Defining What is Ad Network and how it Works

by Eugene Agoh. | Jun 30, 2018 | Ad Networks, Advertising

Online Ad network can be defined as a digital platform, created with the sole purpose of serving Ads to registered publishers. Those registered publishers are websites and Blog owners willing to earn some revenue from displaying Ads. It’s a simple concept that is aimed at connecting the advertiser to bloggers and website owners willing to show those ads on their web pages. In other words, “Ad Network” facilitate the connection between the advertisers willing to buy available Ad spaces (Inventory) from a group of publishers in different geographical locations across various categories (Niche).

1. Defining what is an Ad Network

Since the begging of internet marketing which includes online advertising in the early 90s, Ad Networks use to serve as intermediaries between advertisers and publishers. The technology has advanced today with many functions that allow for more advertising optimization and targeting tools to reach more target audience. However, There are always two important parts or groups on every AD network which are the Advertisers and Publishers. The Advertisers are business or individuals willing to promote their products or services online with the hope of getting more traffic and increasing their sales, on the other hand, Publishers are individuals willing to display Ads from particular Ad network to earn some income through their traffic’s clicks and impressions.

You may also like: Advertising Networks Frequently Asked Questions

The advertisers are often the businesses or individuals, they pay to the Ad network, create ads and submit those ads for approval by the Ad network admin. once the Ads are approved, they are shared on the publisher’s web pages. The Ads sharing follows a process and guidelines based on the preference of the publisher. While creating Ads from the Ad network inventory, they select specific Ad based on their location, keywords, and niche. To avoid the confusion, these ad networks include only online advertising and not the traditional advertising media that include television, printed media and radio.

The Pricing model mostly used by Ad networks is CPM, CPC or PPC, CPA etc. Ad Network like AdsTargets offers publishers the ability to create different Ad units like Banner Ads, Text Ads, Interstitial Ads, In App-Ads. Additionally, publishers can choose their preferred device to publish their Ads.

2. What is the difference Between Ad Server and Ad Network

This is one of the most asked questions by newbies in the advertising industry. To clear the confusion, we explain in simple terms what is an Ad server and what is an Ad Network below.

What is An Ad server? In simple terms, it is simply an inventory tracking, monitoring and managing advertising technology used by both Advertisers, publishers and Ad Networks to run and give specific accounts on Advertising campaigns. This is further categorized into two distinct types based on their users. The first one is “First-party Ad server which is mostly used by publishers (A publisher Ad server) while the third party ad server is used by advertisers (An advertiser Ad server). Another term that is widely used is the SSP “Supply-side platform”. This is also a similar technology that offers almost all the functions but a bit different in accessing the inventory and delivery method of distributing Ads which makes it different from the previous two. For more on Ad servers, see the video below.

What is an Ad Network? This is another form of advertising technology but unlike ad server, this technology is mostly used for the management of multiple advertising campaigns which store creatives use during transactions of media purchases between the publisher and advertisers. the next complications after understanding Ad servers and Ad Networks, one will ask how do they work which takes us to the next level.

3. How Does an Ad Network Work?

Just to refresh your memory, An Ad Network work by collecting and listing all the available inventory from publishers and sell them to potential advertisers willing to pay a premium price for them in form of PPC, CPA or CPM.

Here’s How an Ad Network operates

An ad network collects a massive number of publishers to deliver the required amount of inventory to the potential advertisers on a premium price or auction basis.

The Advertisers uses the Ad Network campaign management platform to set up Ads which are then automatically distributed to the publisher’s available inventory. Ad Network offers advertisers the flexibility to create multiple campaigns and consolidate the reporting metrics on the campaign performance.

Also, the advertisers set have the possibilities to set up their campaigns based on their desired prices per clicks, impressions and per action. Targeting through demographics, location, keywords, and budgets are all features offered by Ad Networks to advertisers.

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Once The Ad networks approve advertisers Ads, Advertisers are allowed to change their banners, Text, and targeting as they please. All these Ad management systems are offered within the Advertiser CPanel (Campaign management panel). No time limits or restrictions are placed as the system are managed online 24/7.

In the early 90s when there were few online advertisers and publishers, Publishers were fine using only one Ad Network to source their available inventory but as internet marketing business became more massive, they figured using multiple ad networks pays better and that’s why today you see most publishers use various ad networks on their inventory spaces which also forced Ad networks to drop their rates. the image below shows the risk associated and rewards when inventory is sold to different ad networks.

4. How Advertisers and Publishers benefit from Ad Networks?

There many ways both advertisers and publishers benefit from Ad Networks. Ad networks serve as a bridge that connects the advertisers and publishers together. This makes marketing and economic sense for all parties but let’s discuss them differently.

Advertisers benefits from Ad networks

When through the primary purpose of Ad Networks is to provide an avenue for publishers to sell their available inventory, they also provide a lot of benefits for Advertisers in the following ways

Scalability: Advertisers have the opportunity to buy many inventories at a time through an Ad network and at the same time, Ad networks provide them the opportunity to monitor and manage their ad campaigns in a centralized system.

Campaign management: It helps advertisers save a lot of time as they are able to manage multiple ads within one system and not moving on many publishers inventory spaces or web pages. This could be the benefits as they reach more audience within one system.

Measurement and Campaign reach: The Advertisers have the ability to manage their measure their campaign performance and adjust them whenever they are pleased. They can adjust their campaigns either by increasing their budgets or targeting. Ad networks also give advertisers the ability to collect data and retarget individuals that visit their web pages.

Publishers Benefits from Ad Networks

The most beneficial factor for publishers using Ad network is to sell their available inventory which was not easy to be sold directory to advertisers or advertising agencies. Ad networks offer such opportunities and in some cases, they are able to make constant income from selling their inventory to ad networks.

5. What are the Targeting possibilities on Ad Networks?

The targeting functionalities offered by Ad Networks are many with many decision-making functions that allow the advertisers to manage their Ad campaigns. the Advertiser Cpanel gives them the opportunity to choose which web traffic is most suitable for their campaign, when to target a specific audience and how to targets them. the following are the targeting criteria offered by Ad Networks RON: Run on all sites in the ad network

1. • ROS: Target specific domains/publishers in the ad network
   • IAB categories
   • Geolocation
   • Keywords (context)
   • Time of day
   • Browser type / OS
   • … and many others

   Here some examples of popular ad networks

   • AdsTargets
   • One by AOL
   • AdMob by Google
   • Yahoo Gemini
   • Google Display Network
   • Meredith
   • AdCash

6. Various Types of Ad Networks

Here we show the different types of Ad networks and their pricing models

• Premium Ad Networks: These type of Ad networks offer their inventory to the most popular publishers in the market
• Vertical Ad Networks: These are mostly focused on specific topics such as Technology Ad Network, Business Ad Network, Automotive Ad Network, and Fashion Ad Network etc.
• Performance and Affiliate Ad Networks: These types primarily use revenue share methods such as the CPC, CPM or CPA pricing models.
• Inventory-Specific or Specialised Ad Networks: Typically focused on specific types of inventory such as Mobile Apps. Mobile devices, Video, Native Ads etc.

The traditional Ad networks offer the advertiser the benefit to buy a package of impressions on a CPM pricing model.

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7. What is the Difference between Ad Networks and SSPs

Even though these two have similar functions, and serve almost the same purpose, there are still some differences that exist between them in terms of technology, inventory, clients, Ad optimization functions and targeting.

Inventory: SSPs tend to offer real-time bidding (RTB) and buy inventory that is available from the publishers known to be of “lower quality”. While on the other hand, Ad Networks sell their available ad inventory to brands by giving them access to premium and exclusive publishers.

Technology: SSPs functions allow only Ad delivery, the combination of SSP/DSP (demand-side platform) can be considered the partner of ad networks.

Optimization and Targeting: Ad Networks advertisers are allowed to manually target and optimize their campaigns to reach a specific audience. However, the combination of SSP?DSP uses special machine learning technology. SSPs utilizes programmatic technologies to automatically to optimize ads for publishers, Similarly, DSPs also optimize Ad campaign for various brands while allowing them to target specific desired audience.

8. How Ad Network evolved

As the digital advertising market evolved and became more competitive, Ad Networks have engaged in a battle to maintain a significant amount of their share market. they constantly offer more appealing functionalities to attract more publishers and advertisers. because of the competition, marketers are constantly searching for one in all solution. It forces the Ad network increasingly offering the same tools as SSPs which is massively closing the gap between them.

On the other hand, as SSPs also compete for more publishers, they tend to offer functionalities to attract more premium publishers. At the same time, they offer advertisers the opportunity to buy inventory directly which make them similar to Ad networks. SSPs have evolved a lot as they connect advertisers and publishers (the demand and the supply side). It will be self to say they have evolved towards programmatic direct.

This further closes the gap between Ad networks and SSPs. For instance, ad networks’ gradually transcend premium inventory as they integrate programmatic engines that optimize the procured RTB supply. In addition, they are also connecting their own available supply to specific DSPs in a bid to increase fill rates for their portfolio of publishers.

Advertising has evolved a lot in general since the first banner Advertising was publishers in the early 90s. We have experienced very high levels of competition among Ad network as they constantly introduce new advertising functionalities. recently, In-App Ads and push notification Ad format have been introduced which has also seen spikes in advertising budgets. the advertising industry will constantly see changes in the near future.

Conclusion

We have tried to explain most of what you need to know about Ad Networks and how they work for the benefit of the advertisers and publishers, however, we will continue to update this post to bring you more latest information about Ad networks. Feel free to share your experience, observations, and objections in the comment section below.