Definition
An ad network is a company which has relationships with a large number of advertisers and publishers. Its main purpose is to be a medium for connecting the two entities together. Thus ad network will go out and buy impressions from the publishers and run campaigns for advertisers on those impressions. They share the payment received from the advertisers with the publishers.
How it works?
Most of the ad networks manage their advertiser and publishers using one or more ad servers. They setup each publisher site and sub-sections within that site in the ad server. They then manually classify these sub-sections of the site in a pre-defined list of channels. Generally there are about a few dozen channels. A few examples are – sports, health, finance, blogs, fitness, arts, entertainment etc. Once this setup is complete, the ad network exports out the publisher tags for the publishers to deploy on their web pages. Each section of the website might get a different publisher tag. As soon as the publisher tags are deployed on the website they are ready to do business.
On the advertiser front, the ad networks get creatives (banner, text or flash ads) from the advertisers to run the campaign. These creatives are uploaded in the corresponding advertiser space on the ad server. A campaign is then created by assigning a set of creatives to it and targeting it to a set of sites, sub-sections within a site or channels within a site. Other targeting parameters might also be set depending on the advertiser insertion order (IO). These might include things like – day part targeting, geo targeting, frequency capping per user etc. Once the targeting is setup the network is ready to roll.
As soon as the publishers start receiving traffic from their users, the publisher tags loads and makes a request to the ad server. The ad server checks to see if there is an eligible campaign for these impressions. If there is one then the ad from that campaign is displayed and recorded. If there is none, then a default ad is shown. If more than one campaign qualify for the impression some ad servers can perform an auction to get the best price for that impression.
