Jun 14, 2021
Not to sound like your grandparents talking about a foreign world so far in the past that you can’t possibly fathom, but ten years s ago the world was a different place. I know what you are thinking, heck one year ago the world was a different place, but what I am talking about is commerce and how we advertised. You see, companies used to rely heavily on advertising in newspapers, magazines and above the line advertising to. Help with sales and brand awareness and publishers, well they relied on companies to buy the advertising.
With the influx of technology today, business has had to rethink how it advertises and the publishers, those who are still around, have had to develop a new model for advertising sales. In essence the Internet grew up following the models of print closely, so naturally, the immediate attention went to display advertising as it was not only what the business world knew, but more that consumers were comfortable with the model. There were several. Models to choose from back then, companies could advertise on news services, directorial and websites. The problem with relying on the way business used to operate was that these companies would sell their ad space with sales reps and depending on how well the rep did, many spaces ran the risk of not selling out their inventory of ad spots. In short, the model was really, really inefficient. Because of the need, there was an opportunity identified for services to sell the left over advertising, much like the travel model of selloffvacations.com and ad networks were born.
To be truly successful, the ad networks needed a great deal of sophistication so they invested heavily into their infrastructure to build platforms that would connect buyers and sellers of advertising space. While logically, you would expect that these services would include the traditional media outlets like tv, radio and print, but the market was so hot and the practice at the time so niche, they focussed solely on online sales. It was a huge gamble, but one that really paid off.
As mentioned, the model basically bought the remnant or non-premium advertising space off of the online publishers for pennies on the dollar and sold the spots off for a fraction of the original price. Everyone won. But as with everything, the model grew up and services are thinking more strategically by buying blocks of premium advertising space and in turn selling the premium impressions to advertisers. It means that the advertisers are assured that they are securing premium advertising spots and though there is little savings, these spots mean greater exposure through the frequency or location of the advertisements.
The ad networks shouldn’t be confused with ad servers however which are servers used by advertising networks to manage their day-to-day operations. There are two different types of advertising servers out there. First party servers which are owned and operated by the publishers and third-party which are owned by the advertisers. Both types of servers have their pros and cons for example the first-party servers can be extremely expensive to maintain versus the third-party counterparts though the third-party servers present a greater risk due to connectivity issues and security concerns.
The first-party servers allow the networks to manage their inventory cleanly by offering a conduit for selling off remnant or non premium spots to the ad networks and the supply-side platforms, otherwise known as SSPs and the third party servers are built for storage of the advertisements and provide essential data such as impressions and clicks on the ads.
So to recap a little, an ad network is an aggregator of supply of advertisements sold off by the publishers at reduced pricing. The advertiser then sets up their campaigns through the network and the servers through their management tools or using special technology to verify the data of impressions and clicks. It’s the responsibility of the advertiser to establish the parameters of their campaign such as demographics, psychographics, geography and the target market in general. It is the network responsibility to ensure these ads are inserted appropriately. The nice thing for the ad network is that they can sell the same spot, totally unlike print media, by rotating the ads and managing the impressions based on budget, bidding and other factors like day parting parameters.