What Is an Ad Network & How Does It Work? [Definition Guide]
Advertising professionals and publishers rely on each other for common benefits: monetizing online audiences and getting in touch with prospective customers. That’s why it’s so important for both inventory and business owners to get in touch with each other and have a convenient way to publish ads. That’s where ad networks come into play.
Publishers and marketers no longer have to exchange emails and negotiate over every banner placement. This entire process is now mediated by ad networks. In this post, we answer the question “What are ad networks?”, highlight their benefits, discuss the most popular models, and help you choose the right ad network for your needs.
- Setting up the campaign. First, advertisers describe their spot requirements: how much they are ready to pay per impression, which audience they are aiming at, and the content format they are sharing.
- Connecting with publishers. Once an advertiser created a campaign, the system will automatically place the ad on the platform that meets the requirements of company managers.
- An advertiser can change the types of ads he wants to publish without having to notify the publisher — modifying the spot’s settings is all it takes to rotate a video or a banner.
- Providing inventory. A publisher decides how much website space he’s ready to put for sale and sets a minimum bid for each inventory item.
- Choosing the highest bidder. After a publisher finalizes their offer, the inventory is put up for auction. After the bidding, a winning advertiser takes the spot. Despite the seeming complexity, it’s a fully automated and fast process — determining a winning bid takes milliseconds.
- Placing the ad on the website. The creatives provided by a winning advertiser are transferred to the publisher via the network. After the ad is published, all interaction data is sent back to the advertiser so that he can track the marketing efforts.
Ad Server, Ad Network, and Ad Exchange: The Difference
Ad networks, ad servers, and ad exchanges make up ad placement, so it’s common for both advertisers and publishers to confuse them. We’ll take a closer look at the definition of the concepts, and the differences between them. We already know how the definition explains what an ad network is. Now let’s consider two other concepts: ad servers and exchanges.
An ad server is a technology that manages, stores, and exchanges files between those who buy traffic (in order to rotate ads) and those who sell traffic (expose ads to the website’s visitors).
An ad network definition — it’s a platform that consists of an ad server, a demand-side, and a supply-side platform.
An ad exchange is alike an ad network as both distribute inventories. The ad network dictates the cost of an inventory spot, while ad exchanges set it through real-time bidding.
To understand the key differences between ad networks, servers, and exchanges, take a look at the comparative table below:
Using Ad Networks: Benefits
Ad networks are an advantageous decision since they are doing an excellent job in helping marketing professionals get more exposure. Publishers, on the other hand, can sell inventory and capitalize on years of hard work.
Let’s take a look at the benefits that ad networks provide for advertisers and publishers:
Benefits for advertisers
- Access to unique traffic sources worldwide. They provide instant connection to millions of publishers and help business owners broaden their reach, and get in touch with international audiences.
- Facilitated ad campaign management. Ad networks come with a variety of marketing tools for ad design and campaign tracking. Thus, business owners and marketers get a clear understanding of how much engagement every ad they pay for generates.
- Robust setup settings. Advertisers can use a detailed user profile. Being able to specify the cost per click, the interests, and location of desired traffic, and choose the most appealing ad type for your audience improves the efficiency of marketing efforts a great deal.
Benefits for publishers
- No in-person interactions. Using ad networks instead of looking for advertisers personally allows publishers to not worry about your blog monetization model and focus on editorial planners and attracting as many readers to the website as possible.
- Publishing relevant ads. Ad networks give media owners a possibility to filter ads and choose those that are relevant to the platform’s readers and don’t go against the editorial policy.
- Multiple monetization options. Publishers can charge advertisers on the pay-per-click, pay-per-view, pay-per-sale, pay-per-lead, and pay-per-install basis. Media owners are sure they leverage the full potential of their inventory.
- Built-in inventory management infrastructure. A built-in supply-side platform comes in handy for publishers — they can manage their inventory, track user engagement, and revenue.
Types of Ad Networks
To make it easier for both parties to meet each other’s needs, ad networks moved from one generic platform to separate types of tools. Take a closer look at the main types of ad networks and choose the right one for you:
- Premium ad networks. These platforms host hard-to-get inventory spots. To find the answer to the question “How does advertising network work?”, an advertiser might need to either request an invitation or pay a subscription fee. As for publishers, they need to make sure that the platform meets traffic requirements set by the network to start distributing their inventory.
- Vertical ad networks. These are industry-specific networks. In case an IT company, for example, wants to publish an ad on a tech platform, joining an IT-only ad network will give business owners higher odds of matching with relevant target audiences.
- Inventory-specific networks distribute a particular kind of inventory (banner-only, video-only, mobile-only, etc.), making it easier for business owners and content platform managers to place and distribute a specific type of content. Verizon Media and Taboola are prominent examples of such networks.
- Affiliate ad networks. Affiliate marketing (placing links from advertisers natively in a blog post) is riding a wave lately — according to statistics, advertisers spend $6.8 billion on it per year. Now, there are plenty of such networks: ShareASale, Awin, Amazon Associates, and others.
- Multi-format ad networks. These are global structures serving billions impressions monthly. They provide partners with at least 10 ad formats: popunders, display banners, video pre-rolls, push notifications, etc. Lately, it has become feasible to rotate multiple ad types with just a single line of code. Innovative formats like Social Bar bring a fresh spin into marketing activities of both advertisers and publishers.
Why Are Ad Networks Important?
Ad networks have brought about a revolution in digital advertising. They marketers and inventory owners almost infinite room for scalability, became a convenient foothold for designing and tracking marketing campaigns, and fuel the entire industry of programmatic advertising.
If you are wondering “Why are ad networks important”, consider the following reasons:
1. It’s a mediator between advertisers and publishers
Ad networks are the reason why today it’s impossible to imagine connecting with advertisers and publishers via emails, having no methods to make sure that a publisher isn’t lying about the popularity and readership of the platform or talking over inventory prices.
2. Facilitate inventory and campaign management
With ad networks, advertisers can connect with audiences that fit the company’s business objectives like a glove, track the performance of an ad, and adjust bid settings. Publishers can manage all their inventory in a single centralized platform and get the most out of every inventory spot on sale.
3. Help businesses scale advertising and promotion
Advertisers can place ads on multiple platforms at once in milliseconds. Similarly, publishers can sell dozens of inventory spots at once. Thanks to a centralized management platform, neither have a risk to get confused or make a miscalculated decision — a third-party network will offer both business and media owners a big-picture view of their marketing and monetization strategies.
4. Wide range of advertising and monetization technologies
A typical advertising network is more than a database — rather a full suite of marketing software and integrations. Think about Ad Sense or Facebook Ad Manager and the robust toolkits these platforms offer.
How To Choose An Ad Network?
What is an advertising network? Ad networks are a convenient and easy-to-use way for advertisers and publishers to bring together. An ad network will help facilitate and scale the process whether you are publishing an ad or selling inventory.
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