#adexchanges

Google Adwords is broadly speaking an AdNetwork with a direct relationship with two supply side networks "Google AdSense" and the largest publisher "Google Search". Google AdSense has a relationship with other ad networks via Google's AdExchange platform. As a buyer on Google AdWords, you compete in real-time against other AdNetworks, DSPs and direct buyers. Google AdWords offers a different pricing model and their own secret sauce "keyword targeting" as a network. In essence every Google AdWords buyer competes in real-time for every ad impression and can be given a preferential buy depending on the publisher as does other RTB buyer. For AdWords Buyers: They need to upload their ads:- 1. Buyer logs into Google AdWords. The buyer normally has a number of different targeting criteria :- keyword, placement and topic, which they choose along with a pricing strategy e.g. CPC, CPM and CPA. 2. Buyer uploads ads into Google Adwords. Few buyers, but some are permitted to use 3rd party ads. 3. The ads then get reviewed either automatically or by a human. 4. Now the buyer should be eligible to enter the auction when their parameters are met. For RTB buyers: They have a seat/account on the Google AdExchange and they compete for every ad impression. 1. Get an account 2. Upload a template campaign/adgroup/ad 3. Start receiving call out requests for ads. How Real Time Bidding works for AdWords Customers: For a real life example for a given publisher on Google AdSense the following takes place (lets imagine they don't have an ad server and Google AdSense = Google AdExchange Publisher): 1. Call out request is made for creative. This is normally a javascript tag that is converted into an IFRAME to render a buyer creative. AdSense publishers can also use JS tags too. They have options to block RTB and specific buyers, categories and all that jazz. 2. Upon receiving the call out request the auctions take place : -

All buyers on Google AdWords are ranked by a quality score for CPC/CPA buys, which computes down to a CPI and the highest bidding winner normally wins (give or take some other circumstances).

Effectively at this time callout requests are made to the other Real Time Bidding entities - where they are eligible for the impression. The RTB entities bid back with their CPM in micro USD dollars.

Upon receiving all of the bids within a time limit the Google AdWords buyers compete with other networks/agencies buying, and the highest CPI wins, but pays the second highest price. Google takes the financial risk for buyers should:- a) the user not convert for CPA buying, b) the user did not click for CPC buying.