Ad Serving 101

The ad-serving world has seen a lot of turmoil of late:

  • DoubleClick is on a site-side ad-server buying spree, with plans announced to purchase L90’s technology business and possibly Real Media.
  • Bluestreak bought Engage’s third-party ad-serving business, AdKnowledge.
  • Engage shuttered its media business (the former Flycast Network), leaving it with only its site-side serving business.
  • Mediaplex (a third-party server) was recently snapped up by ValueClick.
  • MatchLogic (also a third-party server) closed its doors not too long ago.

Site-Side Ad Servers

Back at the beginning of time, online publishers needed to monetize inventory through advertising. At first, they simply plunked ads onto pages as regular images and served them with standard Web servers. This worked for a little while, but it quickly became apparent that greater features were required than could be handled by standard Web servers.

Advertisers needed accountable reporting. They needed audited impression and click numbers, and they needed to know that methodology was used. They needed to be able to access reports for their campaigns on a regular basis and for specific date ranges.

As more ads got served, advertisers wanted to be able to rotate ads based on various trafficking criteria — just like in offline media. This required that publishers have control over their inventory — and that they could schedule ad flights to run in specific rotations and for a specific number of impressions. This is complex, because it involves prediction of available inventory based on current and past impression volumes.

The job of a site-side ad server is as follows:

  • Serve ad creative every time a page is called without serving “broken” banners — this is a mission-critical job process
  • Manage the inventory of available ads and make sure appropriate ads are served to appropriate locations based on the media buys
  • Report on the number of impressions and clicks that have taken place for a specific flight of media

A site-side server has many other features, such as geographic targeting, frequency capping of creative, and sequential serving of creative. But from a basic ad-serving standpoint, that’s the role of the site-side server.

Third-Party Ad Servers

As the online advertising industry matured, it became clear that though site-side ad servers performed their job for the publisher, they weren’t very friendly to advertisers who ran campaigns across multiple publishers.

Here’s a fictional example:

XYZ Finance is a big financial firm. It runs ads across 10 different publishers. Every month, it runs a new campaign with 20 different creatives. So, every month it sends 20 different creatives out (trafficks them) to the publishers. And every month, it gets reports back from the publishers with all its statistics.

The problem is that it then has 10 different reports in 10 different formats. All of which must be put into Excel and merged. Additionally, all it gets from the publisher is the number of impressions and the number of clicks, plus a click rate. As enlightened marketing professionals, we know the click rate is a horrible measurement of overall performance.

Additionally, if XYZ wants to change creative during the run of a campaign, numerous manual steps must be gone through, from contacting the publisher and having it pull the current ads to getting new ads trafficked out and having the publisher turn them live.

So the answer to these problems is the third-party ad server. While the job of the site-side server is mainly about delivery and management of inventory, the third-party server is more focused on trafficking, reporting, and analysis of results across multiple locations.

Here’s how it works at its most basic:

  1. The advertiser (or agency) has a contract directly with the third-party server.
  2. The advertiser uses the third-party server to upload and traffic all its ads to various publishers.
  3. The publisher, instead of placing actual ad creatives into its system, places an “ad tag” into the system. The ad tag calls the third-party server when it is placed on the page by the site-side server.
  4. The third-party server is responsible for delivery of the ad when it’s called by the site-side server. Again, this is a mission-critical serving job and can never be down.
  5. The advertiser has 24/7 access to the third-party server and runs reports any time for any date range. The reporting and analysis tools on the third-party server are much more powerful and refined for the advertiser’s needs.
  6. Since reports are generated by only one solution, they are unified and similarly formatted. This enables clearer value analysis of each media buy.
  7. If the advertiser wants to change an ad during the life of a campaign, this can be done dynamically — swapping the creative in one central location. That change populates automatically across all publishers.

Third-party servers have plenty of other features; these are just the basics of the value proposition. Next time, we’ll talk about some advanced features of the ad-serving space and see what kinds of advancements are being working on.

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