Ad Networks
According to eMarketer, digital advertising accounted for over 50% of media spend in 2019. To put that in perspective, that's over $120B, and this number is expected to grow to over $200B by 2023. With digital ads comprising such a large amount of media spend, it's clear that digital is the defacto medium for today's advertisers. As digital advertising continues to evolve, advertisers and publishers have turned to third parties to facilitate the process of buying and selling digital ads. Hence, the emergence of Ad Networks -- filling a gap in the ecosystem by providing the infrastructure to deliver on data/targeting, efficiencies, and scale in an increasingly fragmented and difficult to monetize economy. The first Ad Network launched in 1996, and while Ad Networks’ capabilities, offerings, and services have transformed over time, the premise has remained the same. Let’s explore what an Ad Network is, how Ad Networks operate, and the benefits Ad Networks offer.
What is an Ad Network and how does it work?
An Ad Network can be defined as a tech platform that mediates the sale of ad inventory between publishers and advertisers.
In other words, they act like a broker, in which they collect high volumes of impressions from numerous publishers and sell them to advertisers.
Traditionally, Ad Networks would offer their impressions at a much lower price than publishers’ direct sales, thereby coining the terms “non-premium” or “remnant” inventory. However, as the industry has evolved, Ad Networks have begun offering advertisers more exclusive inventory from top-tier publishers and packaging it up at premium prices.
How do Ad Networks work with publishers?
Publishers benefit from working with Ad Networks because it gives them the opportunity to sell inventory that they are unable to sell via direct sales without heavily discounting and losing out on dollars. Unsold inventory is a sunk cost and lost revenue for the publisher. If a publisher can improve its fill rates as close to 100% as possible by working with an Ad Network, then it remains a valuable partnership. The auction mechanics that are put into place via an Ad Network allow for publishers to generate immediate value by making their inventory available for sale, while also ensuring they’re finding the right buyer who is willing to pay the highest price for that inventory.
How do Ad Networks work with agencies and advertisers?
Agencies are responsible for planning and managing buys for advertisers they work with across various supply sources. Depending on the type of inventory an Ad Network offers (e.g. desktop, mobile, in-app), an agency will request a proposal from potential supply partners so they can ultimately make a decision on which partners should be part of the final campaign strategy. If an Ad Network is included in a plan, then campaign setup and delivery will be handled by the Ad Network to deliver the client’s ads to its desired audience across the publishers agreed upon in the campaign strategy.
Although Ad Networks were originally designed to help publishers sell unsold inventory, there are several benefits passed on to advertisers:
Scale & Efficiency
An Ad Network serves as a central hub for inventory from numerous publishers, so that an advertiser only needs to manage one campaign vs. managing campaigns set up with each individual publisher.
Frequency Capping
Can be managed across multiple publishers instead of at the individual publisher level. For instance, if an advertiser wants to limit exposure of their ad to 3 times per user per day, an Ad Network can accomplish this task across the entire network of websites. Direct publisher campaigns pose a risk of higher frequency as there is a lack of tracking users as they jump from publisher to publisher.
The convenience for advertisers to access desired inventory across hundreds of websites from a singular Ad Network is attractive. Advertisers can use an Ad Network’s campaign management platform to create a campaign with their targeting requirements, budget, frequency caps, etc. The Ad Network has its ad tags implemented on each of the publishers it partners with, which allows for the delivery of ads for campaigns where the advertiser’s targeting criteria matches the publisher’s impressions.
Choosing an Ad Network
Features to look for
As an advertiser, choosing an Ad Network to partner with can be overwhelming. There are a vast number of Ad Networks in the market, so it is important to know what to look for when choosing the right partner.
Inventory Type & Quality
Ad Networks can offer access to different platforms or types of inventory (ie. mobile-only, in-app, desktop-only, cross-screen). Additionally, Ad Networks can represent varying degrees of inventory quality, with some prioritizing higher-quality inventory from top tier publishers at a premium cost, while others focus on efficiencies and scale through remnant, unsold inventory. Before choosing an Ad Network to partner with, ensure that the type and quality of inventory offered aligns with your objectives and goals.
Scale
In addition to inventory quality, the size or reach of the Ad Network is an important factor to consider. Generally speaking, the more traffic an Ad Network sees, the greater the efficiencies they are able to offer, resulting in potentially a better ROI for your campaign.
Creative Formats
What ad formats are you looking to activate? A simple display ad? Native? Video? A social-inspired animated unit? Every Ad Network offers its own unique array of creative formats. When it comes to vetting Ad Networks, look for a partner that specializes in ad units that deliver on the KPIs you are looking to attain.
Audience Targeting Capabilities
From demographic to geographic, audience to behavioral, cookie-based data targeting and retargeting efforts to cookie-less contextual and sentiment-based, Ad Networks generally offer a variety of targeting abilities. As an advertiser, properly identifying and reaching your target audience is a critical factor to your campaign’s success. When choosing an Ad Network to partner with, be sure there is cohesion between your requirements and the Ad Networks capabilities.
For publishers looking to optimize their inventory and advertisers looking to streamline their campaigns, Ad Networks offer a service to help drive efficiencies in order to deliver on these goals. However, not all Ad Networks are equal. Each Ad Network offers its own unique value proposition so understanding and properly vetting potential partners to make sure their offering aligns with your goals and objectives is important to the success of your campaign.
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