Ad serving
From Wikipedia, the free encyclopedia
Ad serving describes the technology and service that places advertisements on web sites. Ad serving technology companies provide software to web sites and advertisers to serve ads, count them, choose the ads that will make the website or advertiser most money, and monitor progress of different advertising campaigns.
Contents |
[edit] Usage
Two types of internet companies use ad serving: web sites and advertisers. The main purpose of using an ad server is different for both of them:
For a website, the ad server needs to look through all the ads available to serve to a user who is on a page, and choose the one that will make the web site the most money, but still conform to the rules that the advertiser and web site have agreed upon. For example if a web site has 10 different advertisers that have paid for a big square ad, the ad server must decide which one to serve (or display). One advertiser may have only agreed to pay for ads from 9am - 5pm. If it is after 5pm, then the Ad Server must not serve that one. Another advertiser may only have paid to show one ad to each user per day. The ad server must therefore see if a user has seen that ad before, on that day and not serve it again if the user has seen it. Another advertiser may have agreed to a high price, but only if the person watching the page is in the United States. In that case, the Ad Server needs to check the IP address to determine if the user is in the US and then decide which is the highest paying ad for that user, in the US, at that time, given what that user has seen in the past.
For an advertiser the ad server needs to try to serve the ad that is most likely to result in a sale of the product advertised. For example if a user is viewing a page, the advertiser's ad server needs to decide from previous history, what ad that user is most likely to click on and then buy the product advertised. If the user is on a technology page, then the ad server may know that on technology types of pages, the ad that works best is a blue one with mostly text and pricing and numbers, not the green ad with a picture of a model and little text. The central ad server will therefore serve this ad, to try and get the highest probability of a sale from the ad.
Ad Serving is most complex when it is used by an Advertising Network. An advertising network buys ads from many web sites and therefore acts like an advertiser user of Ad Serving. When the network buys ads, it tries to place ads on sites where they work best. However an ad network then sells its aggregated ad inventory to advertisers. When doing this, it uses its Ad Serving software as a web site does. In this case it tries to make the most money by only running the ads from advertisers that pay most.
[edit] Central ad server
A central ad server is a computer server that stores advertisements and delivers them to website visitors. Ad servers come in two flavors: local ad servers and third-party or remote ad servers. Local ad servers are typically run by a single publisher and serve ads to that publisher's domains, allowing fine-grained creative, formatting, and content control by that publisher. Remote ad servers can serve ads across domains owned by multiple publishers. They deliver the ads from one central source so that advertisers and publishers can track the distribution of their online advertisements, and have one location for controlling the rotation and distribution of their advertisements across the web.
The central ad server was first developed and introduced by FocaLink Media Services in 1995 for controlling online advertising or banner ads. The company was founded by Dave Zinman and Jason Strober, and based in Palo Alto, California. In 1998, the company changed its name to AdKnowledge, and was eventually purchased by CMGI in 1999.
The local ad server was first developed and introduced by NetGravity in 1995 for delivering online advertising at major publishing sites such as Yahoo and Pathfinder. The company was founded by Tom Shields and John Danner, and based in San Mateo, California. In 1998 the company went public on NASDAQ (NETG), and was purchased by DoubleClick in 1999.
[edit] Ad server functionality
The typical common functionality of ad servers includes:
- Uploading creative, including display advertisements and rich media.
- Trafficking ads according to differing business rules.
- Targeting ads to different users, or content.
- Optimizing creative based on results.
- Reporting impressions, clicks, post-click activities, and interaction metrics.
Advanced functionality may include:
- Frequency capping creative so users only see messages a limited number of times.
- Sequencing creative so users see messages in a specific order (sometimes known as surround sessions.
- Excluding competitive creative so users do not see competitors' ads directly next to one another.
- Displaying creatives so an advertiser can own 100% of the inventory on a page (sometimes known as roadblocks.
- Targeting creatives to users based on their previous behavior (Behavioral marketing).
[edit] Ad Serving Terms
- CTR - Click-through rate - Ratio of actual clicks on an interactive ad as a fraction of the total impressions.
- CPM - Cost Per Thousand Impressions - Total impressions of a given advertising unit divided by 1,000
- eCPM - Effective Cost Per Mille
- CPI - Cost Per Impression - Method of monetizing advertising impressions. Refers to the cost paid per 1,000 impressions of the ad unit. Does not factor in any user interaction or response.
- PPC - Pay per click - Method of monetization. Cost paid for each click, or direct response to an ad unit.
- CPA - Cost Per Action or Cost per Acquisition - Method of monetization. Cost paid for each order, application, or other post-click response that is directly tied to interaction with an ad unit.
- ROAS - Return on Ad Spend - Total revenue less cost of audience acquisition directly related to the revenue. A Measure of direct yield on advertising.
[edit] Ad Targeting and Optimization
One aspect of ad serving technology is automated and semi-automated means of optimizing bid prices, placement, targeting, or other characteristics. Significant methods include:
- Behavioral Targeting - Using a profile of prior behavior on the part of the viewer to determine which ad to show during a given visit. For example, targeting car ads on a portal to a viewer that was known to have visited the automotive section of a general media site.
- Contextual Targeting - Inferring the optimum ad placement from information contained on the page where the ad is being served. For example, placing Mountain Bike ads automatically on a page with a mountain biking article.
- Creative Optimization - Using experimental or predictive methods to explore the optimum creative for a given ad placement and exploiting that determination in further impressions.
