Ad serving: An in-depth guide for 2021

What is an Ad Server?

To put it simply, an Ad Server is an online platform that helps you serve ads. Ad Servers are web servers that store ads and deliver them to websites, mobile apps, mobile sites, and other digital media.

Also, they allow users to put their creatives online, set targeting and delivery parameters, serve ads, and optimize and monitor their campaigns. In other words, if your ad campaign was the Starship Enterprise, an ad server would be the control room.

Ad Servers: Overcoming the Traditional Reservation Workflow

When it comes to the traditional reservation workflow, there are about forty different steps to take to place an ad on a publisher’s website. These steps include selecting the publisher, publishing and trafficking the ad, measuring ad performance, and receiving an invoice. And if you want to publish 30 ads, you need to go through that process the same number of times, which makes the work time-consuming, inefficient and prone to human errors. One of the most critical challenges in digital marketing involves managing advertising campaigns across multiple publishers and formats.

The solution to this problem is to manage, track, and report from a centralized system or central point. In this case, the central point is the ad server. An ad server lets you keep all your advertisements and creatives in your server, and every time there’s a change to the creatives – you don’t have to work with each publisher one-on-one. Moreover, if you need to make any bulk modifications you can easily do it from the ad server platform.

Ad Servers, Publishers, and Marketers

An ad server is a technology used by ad networks, ad agencies, publishers, and marketers (or advertisers). The world we live in is becoming increasingly fast-paced, and to keep up with the pace the business world tries to work even faster to predict and meet consumers’ needs. Ad server technology lends a helping hand because it is responsible for making data-driven, instantaneous decisions about what ads to show on a particular site and then serve them.

On top of this, there is the importance of data in today’s digital marketing world. Decisions are no longer based on hypothesis but rather determined by data and analytics. An ad server collects data (e.g., impressions, clicks, etc.) and reports it back so marketers can gain insights and track their ads’ performance. For example, This data allows you us to gain insight into how users interacted with the brand before purchasing a product or service.

The Process of Ad Serving

The ad serving process depends on the ad server’s functionality – whether the user is an advertiser or publisher. To bring the overall idea of how everything works, let’s take a quick look at the classic ad serving case:

1. User visits the app or website

2. Web page loads or app opens

3. Ad tag starts to load and calls the publisher’s ad server Ad request (ads are requested with the list of criteria on which ads are suitable)

4. Ad server analyzes data about the visitor

5. Finding the best matching ads for the visitor to show

6. The selected ads are returned to the app/website for the user to see

7. Website loads and shows ad to the visitor

Whenever people want to go online, they open the browser and type in the URL address they wish to visit. The website’s owner has placed the website’s content with a hosting company. That content sits on their web server, ready to be accessed by various users.

The user’s computer establishes an IP connection with the web server based upon the user’s computer’s specific IP address. The web server sends content to the user’s computer, but with gaps in it. These gaps are the space where ads will appear.

The website owner also has a contract with another company that holds these ads, and they are sent to the page from that company’s ad server. The schedule determines which ad is selected. It looks at all the campaigns in the schedule running and decides based on:

• Ad format (banner, skyscraper, or MPU)
• Which type of client is needed
• Who has the most ads left to deliver
• Whose campaign has the least amount of time left to run

Once these decisions are made, the ad is served onto the page.

Ad Server Monetization

In order to monetize their websites, digital ad publishers have turned to advertising-based financial models.

Suppose you are partnering with an ad network that sells the ad inventory for you. In that case, you don’t need an ad server because you won’t manage inventory sales yourself. On the other hand, if you want to sell inventory directly to advertisers, you need the technology to manage all those advertising campaigns. 

To use this method, you need to have a high traffic volume and a high conversion rate because this monetization method uses the Pay Per Click model. Advertisers will pay you depending on how many people click the ad.

From the advertiser’s perspective, one of the most important metrics to consider when choosing an ad platform is eCPM (effective cost per mille). This metric is used to measure the ad revenue generated per 1,000 ad impressions (or the cost of every thousandth ad impression). You can calculate it by dividing the total revenue by the total number of impressions and then multiplying the result by 1,000.

High eCPM means that the ads served are converting users and doing their job.

Types of Ad Serving Systems

Waterfall

Also known as the daisy chain, water-falling is a process that publishers use to sell their remnant inventory. Like its name suggests, when a publisher is unable to sell all premium ad slots (typically reserved for direct ad sales between the publisher and advertiser) that offer the highest CPM, they pass the impression “down the waterfall” to other ad networks until it’s sold. The advantage of the waterfall system is that the publisher can sell all of its inventory. The downside – the CPM price decreases as the impressions go further down the waterfall.

Programmatic

The successor of the daisy chain system is the programmatic advertising platform. Programmatic advertising is based on the use of software to purchase digital advertising. It leverages the power of algorithms and machines to buy ad display space. Of course, the process is not entirely automatized because you still need human involvement.

Real-Time Bidding (RTB)

In simple terms, real-time bidding is a real-time auction where ad requests are sent to an open exchange (or a marketplace that facilitates an auction) to get bids from buyers. It is a concept related to programmatic advertising that involves several moving parts, such as an SSP (supply-side platform), DSP (demand-side platform), ad exchange, and ad inventory. Whenever a user loads a web page, ad requests get sent out to open exchanges, and the number of these requests vary.

SSP (Supply Side Platform)

The SSP is an essential component of programmatic advertising that links publishers to multiple buyers simultaneously, putting forward their inventory for bidding. It allows publishers to access the buyer demand, research the market situation, adjust their inventory price, and control overall yield. It allows publishers to monetize traffic from their media by filling their Ad spaces with ads and getting revenue.

Ad Mediation

Ad Mediation another solution that enables publishers to enter the world of real-time auction-based selling of their media inventory. It’s a popular way of monetizing apps. Ad mediation for mobile app and website publishers involves using one SDK – software publishers need to implement into their websites and apps to display ads, track their performance, and manage campaigns.

Header Bidding

Another programmatic advertising technique, header bidding, evolved from the old waterfall bidding. Also known as advance bidding, tag-less bidding, or pre-bidding, it’s a method where publishers offer their inventory to multiple server-side platforms at the same time before reaching out to ad servers. They can ensure the highest paying bid is served by letting several demand sources bid on their inventory simultaneously. That way, they can make higher revenue regardless of the ad server or SSP that the bid came from.

The Importance of Data and Measuring Performance

Because data is gold, measuring performance brings a competitive advantage to advertisers. It tells you everything about your customers – who they are, where they come from, what they are interested in, and when is the best time to reach them. Building and segmenting your audience list and then leveraging those segments will significantly help you with each new campaign.

What is the foundation of ad campaign performance measurement? It’s having a complete insight into campaign performance across all screens and channels. It often happens that advertisers get lost in the weeds because of the complex nature of digital advertising, especially if they’re running multiple campaigns at once. Segmented data and measured performance show an overall image of what’s happening with customers and with your customer journey, allowing you to see the big picture.  

Conclusion

Ad Servers have revolutionized the digital advertising ecosystem because they allow us to manage all of their digital marketing campaigns and efforts in one place, from campaign planning to ad targeting and trafficking to ad serving, optimization, and reporting. 

Ad Servers have become the foundation of modern advertising, giving advertisers the tools to create, deliver, optimize, and monitor their ads across all advertisement channels. They continue to democratize the Internet with ad-powered content.