Ad server – what is it and what are ad servers used for?

Ad server – what is it and what are ad servers used for?

September 10,2023 in Online Advertising Glossary | 0 Comments

An ad server is a software platform responsible for overseeing the deployment of digital advertising campaigns.

What exactly is an ad server? What’s the role of an ad server?

An ad server stores different versions of creative assets for an advertising campaign, including images, audio, and video files. It then determines which versions to display to specific users. Additionally, ad servers can gather data, such as click-through rates and impressions, offering valuable insights into an ad’s effectiveness.

In a matter of milliseconds as a webpage loads, an ad server selects the most appropriate ad to place in an available advertising slot within a mobile app or website. This selection is made from a pool of available advertisements.

Ad servers function as data-driven intermediaries, forging connections between advertisements and specific audiences by leveraging descriptive tags related to factors like geolocation, interests, and behaviors. For instance, when promoting outdoor gear, the ad server seeks individuals whose data signals an affinity for activities like hiking.

These advanced algorithms rely on a range of decision-making criteria, encompassing multiple targeting variables, the frequency of ad presentations, the placement and format of display, and the potential for generating revenue.

How does an ad server work?

In response to the escalating requirements of the digital marketing sector, ad servers have progressed beyond their initial role of merely storing and delivering ads. They have incorporated real-time decision-making capabilities and the ability to provide insights into campaign performance.

This expansion understandably leads to some uncertainty regarding how the capabilities of ad servers align with those of other advertising technology platforms.

Ad servers are different from ad networks, which collect available ad spaces from certain publishers and arrange their sales to advertisers.

The main distinction between programmatic tools like ad networks, exchanges, SSPs, DSPs, and an ad server is that an ad server handles all the necessary elements.

For publishers, it enables them to serve and manage all types of ads: direct ones, in-house promotions (house ads), and ads from various programmatic sources. For advertisers, ad servers help with creative management and tracking ads displayed on different publishers’ websites and apps.

Here’s how it works: When advertisers buy ad slots, they can upload their ad materials to the ad server of the network. Then, when a publisher’s website or mobile app requests an ad, the ad server can generate the right tags and display the appropriate ad to the specific user, all from a central location.

Many ad servers come bundled with demand-side platforms (DSPs) – the interfaces that allow advertisers to purchase inventory from publishers. A DSP relies on an ad server to store ad materials and serve them to websites and mobile apps.

Conversely, an ad server without a DSP does not enable advertisers to connect to the programmatic ecosystem, where they can participate in automated real-time bidding (RTB) auctions for ad placement.

Ad servers that don’t have the DSP interface (or an SSP, which is where publishers handle their ad space) engage in something called a “direct deal.”

In a direct deal, a publisher sells their ad space directly to an advertiser. They negotiate the terms through a more traditional, hands-on media buying arrangement.

In this process, the ad servers of both the publisher and the advertiser communicate with each other to show ads to visitors on the publisher’s website or app. It’s worth noting that even though they use the same technology, publishers and advertisers use ad servers differently.

Types of ad servers

There are two primary types of ad servers:

  1. First-party (used by publishers)
  2. Third-party (used by advertisers)

Both of these ad servers have similar technical abilities, but they serve slightly different purposes for each party involved.

To put it in simple terms, publishers employ ad servers to have direct control over where and to whom their ad space is displayed. On the other hand, advertisers use ad servers to gather and review campaign data across various networks and publishing platforms where their ads appear.

Let’s delve deeper into each type.

First-party ad servers (used by publishers)

First-party ad servers are utilized by publishers to effectively manage their own ad inventory and gauge the performance of advertisers’ campaigns in terms of revenue and conversions.

These ad servers empower publishers to oversee ad slots on their websites and apps and display ads that have been directly sold to advertisers. Additionally, publishers’ ad servers can analyze user data, encompassing factors like geolocation, language, online behavior, and demographic attributes (when users provide consent), such as age and gender.

Simultaneously, these servers process the predefined business rules that determine which ads are eligible to appear in specific slots and establish the order in which advertisers can fill them through bidding. Leveraging this data, the servers then select the most suitable ads from the highest-value advertisers to showcase in the available ad slots.

Regarding measurement, first-party servers primarily focus on evaluating how an ad performs within a particular placement on the publisher’s website or mobile app.

Third-party ad servers (used by advertisers)

Third-party ad servers serve as a tool for advertisers to indirectly work with multiple publishing platforms. They enable advertisers to store, distribute, and measure various versions of active ad campaigns.

Advertisers often use these ad servers as an effective way to experiment with different creative variations and measure how their campaigns perform across different placements.

Here are some benefits of using third-party ad servers:

  1. Streamlined creative management – advertisers can manage their creative materials without the need for constant updates with publishers.
  2. Efficient template creation – they can develop templates to quickly generate new creatives that meet the diverse requirements of various publishing platforms.
  3. Testing variations – advertisers can test multiple versions of the same campaign to determine which one works best for specific target audiences and on particular platforms.
  4. Real-time optimization – campaign delivery can be optimized in real time for better results.
  5. Frequency control – advertisers can limit how often a single ad is shown to a user through frequency capping.
  6. Budget management – ad spend can be evenly distributed across different placements within a specified timeframe.
  7. Comprehensive data collection – advertisers can gather detailed data about campaign performance across all their placements, leading to more transparent and accurate reporting compared to relying solely on each publisher’s data.
  8. Traffic and engagement analysis – this data allows for the measurement of traffic and engagement across multiple sources, helping optimize future advertising spend.
  9. Centralized insights – all key metrics and insights are consolidated in one location, facilitating efficient reporting.

In essence, third-party ad servers provide advertisers with a powerful tool to effectively manage and optimize their ad campaigns across various platforms, ultimately leading to more efficient and data-driven advertising efforts.

Understanding hosted vs. self-hosted ad servers

When it comes to ad servers, you have two main options: hosted and self-hosted. The difference between them is quite simple:

Hosted servers

    • Pros:
      • You don’t need much technical knowledge because an external service provider handles most of the work and offers training and support.
      • The provider keeps an eye on your server’s speed and reliability and takes responsibility for addressing any issues.
    • Cons:
      • This higher-touch service typically comes at a cost.
      • You have limited control over data ownership and customization options.

Self-hosted (or open-source) servers

    • Pros:
      • You pay a one-time setup fee and then handle ongoing server maintenance costs.
      • You have full control over your data and can fully customize both the front-end and back-end aspects.
    • Cons:
      • Installation, customization, and support require dedicated technical expertise.
      • An open-source server might lack certain features, necessitating the use of additional plug-ins to achieve the desired functionalities.

Choosing between these two options depends on factors like how much control you want, the associated costs, the speed of implementation, and how user-friendly the solution is for you.

Best ad server platforms

When it comes to ad server platforms, there are several options available for both first-party and third-party ad serving. Here are a few notable names that stand out for their scale and quality:

  1. DoubleClick (now Google Ad Manager):
    • DoubleClick, now known as Google Ad Manager since 2018, remains a top choice for publishers. Google acquired DoubleClick in 2008.
    • It effectively combines two services: DoubleClick for Publishers (DFP) and DoubleClick Ad Exchange (AdX). Additionally, it offers DoubleClick Campaign Manager (DCM) for advertisers and agencies.
  2. OpenX:
    • OpenX is an integrated SSP (supply-side platform) that combines an ad server with a real-time bidding exchange for programmatic ad placements.
  3. Kevel:
    • Kevel is an open-source platform used by some of the world’s most heavily visited websites, such as Reddit and Ticketmaster.
    • What sets Kevel apart is its DIY approach, offering a wide range of APIs for building highly customized ad server solutions. However, this also means it requires dedicated internal expertise and management.
  4. ironSource:
    • ironSource focuses specifically on in-app advertising within the mobile gaming industry.
  5. Google and Facebook self-serve platforms:
    • Google and Facebook have self-serve ad platforms that allow advertisers, especially small businesses, to log in and set up their own ads and campaign management.
  6. AdMob:
    • AdMob, owned by Google, specializes in mobile app advertising. It offers a wide range of ad formats, including banner ads, interstitials, and rewarded video ads, allowing app developers to monetize their mobile applications effectively.
  7. AppNexus (Now Xandr):
    • AppNexus, now part of Xandr, provides a comprehensive suite of digital advertising solutions. It serves both publishers and advertisers, offering real-time bidding (RTB) capabilities, programmatic advertising, and data-driven insights.
  8. SmartyAds:
    • SmartyAds is an end-to-end programmatic advertising platform that caters to advertisers, publishers, and ad agencies. It offers a variety of ad formats, targeting options, and tools for campaign management and optimization.
  9. Revive Adserver:
    • Revive Adserver is an open-source ad-serving platform designed for publishers, advertisers, and ad networks. It allows for efficient ad management, targeting, and tracking while offering flexibility through its open-source nature.
  10. Rubicon Project (Now Magnite):
    • The Rubicon Project, now part of Magnite, offers a global exchange for programmatic advertising. It connects publishers and advertisers to optimize ad inventory and maximize revenue through real-time auctions and data-driven insights.
  11. Adform:
    • Adform is a comprehensive ad tech platform that provides solutions for advertisers, agencies, and publishers. It offers features like data management, ad serving, and programmatic buying to enhance the efficiency of digital advertising campaigns.
  12. Sizmek (Now Amazon Advertising):
    • Sizmek, now part of Amazon Advertising, offers an array of ad solutions, including creative optimization, data-driven targeting, and ad serving. It empowers advertisers to deliver engaging and effective campaigns across various digital channels.

These platforms vary in their features and specialties, so the choice depends on your specific needs and objectives. Whether you’re a publisher, advertiser, or part of a different business, there’s likely a platform that suits your requirements in the dynamic world of digital advertising.

How to choose the right ad server for your needs

Wondering which ad server is the best fit for your requirements? Your role and position in the market will play a significant role in guiding you toward the ideal solution for your business. As you evaluate your specific needs, the crucial factor to consider is the amount of time and effort you’re willing to invest in implementing a solution that aligns with your goals.

For publishers – publishers should look for platforms that support rich media ad formats and provide self-serve account management options for advertisers. Optimization tools that help prioritize high CPM (cost per mile) ads are also essential.

For advertisers – advertisers should focus on features like conversion measurement, optimization capabilities through A/B testing, robust analytics, and possibly APIs that enable advanced customization.

For ad networks – ad networks may be interested in white-label solutions, custom permissions, and support for a diverse range of ad formats.

By assessing your unique needs and considering your role in the advertising landscape, you can make an informed choice about the ad server that best serves your objectives.

Key information about the term “ad server” to remember

  • Imagine ad servers as the behind-the-scenes engines that drive the entire digital advertising world, much like web servers do for websites. The process they manage is intricate, involving a web of interconnected technologies. When everything runs smoothly, you might not even notice, but if something goes awry, it can have a significant impact.
  • Depending on your business goals, ad servers utilize their core capabilities in various ways to assist you in overseeing your digital marketing endeavors. Whether you’re a publisher or an advertiser, an ad server can act as a dynamic control center for efficiently managing your ad inventory, creative materials, and partnerships.
  • When you own your ad server, you also possess your data. In this sense, your ad server becomes the central hub of business intelligence, processing vital information about your customers, investments, and the effectiveness of your strategies across different channels. It consolidates this invaluable data in one place, ready to inform critical decision-making processes.

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