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What Is An Ad Server? How Does Ad Serving Work?

An ad server is a technology platform that stores, manages, and delivers online advertisements to websites, mobile apps, and other digital platforms. It plays a crucial role in the ad ecosystem by facilitating the process of displaying ads to the right audience at the right time, based on various targeting criteria and campaign settings. Ad servers also provide tracking and reporting functionalities, allowing businesses to measure the performance of their ad campaigns and optimize them accordingly.

Here’s an overview video from Infinitive:

Ads are typically served through three key advertising strategies:

  1. Programmatic advertising: Programmatic advertising uses automated systems to buy and sell digital advertising inventory. Ad servers with programmatic capabilities can serve ads in real-time, target specific audiences, and optimize campaigns based on real-time data.
  2. Cross-device targeting: Cross-device targeting allows advertisers to reach users across multiple devices with a cohesive ad experience. Ad servers with cross-device targeting capabilities can use data and algorithms to track user behavior across devices and serve ads accordingly.
  3. Ad retargeting: Ad retargeting allows advertisers to serve ads to users who have previously interacted with their website or other digital assets. Ad servers with retargeting capabilities can use data and algorithms to target ads to users who have already shown interest in a brand or product.

Ad servers play a crucial role in the digital advertising ecosystem by offering a range of functionalities that cater to the diverse needs of businesses. One of the primary functions of ad servers is managing ad inventory, as they help businesses organize and control their available ad inventory across multiple channels, devices, and formats. This ensures that businesses can efficiently allocate their ad resources to maximize reach and visibility.

Another vital function of ad servers is delivering targeted ads. By enabling businesses to serve ads to specific audiences based on various targeting options, such as demographics, location, device type, and interests, ad servers ensure that ads are displayed to the most relevant users. This targeted approach results in higher engagement rates and better campaign performance.

Ad servers also provide tracking tools that help businesses measure key performance indicators (KPIs) such as impressions, clicks, and conversions. These tracking tools enable businesses to analyze and optimize their ad campaigns, making data-driven decisions that ultimately improve their overall advertising outcomes.

In addition to these functionalities, ad servers play a key role in maximizing ad revenue for businesses. By serving the highest-paying ads to the most relevant audience, ad servers ensure that businesses can generate the highest possible returns from their advertising efforts. This optimization process contributes significantly to the financial success of businesses operating in the digital advertising space.

Lastly, ad servers streamline ad operations by offering a centralized platform where businesses can manage, monitor, and optimize their ad campaigns. This reduces the complexity of ad operations, allowing businesses to focus on other aspects of their advertising strategy while maintaining control and visibility over their campaigns. By simplifying ad operations, ad servers enable businesses to work more efficiently and effectively in the competitive world of digital advertising.

What Is The Ad Server Process?

Here’s a detailed, step-by-step breakdown of the ad serving process:

  1. User visits the website or app: When a user arrives at a website or app with ad placements, the process begins. The user’s device sends a request for content, including the ad spaces.
  2. Ad request: The website or app sends an ad request to the ad server, which contains information about the user, such as their device, browser, IP address, and other relevant data. This information helps the ad server to determine suitable ads based on the specified criteria.
  3. Ad selection process: The ad server analyzes the request and matches it with the available ads in its inventory. It takes into account various factors, such as targeting options, campaign settings, and pacing. It also considers the bid value and prioritizes ads with higher bids or better performance.
  4. Ad decision: Once the ad server identifies the most suitable ads, it makes a decision on which ad or ads to serve to the user. In some cases, multiple ads may be selected for a single ad placement, such as in the case of a rotating banner.
  5. Ad rendering: The ad server returns the chosen ad creative(s) along with the necessary code for displaying the ad on the website or app. This code includes tracking pixels or scripts to monitor user interactions with the ad.
  6. Ad display: The website or app then renders the ad creative(s) and displays it to the user within the designated ad slot. At this point, the user can view and interact with the ad.
  7. User interaction: If a user clicks on the ad or takes any other desired action (such as watching a video or filling out a form), this information is recorded and sent back to the ad server.
  8. Tracking and reporting: The ad server collects and processes data on impressions, clicks, and other relevant metrics. It then generates reports and analytics for advertisers and publishers to review, allowing them to evaluate the performance of their campaigns and make data-driven optimizations.
  9. Optimization: Based on the performance data, advertisers and publishers can adjust their ad campaigns, targeting options, or ad placements to improve results. This ongoing process of monitoring and optimization helps businesses achieve their advertising goals and maximize their return on ad spend (ROAS).

Features And Options Available In Ad Servers

  • Ad formats: Ad servers typically support a wide range of ad formats, such as display, video, native, and rich media ads.
  • Targeting options: Businesses can utilize various targeting options to deliver ads to specific audience segments, including demographic, geographic, contextual, and behavioral targeting.
  • Ad scheduling: Ad servers allow businesses to schedule their campaigns by setting start and end dates, as well as frequency capping to limit the number of times a user sees an ad within a given timeframe.
  • Reporting and analytics: Ad servers provide businesses with detailed reports and analytics, enabling them to monitor ad performance, identify trends, and optimize their campaigns for better results.
  • Integration capabilities: Many ad servers can be integrated with other ad tech platforms, such as demand-side platforms (DSPs), supply-side platforms (SSPs), and ad exchanges, to streamline the ad buying and selling process.

Artificial intelligence (AI) is significantly impacting and improving ad server technology by introducing advanced capabilities, automation, and data-driven insights, leading to more effective and efficient ad operations. Some key ways AI is enhancing ad server technology include:

  • Improved targeting: AI-powered algorithms can analyze vast amounts of user data to identify patterns and trends, resulting in more accurate audience segmentation and better targeting. This ensures that ads are displayed to the most relevant users, increasing the likelihood of engagement and conversion.
  • Ad verification: Ad verification technologies allow advertisers to monitor and verify that their ads are being delivered as intended, and that they are being viewed by real users. Ad servers with ad verification capabilities can detect and prevent ad fraud, as well as ensure that ads are viewable and brand-safe.
  • Real-time bidding (RTB) optimization: AI enables more efficient and precise bidding strategies in programmatic advertising by analyzing multiple factors, such as historical bid data, user behavior, and market trends. This leads to better decision-making in real-time bidding scenarios, maximizing ad revenue for publishers and return on investment (ROI) for advertisers.
  • Dynamic creative optimization (DCO): AI-driven ad servers can automatically generate and test multiple creative variations, adjusting elements like headlines, images, and calls-to-action based on user preferences and campaign performance. This dynamic optimization results in more engaging and effective ads, driving higher click-through rates and conversions.
  • Fraud detection and prevention: AI-powered algorithms can identify and flag suspicious activity, such as click fraud or viewability fraud, in real time. By detecting and preventing fraudulent activities, AI helps ad servers maintain a high-quality advertising ecosystem that benefits both publishers and advertisers.
  • Predictive analytics: AI can predict user behavior, campaign performance, and market trends, allowing advertisers and publishers to make data-driven decisions and optimize their campaigns proactively. This results in more efficient ad spend and improved overall performance.
  • Automation and efficiency: AI-driven automation reduces manual tasks in ad operations, such as campaign setup, targeting, and reporting. This streamlines the ad management process, reduces human error, and frees up time for advertisers and publishers to focus on strategic initiatives.

AI is revolutionizing ad server technology by enhancing targeting capabilities, optimizing creative elements, detecting and preventing fraud, providing predictive insights, and automating various processes, ultimately leading to improved ad performance and higher returns for both publishers and advertisers.

Popular Ad Servers That Businesses Work With

  1. AdButler: A lightweight, customizable ad server that supports various ad formats and offers targeting, reporting, and analytics features.
  2. Epom: A comprehensive and customizable ad management platform designed to streamline ad operations and maximize revenue for publishers, advertisers, and ad networks across multiple channels and formats.
  3. Google Ad Manager: A comprehensive ad management platform by Google, which combines the functionalities of DoubleClick for Publishers (DFP) and DoubleClick Ad Exchange (AdX).
  4. OpenX: A popular ad server that offers a suite of programmatic advertising solutions, including ad serving, real-time bidding (RTB), and header bidding.
  5. Smart AdServer: A full-stack platform that offers ad serving, targeting, and programmatic advertising tools for publishers and advertisers across various formats and channels.
  6. Xandr: Microsoft’s powerful ad server that provides a wide range of ad serving and programmatic advertising solutions for publishers and advertisers.

This infographic from Epom, 5 Ad Server Features That Ad Networks Love, illustrates to the most popular features that businesses benefit from when selecting an ad server:

what is an ad server

Douglas Karr

Douglas Karr is CMO of OpenINSIGHTS and the founder of the Martech Zone. Douglas has helped dozens of successful MarTech startups, has assisted in the due diligence of over $5 bil in Martech acquisitions and investments, and continues to assist companies in implementing and automating their sales and marketing strategies. Douglas is an internationally recognized digital transformation and MarTech expert and speaker. Douglas is also a published author of a Dummie's guide and a business leadership book.

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