Advertising network
Encyclopedia
An online advertising network or ad network is a company that connects advertisers to web sites that want to host advertisements. The key function of an ad network is aggregation of ad space supply from publishers and matching it with advertiser demand. The phrase "ad network" by itself is media-neutral in the sense that there can be a "Television Ad Network" or a "Print Ad Network", but is increasingly used to mean "online ad network" as the effect of aggregation of publisher ad space and sale to advertisers is most commonly seen in the online space. The fundamental difference between traditional media ad networks and online ad networks is that online ad networks use a central Ad server to deliver advertisements to consumers, which enables targeting, tracking and reporting of impressions in ways not possible with analog media alternatives.
market, forecasted to grow to 18% by 2010. This growth has resulted in many new players in the market, and has encouraged acquisitions of ad networks by large companies entering the market.
Ad networks are primarily involved in selling space for online ads to appear. This online advertising inventory comes in many different forms, including space on website
s, in RSS feeds, on blogs, in instant messaging applications, in adware
, in e-mails, and on other sources. The dominant form of inventory remains to be third-party websites, who work with advertising networks for either a fee or a share of the ad revenues.
An advertiser can buy a run of network package, or a run of category package within the network. The advertising network serves advertisements from its central ad server, which responds to a site once a page is called. A snippet of code is called from the ad server, that represents the advertising banner.
Large publishers often sell only their remnant inventory through ad networks. Typical numbers range from 10% to 60% of total inventory being remnant and sold through advertising networks.
Smaller publishers often sell all of their inventory through ad networks. One type of ad network, known as a blind network, is such that advertisers place ads, but do not know the exact places where their ads are being placed.
Large ad networks include a mixture of search engines, media companies, and technology vendors.
There are two types of advertising networks: first-tier and second-tier networks. First-tier advertising networks have a large number of their own advertisers and publishers, they have high quality traffic, and they serve ads and traffic to second-tier networks. Examples of first-tier networks include the major search engines. Second-tier advertising networks may have some of their own advertisers and publishers, but their main source of revenue comes from syndicating ads from other advertising networks.
While it is common for websites to be categorized into tiers, these can be misleading. While Google is in the clear majority of advertisement impression served, other networks that could be labeled as tier 2 actually dominate over these tier 1 ad networks as far as the number of customers reached.
Overview
The advertising network market is a large and growing market, with the top 20 companies earning about $2 billion in revenues during 2007. This represents around 13% of the total display advertisingDisplay advertising
Display advertising is a type of advertising that typically contains text , logos, photographs or other images, location maps, and similar items. In periodicals, display advertising can appear on the same page as, or on the page adjacent to, general editorial content...
market, forecasted to grow to 18% by 2010. This growth has resulted in many new players in the market, and has encouraged acquisitions of ad networks by large companies entering the market.
Ad networks are primarily involved in selling space for online ads to appear. This online advertising inventory comes in many different forms, including space on website
Website
A website, also written as Web site, web site, or simply site, is a collection of related web pages containing images, videos or other digital assets. A website is hosted on at least one web server, accessible via a network such as the Internet or a private local area network through an Internet...
s, in RSS feeds, on blogs, in instant messaging applications, in adware
Adware
Adware, or advertising-supported software, is any software package which automatically plays, displays, or downloads advertisements to a computer. These advertisements can be in the form of a pop-up. They may also be in the user interface of the software or on a screen presented to the user during...
, in e-mails, and on other sources. The dominant form of inventory remains to be third-party websites, who work with advertising networks for either a fee or a share of the ad revenues.
An advertiser can buy a run of network package, or a run of category package within the network. The advertising network serves advertisements from its central ad server, which responds to a site once a page is called. A snippet of code is called from the ad server, that represents the advertising banner.
Large publishers often sell only their remnant inventory through ad networks. Typical numbers range from 10% to 60% of total inventory being remnant and sold through advertising networks.
Smaller publishers often sell all of their inventory through ad networks. One type of ad network, known as a blind network, is such that advertisers place ads, but do not know the exact places where their ads are being placed.
Large ad networks include a mixture of search engines, media companies, and technology vendors.
Types of ad networks
There are 3 main types of online advertising networks:- Vertical Networks: They represent the publications in their portfolio, with full transparency for the advertiser about where their ads will run. They typically promote high quality traffic at market prices and are heavily used by brand marketers. The economic model is generally revenue share. Vertical Networks offer ROS (Run-Of-Site) advertising across specific Channels (example: Auto or Travel) or they offer site-wide advertising options, in which case they operate in a similar fashion to Publisher Representation firms.
- Blind Networks: These companies offer good pricing to direct marketers in exchange for those marketers relinquishing control over where their ads will run, though some networks offer a "site opt out" method. The network usually runs campaigns as RON or Run-Of-Network. Blind networks achieve their low pricing through large bulk buys of typically remnant inventory combined with conversion optimizationConversion optimizationIn internet marketing, conversion optimization, or conversion rate optimization is the method of creating an experience for a website or landing page visitor with the goal of increasing the percentage of visitors that convert into customers...
and ad targeting technology. - Targeted Networks: Sometimes called “next generation” or “2.0” ad networks, these focus on specific targeting technologies such as behavioral or contextual, that have been built into an Ad server. Targeted networks specialize in using consumer clickstreamClickstreamA clickstream is the recording of the parts of the screen a computer user clicks on while web browsing or using another software application. As the user clicks anywhere in the webpage or application, the action is logged on a client or inside the web server, as well as possibly the web browser,...
data to enhance the value of the inventory they purchase. further specialized targeted networks include social graphSocial graphThe social graph is a term coined by scientists working in the social areas of graph theory. It has been described as "the global mapping of everybody and how they're related"...
technologies which attempt to enhance the value of inventory using connections in social networks.
There are two types of advertising networks: first-tier and second-tier networks. First-tier advertising networks have a large number of their own advertisers and publishers, they have high quality traffic, and they serve ads and traffic to second-tier networks. Examples of first-tier networks include the major search engines. Second-tier advertising networks may have some of their own advertisers and publishers, but their main source of revenue comes from syndicating ads from other advertising networks.
While it is common for websites to be categorized into tiers, these can be misleading. While Google is in the clear majority of advertisement impression served, other networks that could be labeled as tier 2 actually dominate over these tier 1 ad networks as far as the number of customers reached.
Mobile ad networks
In addition to online ad networks, there are ad networks that focuses on serving ads on the mobile web and within mobile apps.See also
- Ad exchangeAd exchangeAd exchanges are technology platforms that facilitate the bidded buying and selling of online media advertising inventory from multiple ad networks. The approach is technology-driven as opposed to the historical approach of negotiating price on media inventory...
- Ad servingAd servingAd 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...
- Online advertisingOnline advertisingOnline advertising is a form of promotion that uses the Internet and World Wide Web to deliver marketing messages to attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, blogs, Rich Media Ads, Social network advertising, interstitial...
- Contextual advertisingContextual advertisingContextual advertising is a form of targeted advertising for advertisements appearing on websites or other media, such as content displayed in mobile browsers...
- List of advertising networks
- List of mobile advertising networks