What is an Ad Network?
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. Ad networks make it possible for advertisers to buy digital ads across a slew of publisher sites and apps.
Advertising networks provide a way for media buyers to coordinate ad campaigns across dozens, hundreds, or even thousands of sites in an efficient manner. The campaigns often involve running ads over a category (run-of-category) or an entire network (run-of-network). Site-specific buys are not a major emphasis when dealing with advertising networks. In fact, site-specific buys are not even available at some networks, so as not to conflict with in-house sales reps.
The inventory of online advertising space comes in many different forms, including space on desktop and mobile websites, on blogs, mobile apps e-mails and on other media. 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.
How Do Ad Networks Work?
At the most basic level, ad networks pool inventory of unsold ads from publishers and sell it to advertisers. They earn money by taking a cut of ad revenue, sometimes marking-up inventory before selling it.
Ads are delivered to a publisher’s site by an ad network’s ad server via code on the publisher’s site that calls the ad. Performance is tracked via a tracking pixel from the ad network that the advertiser places on the conversion page(s) such as a thank you page on its site . The ad network’s ad server powers ad targeting, tracking and reporting on the campaign.
Unlike AdSense where advertisers and agencies manage bidding, targeting and optimization themselves, many ad networks manage campaigns on behalf of agencies and advertisers. In these cases, an ad network and buyer negotiate the terms of an ad buy such as audience targets, impressions (the number of times an ad is served) and average cost per impression (CPM). The ad network then executes the targeting, optimization and reporting on the campaign.