A Brief HistoryAd networks grew during the dot-com boom that began in the mid-90s. As the number of sites and digital publishers multiply, they need a simple way to increase inventory demand and ad revenue. Likewise, advertisers need help to scale their digital ad purchases on a number of websites without having to deal with each publisher directly.
At first, there was DoubleClick. Launched in 1996, a digital ad services agency pioneered the concept of an ad network and attracted buyer demand with its ad performance tracking and reporting solutions. The company acts as an intermediary, marketing buys ads between advertisers and publisher networks.
DoubleClick survived the 2000 dot-com bust, and Google bought it in 2007 for $ 3.1 billion. At that time, Google AdSense was four years old, launched in 2003. Today, Google Display Network from Google AdSense publishers is the world's largest ad network, and DoubleClick for Publishers (DFP) acts as Google's premium publisher network.
With mobile and video growth, ad networks specifically for this area are formed, and many have been seized by people like Google (AdMob), Yahoo (Flurry and BrightRoll), Twitter (MoPub), AOL (Millenial Media, Adap.tv) and Facebook (LiveRail). TubeMogul and Video Tremor are examples of independent video ad networks. Chartboost, InMobi, Smaato, StartApp, and TapJoy are among the mobile ad networks that are still independent.
How does an ad network work?At the most basic level, inventory of unsold advertisements from publishers and sell them to advertisers. They earn money by taking an ad revenue slice, sometimes marking inventory before selling it.
Ads are sent to publisher sites by ad network and servers through the code on publisher sites that contact those ads. Performance is tracked via tracking pixels from ad networks placed advertisers on conversion pages like thank-you pages on their sites. An ad network ad server affects ad targeting, tracking, and reporting in a campaign.
Unlike AdSense where advertisers and agents manage their own bidding, targeting, and optimization, many ad networks manage campaigns on behalf of agents and advertisers. In this case, ad networks and buyers negotiate ad purchase terms like audience targets, impressions (how many times ads are served) and paid (CPM). Ad networks then run targeting, optimizing and reporting on campaigns.
What Type of Targeting is Available?Some ad networks categorize sites on their networks based on the type of content they cover. Automotive sites, travel, beauty, fitness, for example, can be grouped into vertical channels and sold to advertisers who want to reach audiences interested in the topic. Some networks meet certain verticals while others are open to almost all types of sites. Alternatively, ad networks may instead sell audience segments created based on behavior, interests, demographics and other data from third-party publishers and data providers.
There is also a low-cost, inventory-based ad network that provides little transparency to where the advertiser's ads appear. This blind purchase can offer a cheap scale and is usually purchased by direct response advertisers who measure performance by CPA and pay less attention to brand safety.
Are All Ad Networks Equal?In short, no. Some networks are very selective about the type and quality of publishers that are allowed on the network, while others are clearly less so.
Tighter ad networks may have exclusive access to premium publisher inventory. In fact, the publishing group has established their own advertising network to control the inventory type in the pool and maintain the premium price.
Some networks will buy ad impressions in bulk from the ad exchange and resell them with markup. Some ad networks also sell inventory from publishers in the open market. Another strategy is to combine ad sales through other ad networks.
Transparency IssuesThe purchase of ad exchanges and ad syndication are two reasons why buyers get worse in some ad networks because it's often not clear at the beginning that brand advertising will run on (or off) the network.
Pricing and Ad FormatsAd networks started in the desktop banner era, but now covers all sorts of digital inventory, including mobile and video.
There are ad networks that specialize in one type of ad format or media and others that sell everything. In addition to standard IAB ad units, some examples of other ad formats sold by ad networks are native display and video ads, in-picture ads, content suggestions and ads in a text.
Many networks offer several price options. Model costing per thousand impressions (CPM), viewable CPM (vCPM), cost per click (CPC), cost per acquisition (CPA), cost per view for video (CPV). Some purchases are fixed-rate, while others are auction-based (like AdSense).
Publishers typically earn ad revenue percentages.You may wonder how the ad network is different from the exchange of ads. Stay here. Ad Exchange will be the focus of the next installment of the MarTech Landscape series.