Print publishers discovered when they transitioned to the online world that they would need new ways to generate income.
Display ads seem like the most straightforward and effective way to monetize digital content.
It all depends on how much inventory is available.
Publishers may find it difficult to sell enough direct ad space for their sites due to a risky process.
So what they need is a platform that will effectively help them sell any extra inventory no matter what.
To address the challenges of the digital age, the ad network platform was invented.
What Is an Ad Network?
An ad network is a technology platform that serves as a broker between a group of publishers and a group of advertisers.
Ad networks were one of the first pieces of advertising technology when online advertising began experiencing mass acceptance in the mid-’90s.
They were responsible for the very same things they are today, which includes helping advertisers acquire available views that span multiple Internet sites and publishers in order to connect with niche audiences and promote their products and services.
“Ad networks” is exclusive when referring to online advertising.
Ad networks gather a variety of impressions from many sources and then offer advertisers a choice.
These selections are offered at a much lesser rate than what a publisher had directly sold their advertising space off for.
Making these selections considered non-premium, or “remnant”, inventory.
Today, some networks take a more strategic approach to ad placement.
They buy inventory at premium prices from top tier publishers.
Then cherry-picking the best advertisements for consumers’ eyes.
They then resell the ad space back to advertisers at a premium price.
What Is the Difference Between an Ad Network and Ad Server?
Because ad networks and ad servers were developed at about the same time, identifying them can be challenging.
Ad servers are used to manage online advertisements.
In the ad server, placements and creatives can be created, uploaded, and made available for serving to one or more advertisers. Each ad server has a reporting interface showing statistics about the ad campaigns it serves.
First-party ad servers are responsible for handling all of the inventory, sales, and reporting aspects involved with direct sales transactions between publishers and advertisers.
Third-party ad servers are designed to help advertisers store their ads, measure campaign performance across several publishers, and verify metrics against reports from publishers, such as impressions and clicks.
An ad network is also a piece of advertising technology and it falls under the category of display marketing. It’s used to help negotiate and transact media buys between advertisers and publishers.
SSP (Supply-Side-Platform) – It’s pretty simple, really.
An SSP is like an ad network, but it serves up inventory that someone has bought.
How Does an Ad Network Work?
Ad networks take all of the available inventory that is visible to users to sell to advertisers.
Here’s how an ad network works:
- An ad network aggregates a large number of publishers to provide the required amount of inventory to the advertisers on an auction basis.
- The advertiser can set up the campaigns directly using an ad network’s campaign-management panel, or set up pixels from a third-party ad server for verification purposes and consolidated reporting when running the campaign across multiple ad networks and in direct deals with publishers.
- The advertiser sets up the campaign parameters (such as targeting, budget, frequency caps, etc.), and the publisher installs the ad-network ad tags on their site by inserting these tags directly into the page or by using a first-party ad server.
- When the ad is published, the advertiser can rotate multiple banners on the website using the ad network’s campaign-management panel without having to contact the publisher.
In the early days of online advertising, most publishers only sold their remnant inventory on one advertisement network.
As they accumulated more publisher sites they soon found that they weren’t able to sell all of it on one network.
Publishers started using more than one ad network to try and increase their fill rates. One of these networks had premium inventory while the other offered remnant inventory.
This situation where a bunch of ad networks is called one after another is known as waterfalling.
How Do Ad Networks Benefit Advertisers and Publishers?
Ad Network For Publishers
Publishers are people with websites, blogs, and content.
There are many advantages for publishers by using a third party to sell inventory between them and advertisers.
Publishers have an opportunity to build relationships with sellers who have good reputations.
Ad Network For Advertisers
While ad networks are mainly responsible for helping publishers sell remnant inventory, they also provide advertisers with many benefits:
Scale: An advertiser can buy more inventory from many publishers through an intermediary and centralize the reporting for the campaign.
Time Savings: An advertiser sets up the campaign once and does not need to sign insertion orders.
Campaign Reach and Measurement: the campaign will be measured and frequency capping will be applied to the whole campaign.
The Different Types of Ad Networks
Below are some of the main types of ad networks:
- Premium Ad Networks: Offer the inventory from popular publishers.
- Vertical Ad Networks: Topic-specific networks—e.g. business ad network, technology ad network, automotive ad network, fashion ad network, etc.
- Specialized or Inventory-Specific Ad Networks (e.g. Mobile, Video, Native): Focuses on a certain type of inventory.
- Performance and Affiliate Ad Networks: Typically using the revenue share, CPC, or CPA pricing model.
With traditional ad networks, an advertiser buys a “package” of impressions on a CPM basis.
Here some examples of popular ad networks:
Future of Ad Networks?
There is a massive competition for market share between supply-side platforms and ad networks that manifests itself as a fight for publishers and revenue.
At the same time, both parties are looking to provide publishers with more functionalities, immediately blurring the lines of where one’s job ends and the other begins.
Since marketers are seeking a one-stop-shop for all their advertising needs, we are currently witnessing two formerly independent ads networks coming together to form one mega network.
One benefit of this merger is that both networks are able to share resources, thus creating a more all-encompassing platform for advertisers.
On the other hand, some ad exchanges are actually implementing features that are more similar to what you would find in an ad network than other types of ads.
They allow their buyers to bypass programmatic direct connections and go straight to publishers, making them hybrids between an exchange and a buying platform which means they fall into the category of either Direct or Pre-direct.