Advertising Age talks about a very good analogy relating to the role of an ad exchange. The article states:

“An ad exchange’s best analogy is Wall Street, where buyers and sellers use different brokerage firms (in this case, ad networks) but all trade in a central market (in this case, the ad exchange). Of course, some publishers and advertisers are trading in the exchange directly. Like the stock market’s shares, impressions are priced, bought and sold based on supply and demand… It makes it easier to access inventory that might be otherwise impossible for an advertiser to access, like user-generated content or niche sites that don’t have a relationship with an ad network. And it regulates pricing [because] the value of inventory is based on demand for that inventory.”

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Ad exchanges will continue to play a vital role to networks in providing a medium to buy and sell distressed inventory. An auction based bidding system will greatly enhance the exchange activity because buyers have total control over what they pay.