As a fundamental concept of digital marketing, ad networks emerged in the mid-1990s, allowing advertisers to buy ad space from multiple websites and apps in an automated way. These companies are essential for the digital advertising market, positioning themselves as intermediaries between supply and demand.
Because they are absolutely necessary for the programmatic ecosystem, we prepared this article to help you understand what an ad network means for publishers and advertisers.
What is an Ad Network?
Ad network is a platform that acts as an intermediary between a group of publishers and app developers and a group of advertisers (agencies/brands).
They help brands and agencies to buy ad inventory from different publishers and developers. Besides that, some can also operate with full technology services, optimizing revenue through strategic studies, management and partner sites infrastructure.
The term ad network is used exclusively to refer to online advertising. Back in the days, they were used only to collect the remaining ad inventory from different publishers and app developers, bundling it, and selling the pool of impressions to partner advertisers. But nowadays they work strategically to offer exclusive offers at premium prices.
In order to achieve this level of operation, they buy, in advance, ad inventory from different publishers, and renowned app developers, aiming to resell it. Even if prices are higher, advertisers are able to guarantee premium placement.
Difference between Ad Network and Ad Server
The main difference between ad networks and ad servers is that ad networks use an ad server to sell ad impressions and monitor revenue for publishers and app developers.
Monitoring allows the ad network to know the performance of the campaigns, making it possible to optimize the results of both those who sell and those who buy network ads.
The ad server, a technology used to store, manage and place the ad on the publisher’s website, maintains separate statistical data for each user, where it is possible to generate real-time reports on campaigns, with information on the most relevant metrics, such as quality of impressions, clicks, leads, etc.
Through these reports, brands and agencies are able to identify the ROI of a particular website or application. Segmentation options, which include domain, user and geography, enable the ad server to exhibit the ads to the target audience at the right place and time with the right message.
How do Ad Servers and Ad Networks step in with Online Advertising?
An ad network with a broad group of publishers and partner developers is able to provide the necessary ad inventory to advertisers. Through the ad server, the advertiser can purchase inventory, upload creatives, select links to creatives, and determine ad rules.
Once these requirements are entered, the ad server generates ad tags for each publisher, developer or ad network. This ad tag must then be inserted into the website or app to display the ad. No prior contact between those involved is necessary for all these actions to happen.
How does an Ad Network Work?
Ad networks bundle all available inventory from a publisher or app developer and sell it to brands and agencies. Basically, an ad network aggregates a large number of publishers and developers through ad tags to provide the necessary amount of inventory to advertisers.
The advertiser configures campaigns in the ad network management panel, specifying parameters that include creative, segmentation, budget, frequency cap, etc., or configures pixels from a third-party ad server. These settings can be changed even when the ad has already been published.
How does Ad Networks Benefit Publishers and App Developers?
The benefit that every publisher and app developer already knows about partnering with an ad network is the opportunity to sell remaining ad inventory. Some cover up to 100% of that inventory and even offer premium inventory. But there are other advantages, including:
- Opportunity to advertise the inventory in a more efficient and qualified manner;
- Gives the chance for small and medium publishers and app developers to grow and generate more opportunities;
- Increases profit through more qualified ads on the website or app;
- Publishers that select a full service ad network can focus specifically on producing quality content and not spend valuable time on activities that include technical maintenance and site management, implementation of software updates and new features, API’s integrations, implementation of design updates, website security, performance testing and optimization, etc.
How does Ad Networks Benefit Brands and Agencies?
Ad networks can also offer many benefits to advertisers, including:
- Range and frequency capping applied across all campaigns;
- Generate and centralize reports;
- Set up the campaign just once and link it across different domains and apps without having to sign contracts or talk to each publisher or app developer;
- Segmentation effectiveness and greater range in order to increase rate sales;
- Working with a specialized team, with expertise that encompasses the website or app’s audience directly with the advertiser’s target public.
Types of Ad Networks
There are different types of ad networks and the segment of sites and applications served by them. Among the main types are:
- Performance and Affiliates: They typically work using a revenue sharing model;
- Inventory specific: Offer a specific type of ad inventory;
- Premium: Work with popular publishers;
- Segmented: Offer specific segmentation features integrated into the ad server;
- Vertical: Specific to a certain sector.
Regardless of the type of ad network, they basically have access to the public numbers from different domains and gives the chance for the publisher to grow.
Through the data that these companies collect, it is possible to separate them into segments, gather them and offer them to advertisers, who choose the segment according to the product or service they wish to advertise.
Ad Networks Evolution
Nowadays there is a fine line between ad networks and SSPs. The same way as ad networks offer solutions and functionality that until now were only available through SSPs, SSPs are also implementing some features that were previously only offered by ad networks, such as programmatic direct.
Ad networks can also add programmatic engines that optimize RTB delivery, as well as connect remaining inventory to select DSPs to increase the fill rate for publishers and app developers.
Ad Networks and the Programmatic Direct Transaction
This model helps brands and advertisers to connect with publishers and app developers after the ad network packages specific inventory (special formats, positioning, audiences, etc.) to offer to buyers.
The entire process is automated, which makes programmatic direct one of the best ways to reach your target audience through the purchase of premium inventory.
Programmatic direct is very popular with big brands, who run branding campaigns using premium ad formats, often on the homepage and full page.
Difference between programmatic direct and other types of transactions
Programmatic direct is between the traditional reservation system and the open auction. The publisher or app developer bypasses auctions and sells the ad inventory at a fixed cost per thousand (CPM) to one or many advertisers.
Regarding the RTB, ad inventory is offered to all buyers and the highest bidder wins the right to display the ad.
Direct agreements involve more security and transparency, but they need to be negotiated, which means more human involvement than any other programmatic agreement. This type of offer is subdivided into two types of transactions:
When advertisers negotiate the purchase of inventory directly with the ad network, publisher or the app developer, but not limited to manual processes.
The buyer guarantees to buy a fixed number of ad impressions, while the publisher guarantees to deliver the exact number of impressions, in a certain period, for a fixed price.
Benefits for Advertisers
- Best Inventory: Guaranteed impressions are generally only applied to the best inventory and ad placement.
- Guaranteed volumes and fixed price: Know in advance the price, spaces and ad placements bought in the transaction.
Benefits for Publishers and App Developers
- Guaranteed sale: Sure to sell all inventory.
- Fixed cost: Know in advance the cost of selling ads.
Also known as programmatic unsecured, the buyer has a preference to bid at the negotiated price, but is not required to bid. Preferred deals give you the option to reserve inventory at a premium price.
Benefits for advertisers
- First look: Being able to access the inventory first and find the best placements for the target audience, faster than the open auction.
- More control with fixed price: Know the exact inventory price.
Benefits for publishers and app developers
- Higher CPM due to preferential access: Instead of auctioning, the advertiser often buys inventory after the first look, which results in a higher CPM for publishers and app developers.
- Quick inventory selling: There is no need to participate in the auction as all inventory can be sold to one buyer.
In short words, ad networks bring together publishers, app developers and advertisers. They act as intermediaries in the process of buying and selling inventory and improve results for publishers and advertisers through statistical analysis.
There are different ways to use an ad network, such as inventory reservation, improvement in display quality, increase in fill rate, peace of mind of being able to count on a specialized partner, who work side by side with their partners in the task of promoting an accelerated growth.
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