After extensive research through market reports, media articles, statistical databases, and ad exchange blogs, the research team was not able to determine the total addressable market (TAM) of the advertising exchange market in the United States. However, it was determined that the digital ad spending, which is the key growth driver for the ad exchange market as it entails trading digital ad inventory, is expected to reach $129.34 billion in 2019 in the US, accounting for 54.2% of total media ad spending in the United States. Below are the helpful findings apropos that the research team found.
- An ad exchange is a virtual marketplace where publishers and advertisers trade digital ad inventory. It is an online platform that is used by publishers to offer their ad space inventory for sale and advertisers, it serves as a digital marketplace for by bidding on ad inventory.
- It is a neutral, autonomous platform, that allows for programmatic ad buying, driven by real-time bidding (RTB) technology. The three types of ad exchanges include Open Ad exchange, Preferred Deal Exchange, and Private Ad Exchange with around 70 billion impressions flowing in per day through open ad exchanges.
- The ad exchanges started with search, but today they cover all channels, from display, social and mobile to television, radio, and outdoor.
- As per a report by Market Watch, the global programmatic display market, which represents one section of the programmatic advertising traded through ad exchanges, was valued at $84.6 billion in 2017 and is expected to reach $244.1 billion by the end of 2023, growing at a CAGR of 19.3% during the forecast period.
- Digital ad spending, which is the key growth driver for the ad exchange market as it entails trading digital ad inventory, is expected to reach $129.34 billion in 2019 in the US, accounting for 54.2% of total media ad spending in the United States.
- Demand-side platforms that allow advertisers to explore inventories that meet their requirements in an ad exchange market, had a global market size of $9.77 billion in 2018 and was expected to reach $31.3 billion by the end of 2024, growing at a CAGR of 26.3% during the forecast period. The US had a 38% market share in the global market.
- RTB, which powers ad exchanges, is the most widely used DSP (Demand-side platform) in the market, accounting for about 67.17% of the whole DSP market, because of its widely used by the majority companies.
Key Global Players
- Some top ad exchanges operating in the industry include Google Ad Exchange (known as Double Click Ad Exchange), Open X, AppNexus, Rubicon Project, OpenX Market Japan, OpenX Ad Exchange, and Right Media among others.
- Double Click has the highest market share of 53.47%, followed by AppNexus (13.76%), then Rubicon Project (8.06%), then OpenX Market Japan (7.36%) and, OpenX Ad Exchange (6.37%).
After extensive research, the research team was not able to determine the total addressable market (TAM) of the advertising exchange market in the United States. No data could be found in the public domain or could be triangulated. All the information found was centered around the market overview, major players operating the market, market share of some of the largest players globally, size of the digital ad spending in the US and globally which will be primarily driven by ad exchange market and the share of the most used DSPs that power ad exchanges. Below is a deep dive into the various strategies that I deployed to unearth the required information.
Our initial strategy was to scour through the research reports from Market Radar, Market Watch, Bloomberg, Reuters, Deloitte, Mckinsey, etc on the ad exchange market in the US. These reports are the most potential source for the market size/TAM related data and hence we decided to leverage this research path prima facie. While we were able to find reports that provided the market overview and also elucidated upon the global market size for the programmatic display market, which represents one section of the programmatic advertising traded through ad exchanges, there was no information that could be located specifically for the advertising exchange TAM in US. We also found reports on the US digital Ad spending which is one of the key drivers for the ad exchanges Market, but again these provided no insights into the US TAM for the Ad Exchange market.
Our second strategy was to research through the media articles from Forbes, WSJ, Business Insider, Vox, Live Mint, etc; statistical databases such as Statista; and advertising exchange information blogs such as 'AdExchanger', 'Datanyze', 'SmartyAds' etc. All these are again potential sources that contain key numbers around market growth, market size/TAM and trends for any particular industry, especially quoted from paid sources and hence we decided to focus on these sources. However, again no relevant information could be located and all the information found was centered around the key players operating in the ad exchange market globally along with the market share of the top players. Other articles found enumerated upon the trend in an increase in digital ad spending in the US and globally which acts as a key growth driver for the ad exchange market with no data on the TAM of the US Ad exchange market being available through these sources. Hence, this strategy was not fruitful.
Our third strategy was focused on the websites, filings, blogs and other supplemental reports of the top players operating in the industry globally as well as in the US. We envisioned that at times, key industry players especially the leading companies do furnish information on the growth and size of the industry in which they operate in their filings in order to provide an estimate of the market opportunity and the relative scale of operations of the company. Therefore, we were optimistic that this strategy would yield relevant results. However, after extensive research through these sources, our efforts were not fruitful. While we were able to locate the major players operating in the market and their market share based on the number of domains, all the players were found to be private with no detailed filings or annual reports were available. All the information found from the players' websites/blogs focused around the key products and competencies of the individual players with NO data on the TAM of the US ad exchange market.
Our fourth strategy was to try to triangulate the information. Since ad exchanges involve trading by advertisers mainly in the digital ad inventory of various publishers, the TAM for the same could have been defined as the total digital Ad spending that is likely to take place in the United States and the percentage of that spending that is likely to be routed through the ad exchanges. So for example, if the US digital Ad spending was likely to be $X billion with Y% of that being through the ad exchanges, the TAM of the US ad exchange market could have been computed as $(X*Y/100) billion. While we were able to find information on the digital Ad spending in the US through various articles and reports, no information on what percentage of the same is currently routed through Ad exchanges could be found. Therefore, our attempts to triangulate the information was futile because we were not able to find data that could be used for computational purposes.
Our fifth strategy was to find alternate data points in order to try to estimate the US TAM for the ad exchange market. For this strategy, we tried to look at the various types of ad exchanges and try to determine the TAM for those exchanges. The idea here was two-fold. One was to try to find TAM for the individual types of ad exchanges and then aggregate them to arrive at the overall TAM or second to try to find if any specific type of exchange represented X% of the overall US TAM and then use it to triangulate the overall US TAM. While we were able to establish that there are three types of ad exchanges that include Open Ad exchange, Preferred Deal Exchange and Private Ad Exchange, there were no specific details that we could locate for the TAM of these individual types of exchanges. All the information found focused around the differences between these types of exchanges and also the data on the impressions flowing in each day through them like, for example, 70 billion impressions flow in per day through open ad exchanges. Therefore, this strategy did not yield fruitful results.
Limitation of the Research
The primary reason for the information to be missing could be due to the fact that the information is niche-centered and, therefore, no research report or media articles have reported any relevant data apropos of the same.