{"id":937,"date":"2022-10-17T23:12:32","date_gmt":"2022-10-17T23:12:32","guid":{"rendered":"https:\/\/newormedia.com\/blog\/?p=937"},"modified":"2024-11-15T23:13:29","modified_gmt":"2024-11-15T23:13:29","slug":"what-is-ad-server","status":"publish","type":"post","link":"https:\/\/newormedia.com\/blog\/what-is-ad-server\/","title":{"rendered":"What is an Ad Server?"},"content":{"rendered":"

An ad server is ad tech that allows websites and mobile apps to display ads. Ad servers store and serve ads and manage the creative components of ad campaigns.<\/p>\n

The online advertising ecosystem can be complex, especially when it comes to programmatic advertising, and the ad server is an important piece.<\/p>\n

Here\u2019s how it works.<\/p>\n

Advertisers use demand-side platforms (DSPs) and configure ad campaigns, using such tools as targeting, segmenting, budgeting, and bidding. In other words, marketers tell DSPs what they want to buy and how much they are willing to pay for it.<\/p>\n

Publishers use supply-side platforms (SSPs) to list the inventory they have for sale, offering data for targeting and context, and set prices they are willing to accept.<\/p>\n

In the middle is an ad exchange that plays a matchmaker between DSPs and SSPs.<\/p>\n

When a user browses a site with ads, it sends an ad request. The ad exchange acts as a virtual marketplace, bringing together both supply and demand to buy and sell digital advertising inventory. The ad exchange looks at the ad inventory that\u2019s on the site, looks for relevant ads to show, and facilitates real-time bidding (RTB). This all happens in milliseconds.<\/p>\n

Once the winning bid is accepted, the ad server will deliver the most relevant creative, allowing advertisers to get their message out and monetization of publisher sites.<\/p>\n

Publishers may also employ ad networks, which can aggregate inventory across multiple ad exchanges to maximize competition and bidding for available ad units. This tends to lead to higher cost per thousand (CPM) rates and fill rates.<\/p>\n

Interested in learning more about boosting your ad revenues? Check out our related article, How to Increase Ad Fill Rates.<\/p>\n

How Do Different Types of Ad Servers Work?<\/strong><\/h2>\n

There are two types of ad servers:<\/p>\n

    \n
  1. First-party ad servers (known as publisher side or publisher ad servers)<\/li>\n
  2. Third-party ad servers (known as advertiser side or advertiser ad servers)<\/li>\n<\/ol>\n

    While both will handle ad management, both ad serving platforms have distinct differences.<\/p>\n

    The first-party ad server is used for designating ad placement, generating ad tags, inventory management, and serving the ads on publisher sites. The third-party ad server is used for targeting, campaign management, analytics, and ad optimization.<\/p>\n

    First-Party Ad Servers<\/strong><\/h3>\n

    A first-party ad server handles serving ads on publishers\u2019 websites and apps. It is a physical piece of hardware that\u2019s owned or operated by a publisher. Many publishers own their first-party ad server, which is a self-serve or self-hosted server. Other publishers will choose to outsource to a vendor for the ad serving process using a hosted ad server but will maintain control of the server.<\/p>\n

    This type of server allows publishers to manage their ad slots on their websites, along with the ad serving process, including the ad placement that they\u2019ve sold directly to advertisers. In either case, first-party advertising ad servers will act as a management platform to decide what codes to service in the available ad units. This type of server will decide which ads to display and will also collect data such as ad impressions or the number of clicks.<\/p>\n

    The main goal of a first-party ad server is to help monetize a publisher\u2019s digital property, automating the process of serving ads via the publisher\u2019s web server. The data generated can help publishers track important metrics, such as inventory forecasting and revenue projections.<\/p>\n

    Here\u2019s how first-party ad servers work:<\/p>\n

      \n
    1. When a user visits a website, the browser sends a request to a publisher\u2019s web server to show the site.<\/li>\n
    2. The publisher\u2019s web server renders the page and shows it to the user.<\/li>\n
    3. If the page contains ad units, the web server will be sent an ad request (ad call) to the publisher\u2019s ad server to fill the ad unit.<\/li>\n
    4. The publisher\u2019s ad server will choose the right ad to show based on user information and parameters set by both the publishers and advertisers.<\/li>\n<\/ol>\n

      After these four steps are completed, the first-party ad server will send an ad tag to the website telling it what to display and to track performance. It will show the appropriate ad. However, there are additional steps if a third-party ad server is also used.<\/p>\n

      Third-Party Ad Servers<\/strong><\/h3>\n

      Third-party ad servers are used by advertisers and agencies to manage ad performance and campaign management. They also work in concert with first-party ad servers, using application programming interfaces (APIs) to send data back and forth.<\/p>\n

      When an advertiser is awarded the winning bid for banner ads, native ads, video ads, or other ad formats, the first-party (publisher side) ad server will communicate with the third-party (advertiser side) server to grab the right creative for the ad campaign. Because ad tags are added by the publisher service, there are some limitations to the functionality.<\/p>\n

      For advertisers, however, the big benefit is collecting detailed campaign data to evaluate campaign performance and optimize advertising.<\/p>\n

      For third-party advertisers, the publisher\u2019s ad server will still complete steps one through five. However, instead of showing the ad at this point, additional steps take place:<\/p>\n

        \n
      1. The first-party ad servers will send ad markup code for the ad unit, which points to the third-party ad server.<\/li>\n
      2. The ad markup triggers a request to the advertiser\u2019s ad server.<\/li>\n
      3. The third-party ad server delivers the creative and sends the markup back to the publisher\u2019s site to display the correct ads.<\/li>\n
      4. The first-party ad server shows the ad on the website or mobile app.<\/li>\n<\/ol>\n

        Comparing First-Party and Third-Party Ad Servers<\/strong><\/h3>\n

        First-party ad servers are used by publishers and it\u2019s the start of the ad serving process. Third-party ad servers are used by advertisers to manage ad campaigns and creative details and to access campaign data and analytics.<\/p>\n

        Here\u2019s a chart that shows you the key purpose, use, and value of each type of ad server.<\/p>\n

        \n\n\n\n\n\n\n
        <\/td>\nFirst-Party Ad Server<\/strong><\/td>\nThird-Party Ad Server<\/strong><\/td>\n<\/tr>\n
        Usage<\/td>\nPublishers<\/td>\nAdvertisers<\/td>\n<\/tr>\n
        Purpose<\/td>\nServe and manage digital advertising on publisher websites and mobile apps.<\/td>\nManage creative and tracking for digital advertising appearing on publisher websites and mobile apps.<\/td>\n<\/tr>\n
        Value<\/td>\nManage digital ad units on websites and mobile apps and optimize monetization.<\/td>\nOptimization of creative to maximize performance and provide independent tracking of digital ads.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n

        It\u2019s not necessary for publishers or advertisers to use an ad server. Instead, they can use\u00a0ad exchanges and ad networks<\/a>\u00a0to fulfill that function. However, there are significant benefits that are worth discussing. Google Ad Manager, DoubleClick for Publishers (DFP), and\u00a0Newor Media<\/a>\u00a0can all handle the ad serving and facilitate the entire digital advertising ecosystem.<\/p>\n

        The Benefits of Using an Ad Server<\/strong><\/h2>\n

        Let\u2019s take a look at the benefits of using first-party ad servers for publishers and third-party ad servers for advertisers.<\/p>\n

        Publisher Benefits of First-Party Ad Servers<\/strong><\/h3>\n

        Publishers using first-party ad serving technology can leverage their first-party data to help optimize ad inventory, ad placements, and ad formats to increase effectiveness and increase ad revenue.<\/p>\n

        Publisher-side ad servers can also be an advantage when it comes to dealing with cookies. Ad blockers rarely block first-party domain requests and cookies, which improves the likelihood that ads will show even with an ad blocker in place. Also, users are less likely to clear cookies from websites they have already visited, allowing publishers to have greater insight into visitor behavior and ad targeting.<\/p>\n

        First-party ad servers also make it easier for advertisers to target clusters of users.<\/p>\n

        Some first-party ad servers also allow the creation of native ads in a self-serve mode. This lets publishers develop and manage creative elements that can blend with the look and feel of their sites.<\/p>\n

        Advertiser Benefits of Third-Party Ad Servers<\/strong><\/h3>\n

        Third-party ad servers provide significant benefits for advertisers, such as the ability to manage ad campaigns at a granular level. Advertisers can specify precise targeting and designate specific creative for audience segments. They can also configure strategies for media buying, such as frequency capping.<\/p>\n

        Because third-party ad servers work cross-platform, advertisers can also manage media campaigns that run in multiple places on one platform. In a typical ad campaign, for example, markets might be buying ad units from a variety of sources, including programmatic platforms such as DSPs, ad exchanges, and ad networks. They might also be buying some ad placements directly from website publishers or private marketplaces (PMPs).<\/p>\n

        Third-party ad servers let you control all of it from one platform and avoid having to manage campaigns separately or compile reports from different sources.<\/p>\n

        Ads are uploaded to one place and served to multiple traffic sources using ad tag scripts. This avoids having to manually upload creative elements to every place where you would want your ads to run.<\/p>\n

        Tracking ad performance is crucial for advertisers to evaluate ROI and effectiveness. With a third-party ad server, markets can audit the inventory with greater transparency. That data provides metrics for optimization, such as ad viewability by source. This can help advertisers create accept lists for high-performing sites and reject lists for poor-performing sites.<\/p>\n

        The granular level of detail allows an advertiser to continually refine its marketing strategies to improve conversions. For example, advertisers can manage A\/B and multivariate testing of campaign elements within the third-party ad servers. This allows advertisers to automatically refine campaigns for better performance. You can also deliver dynamic ads that respond to data sources or specific events.<\/p>\n

        Creative optimization could be used in many ways, such as displaying dynamic content based on:<\/p>\n