When opening a new web page in this digital era, you see countless ads without surprise. Digital advertising, an industry forecasted to reach 870.85 billion dollars by 2027, is so deeply ingrained into modern web browsing that ads have become a common sight for us.
Behind a simple ad for a mobile game or an insurance offer lies a whole AdTech ecosystem. This advertising system comprises demand-side platforms (DSPs), supply-side platforms (SSPs), ad exchanges, and ad servers. An ad server is one of the central components of this entire process, so publishers and advertisers need to understand the importance of ad servers and their role in programmatic advertising.
In this blog, we’ll explore the definition of an ad server, the different types of ad servers, how ad serving works, and all the key concepts related to ad servers.
What is an ad server?
An ad server is an essential advertising component responsible for delivering advertisements to online users. It stores various versions of an ad campaign’s creative assets, including images, audio, and video files, and selects the most suitable versions to serve different customers.
Ad servers can also collect data, such as clicks and impressions, providing valuable insights into an ad’s performance. These ads can be banners, videos, or interactive content. Advertisers and publishers rely on these ad servers to efficiently manage and optimize campaigns across various digital platforms, including websites, mobile apps, and social media.
Also Read: Mobile Advertising Types, Benefits, and Best Practices!
Ad server History: How did it start?
In 1995, FocaLink Media Services founded the first-ever ad server. The company’s name changed to AdKnowledge in 1998, and it was acquired by CMGi in 1999. Interestingly, CMGi was an internet company in the 1990s. It owned many well-known tech and online businesses, including AltaVista, one of its major portfolio companies.
Although CGMi survived the dot-com crash in the late 1990s and early 2000s, in 2003, they sold AltaVista to Overture Services. Yahoo took over Overture Services the same year due to mounting pressure from the board of directors following the 9/11 terror attacks and subsequent stock-market crash.
Personalizing ads was a task during the initial stages of online advertising. The browser could only transmit limited details about the user’s PC, such as language, browser configuration, OS, and the webpage they loaded. In this context, NetGravity’s release of the first local ad server in January 1996 was a game-changer. It served ads from major publishers like Yahoo and Pathfinder, proving a good breakthrough in targeted advertising.
NetGravity went public in 1998 and was acquired a year later by DoubleClick for publishers DFP, which renamed the NetGravity ad server DART. Google purchased DoubleClick in March 2008. In 2018, Google rebranded its Google AdWords and DoubleClick ad products and created three primary brands: Google Ads, Google Marketing Platform, and Google Ad Manager.
What are the types of ad servers?
There are primarily two types of ad servers: third-party ad servers and first-party ad servers. In reality, however, the divide between the two server types is hardly visible, as most advanced mobile ad servers can act as both a first- and a third-party ad server.
First-party ad servers
First-party ad servers are used by supply-side platforms (SSPs) and publishers. This server type, also known as a publisher-side ad server, is utilized to manage ad placements and inventory and create ad tags, which are used to match placements with specific ad creatives.
Third-party ad servers
In contrast, ad agencies and demand-side platforms (DPSs) are the primary users of third-party ad servers, also called advertiser-side servers. Marketers employ this server type to manage their campaigns and creatives, targeting, and sometimes analytics and optimization.
Also Read: Rewarded Ads and Their Benefits to Game Publishers!
How does an ad server work?
An ad server manages and delivers advertisements to users across digital platforms such as websites, mobile apps, and video streaming services. Here’s how it operates:
- Ad Placement: When a user visits a webpage or interacts with a mobile app, the ad server is notified of available ad spaces within the content.
- Targeting: The ad server analyzes various factors, such as the user’s demographics, browsing history, and geographic location, to determine the most relevant ad to display.
- Ad Selection: The ad server selects the appropriate ad from its inventory based on the targeting criteria. This inventory consists of ads provided by advertisers, which are stored and categorized within the ad server.
- Ad Delivery: Once the ad is selected, the server dynamically inserts it into the webpage or app content in real time. This ensures that the ad seamlessly integrates with the user experience without disrupting the flow of content.
- Tracking: Throughout the ad-serving process, the ad server tracks essential metrics such as ad impressions (the number of times the ad is displayed) and ad clicks (the number of times users interact with the ad).
- Optimization: Ad servers continuously optimize ad delivery based on performance data and user feedback. This may involve adjusting targeting criteria, refining ad placement strategies, or rotating different creatives to maximize effectiveness.
An ad server is a central hub for managing and optimizing ad campaigns. It allows advertisers to reach their target audience effectively while providing publishers with a means to monetize their digital content.
Benefits of Ad servers
Ad servers offer several benefits for advertisers, publishers, and users alike. Here are some of the key advantages:
- Targeted Advertising: Ad servers enable advertisers to deliver ads to specific audience segments based on demographics, interests, and online behavior. This targeted approach helps advertisers show the right ad to the right people, increasing engagement and conversion rates.
- Efficient Campaign Management: Ad servers provide advertisers with tools to manage and optimize their campaigns efficiently. From scheduling ad placements to monitoring real-time performance, ad servers streamline launching and monitoring advertising tasks.
- Improved ROI: Ad servers help advertisers maximize their return on investment (ROI) by targeting ads to the most relevant audience segments and optimizing campaign performance. This allows advertisers to allocate their advertising budget more effectively and achieve better results with fewer resources.
- Enhanced User Experience: Ad servers ensure that ads are delivered seamlessly within the content of websites and mobile apps without disrupting the user experience. By serving relevant and non-intrusive ads, ad servers contribute to a positive user browsing experience.
- Comprehensive Analytics: Ad servers offer powerful analytics and reporting capabilities, allowing advertisers to track key metrics such as ad impressions, clicks, conversions, and revenue. This data provides valuable insights into the effectiveness of ad campaigns and informs future advertising strategies.
- Monetization for Publishers: Ad servers represent a valuable revenue stream, enabling publishers to monetize their digital content through advertising. Publishers can sell ad space on their websites or mobile apps and use ad servers to manage and optimize ad placements for maximum revenue generation.
Also Read: Offerwall Ads Guide To Enhance User Retention And Monetization In 2024
Challenges encountered by Ad Servers
Here are some of the difficulties that ad servers encounter:
- Ad Blocking: Ad servers struggle with the widespread use of ad-blocking software, which prevents ads from being displayed to users. This affects advertisers’ ability to reach their target audience effectively.
- Data Privacy Concerns: There are growing concerns about data privacy and consumer consent regarding collecting and using personal information for targeted advertising. Ad servers must navigate strict regulations and ensure compliance to maintain user trust.
- Ad Fraud: Ad servers face the threat of ad fraud, including click and impression fraud, which can result in wasted advertising budgets and inaccurate performance metrics.
- Viewability: Ad servers must ensure that users actually see ads. Factors such as ad placement, ad format, and user behavior can impact ad viewability rates.
- Cross-Device Tracking: Users access content across multiple devices, so ad servers must address the challenge of tracking and targeting users seamlessly across different platforms and devices.
Addressing these challenges requires ongoing innovation and adaptation in ad-serving technology and practices to maintain the effectiveness and integrity of digital advertising campaigns.
Also Read: What is eCPM and How to Increase it for High Revenue?
How do you choose the best ad server for you?
Uptime in a Publisher ad server
Uptime in a publisher ad server refers to the percentage of time the server is operational and available to serve ads without interruptions. High uptime is crucial for publishers to ensure continuous ad serving and maximize revenue. Publishers strive for uptime levels close to 100% by implementing redundant systems, failover mechanisms, and regular maintenance practices. Monitoring tools help promptly identify and address uptime issues, ensuring a seamless user experience across digital platforms.
IP Whitelisting in a Publisher’s Ad Server
IP Whitelisting in a publisher’s ad server account allows only specific IP addresses to access the account. This adds a layer of security by restricting access to authorized users or systems with approved IP addresses, helping prevent unauthorized access and potential security risks.
Programmatic Integration
Programmatic integration refers to incorporating programmatic advertising technology into digital advertising campaigns. This involves using automated systems and algorithms to buy and sell ad inventory in real time based on predefined targeting criteria and budget parameters.
Also Read: Programmatic Advertising: How to Launch a Successful Marketing Campaign!
TAG Certification
TAG certification for brand safety refers to the certification process offered by the Trustworthy Accountability Group (TAG) to ensure that digital advertising companies follow the industry standards and best practices for protecting brands from ad-related risks. Companies that obtain TAG certification are committed to maintaining a safe and transparent advertising ecosystem by implementing measures to prevent ad fraud, combat malware, promote transparency in the advertising supply chain, and uphold brand safety guidelines.
Prioritization in a Publisher Ad Server Advertising
It refers to ranking or ordering the delivery of ads based on predefined criteria. This allows publishers to control the sequence in which ads are displayed to users, ensuring that higher-priority ads, such as those from premium advertisers or with higher CPM rates, are served first. By prioritizing ads, publishers can maximize revenue opportunities by ensuring that the most valuable ads are given preference in ad delivery while still effectively managing and optimizing ad inventory across their digital properties.
Conclusion: The future of ad servers
From their humble beginnings, ad servers have evolved into powerful tools. They can now handle various ad formats, from simple text ads to rich media and video ads, and offer advanced targeting capabilities, allowing advertisers to reach their desired audience accurately.
Ad servers have improved from their initial role of serving ads to tracking ad performance and providing detailed analytics, enabling advertisers to optimize their campaigns effectively. Today, ad servers are indispensable in online advertising and are crucial in delivering and managing digital ads.
The future of ad-serving technology shows exciting advancements. One notable trend is the continued growth of programmatic advertising, which utilizes algorithms and machine learning to automate the buying and selling of ad inventory in real time.
This shift towards automation enables advertisers to reach highly targeted audiences more efficiently and cost-effectively than ever. Additionally, integrating artificial intelligence and machine learning into ad-serving-serving platforms holds promise for further enhancing ad targeting and personalization capabilities, ultimately delivering a more engaging and relevant user advertising experience.
