that some ad exchanges are not very transparent with their fees. Rubicon, another popular ad exchange, was charging publishers 10-20%.
This is on top of the fees they were charging advertisers, and exactly how Rubicon calculates its fees is a mystery. You can read more about this story from this link HERE.
You might be wondering how an ad exchange is different than an ad network.
Ad Exchange vs. Ad Network
An ad exchange and an ad network are very similar.
They both allow publishers (content creators) to connect with advertisers.
The publisher wants to make money by displaying ads, and the advertiser wants to spend money to show ads.
The main difference is that with an ad network, the middle person buys all the inventory and sells it to the publisher, and includes MORE fees.
With an Ad Network, say it’s Google, they just install a website, and the advertisers and publishers set their prices and terms. Most importantly, there are fewer fees (usually).
Another very large difference is technical knowledge. If you own a website, it’s easy to get on an ad network and start to show ads.
The ad network helps you and makes it as easy as possible. With an ad exchange, you’re on your own, and it requires more technical knowledge, and it’s HARDER.
The third HUGE difference is that it’s more difficult to get on an ad exchange. (usually)
With Google Ad Exchange a website needs to have a minimum of 5 million monthly page views.
If you compare that to Google Ads (Google Ad Network) there are NO pageview requirements. The only way to get into Google Adx (Google Ad Exchange) is with a special invite.
Yeah, it’s like a secret club.
Oh, and there is one more BIG difference. An ad exchange is going to pay much more money, usually. The reason why is that the advertisers are spending more money.
Think of it as a billboard on the most popular street in Beverly Hills, CA, compared to the ghetto in a desert town. The billboard in Beverly Hills is going to be more expensive.
How to Monetize a Website with Ads?
At this point, you’re wondering how to make the “most” money from ads, right? Your first option is to choose Google Ads (Google Ad Network).
It’s easy to set up, and there are no visitor requirements. The bad news is you’re not going to make a lot of money.
Expect to earn from 0 – $4 per 1,000 page views.
Google Ads also has an option where they can put ads anywhere they want on your website. You don’t want this because it can slow down your website “a lot”.
This can hurt your user experience and rankings.
The best thing to do is just pass on Google ads. It’s better to wait until you have 1,000 – 5,000 page views per month to start putting ads on a website.
It used to be that this Ad network HERE someone needed 5,000 page views to get accepted. Now, I think that number is changed, and there is NO page view requirement.
This is so bloggers or content creators don’t give up, but see some money.
The earnings do increase and you can expect to earn $7 to $80 per 1,000 page views. More good news is the company has a plugin that helps your website with speed. Speed is important for rankings and user experience.
Apart from Ezoic other ad networks that are MUCH better than Google Ads are Mediavine and Adthrive.
Other Ways to Monetize a Blog
The next way to monetize a blog is by creating a product and then selling it to your audience. The downfall of this is “it’s a lot of work to create a product.”
There is a shortcut that I’m a massive fan of, and that is PLR or Private Label Rights.
This means you keep 100% of the money and do no work to create it. Even better news is that you can use them to grow a list, give them away, use them as bonuses to market another product, use them to grow social media channels, put affiliate links inside, and MANY more uses.
This PLR product HERE I like because it’s a video courses that have a high perceived value.
Another one that is great is this one HERE because they are prompts for AI, and since AI can be so helpful, there is value.
Lastly, I really like this website HERE, because you can sell nearly anything, anywher,e and it’s FREE until you make a sale, then they take a small percentage.
Still, it’s badass.
Another idea is to use other people’s products, and this is called affiliate marketing. I’ve made some great money with this type of marketing, and this was before a website.
Having a website does help, but if you own any social media account you can earn with affiliate marketing.
How this business model works is when you refer a visitor to a website, and if the visitor makes a purchase, you earn a percentage of it.
Heck, you could even earn money if someone fills out a FREE form for more information or downloads a FREE video game.
The interesting thing about affiliate marketing is near “all” businesses have some type of affiliate program.
This means that regardless of what niche you’re in, you can earn money. Even better news is that you can earn “more” money as an affiliate.
So ads are ok and nice, but you probably could earn MORE money with affiliate stuff.
Even better news is you don’t need a million views to do it. Even with a tiny audience, you can do ok if you build a landing page.
A landing page allows you to build a list. The reason this list is SO powerful is that you own the traffic. Once, someone goes to your website and leaves, you probably will never see them again.
With a list, you can contact them.
It’s like meeting a hot girl and getting her phone number.
Plus more benefits such as…
- Can promote multiple offers
- Can contact someone WAY in the future
- Promote your other content
- Do list swaps
- Easier to get accepted into affiliate programs
- MUCH higher conversion rate
- Great for launching products
- Get valuable feedback
- Protects you from algorithmic changes
- More personalized marketing
Even better, I’m giving away FREE guides on how to build a landing page, how to grow a list, and how to earn money from the list HERE.
In the end, the all the above approach is what I recommend.
Try to diversify and try different approaches.
I hope this blog post on how do ad exchanges make money was helpful to you. Bye for now.