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What Is an Ad Server and How It Supports the Programmatic Ecosystem

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The online advertising landscape has changed a lot over the years because of a number of technologies that have been introduced. Their aim is to solve various problems publishers and advertisers face in their everyday lives, and facilitate the entire media buying and selling process. Advertisers and publishers rely on these technologies to deliver targeted ads, combat ad fraud, improve user experience, and other.

Now, when you think about the programmatic advertising ecosystem, there’s a chance you immediately remember ad exchanges, supply-side platforms (SSPs), and demand-side platforms (DSPs). No surprise here — they are all main parts of this ecosystem. But there is also another key player you should not disregard — an ad server. You’ll discover more about it in our article!

Furthermore, this piece of advertising technology was invented more than 20 years ago — at the very beginning of online advertising. It is still relevant today as it was back then. After all, ad serving technology places ads on websites. It is one of the reasons the programmatic advertising landscape has expanded so much over the years.

Indeed, in 2019, advertisers in the United States spent almost $60 million on programmatic digital display advertising. As this market is growing every year, we think it’s high time you learn more about an important piece of the ad tech puzzle, i.e. an ad server.

So, what is an ad server?

What Is an Ad Server?

An ad server is, simply put, a technology that serves advertisements on publisher websites. Just like a web server is able to show relevant pages to the user, the ad server is able to show relevant ads to the right target audience. This is because it stores information about ads which enables it to place ads on various websites and deliver them to customers who might be interested in a product or service that media promotes.

Over the years, however, ad servers have outgrown their initial purpose thanks to developments in technology. They are no longer only pieces of software that store and transmit data. Nowadays, an ad server allows advertisers to manage and optimize their media buying activities as well. Basically, experts can use this technology to manage, serve, and track online advertising campaigns.

Managing campaigns across various formats and publishers is challenging to marketers. In order to efficiently run their ads on multiple publisher websites, it’s important to do the ad management and reporting from one source. This is where an ad server comes in.

What’s more, ad servers make instantaneous and informed decisions about which ads to display on websites. Apart from that, they also collect data that gives advertisers insight into the performance on their ads. And we know that data makes the advertising and publishing worlds go round!

The consolidation of data through one ad server allows advertisers to better understand their consumers, learn how they can reach them, and how to tailor their offering to customers’ needs and wants.

That answers the question, “What is ad serving technology?” Let’s delve deeper into this software and see how it works!

How Does an Ad Server Work?

When the popularity of the internet exploded in the mid 1990s, publishers and advertisers began to turn towards the web in order to earn a steady profit and deliver promotional content to their target audience.

At the start of online advertising, the entire ad buying and selling process took place directly and manually. It didn’t take long for publishers and advertisers to realize they needed a more efficient and easier way to manage campaigns. That’s how the first ad servers emerged in the industry.

But how does this technology work? It follows the below steps:

  1. A user visits a website and the browser sends a request to the publisher’s ad server to display an ad.
  2. Once it receives the request, the ad server examines the data it has on the user and decides which ad is appropriate for the viewer. It selects the ad based on several criteria, including age, geography, user behavior, etc.
  3. When it finds a suitable ad, it displays it to the user.
  4. Due to the ad, the marketing team has access to information relating to the user interaction with this media. They can develop their future campaigns based on this data.

We’re still not done with our ad serving 101 guide! As a publisher or advertisers, you should know that there are two types of ad servers in the programmatic advertising ecosystem.

What Are the Types of Ad Servers?

Ad servers can be divided into two categories:

  1. First-party ad servers (or publisher ad servers)
  2. Third-party ad servers (or advertiser ad servers)

While these two types rely on essentially the same technology, publishers and advertisers use them for slightly different reasons.

Publisher Ad Server

A first-party ad server is a system that enables publishers to manage ad placements and display ads that have been sold directly to advertisers via various direct programmatic advertising techniques. In case there is no direct campaign available, publishers can use the first-party server as a management platform that helps them decide which ads to serve in their ad slots.

Additionally, the publisher ad server is responsible for making various decisions. For instance, it can decide which ads to display based on their targeting parameters. Then, it serves those ads and gathers all data pertaining to them.

Advertiser Ad Server

An advertiser ad server software is a system that allows advertisers to easily track their advertising campaigns. It makes it possible for them to show ads on different publisher websites and/or apps. On top of that, this server is mainly used to collect campaign data and verify certain metrics.

Furthermore, advertisers can use the third-party ad server for creative optimizations. For example, they can change the creative used in a campaign.

Then, the third-party ad server collects all information across all publishers, ad networks, and other campaigns that run the ad. Also, it can measure and verify whether the impressions were delivered as they should have.

Final Thoughts

The ad serving technology is a crucial part of the programmatic advertising ecosystem. Without it, marketers wouldn’t be able to deliver ads to their potential customers, and publishers wouldn’t be able to earn a profit out of their ad space. This is true for video ad servers as well!

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