Ad serving technology has come a long way since it was first introduced in 1995. Technological advancements have led to ad serving becoming the key driver in the growth of digital advertising. In this blog post we will cover: 

• What is an Ad Server?
• How are Ads monetized?
• How does an Ad Server work?
• Ad Server usage in more detail
• What is Programmatic Advertising?
• What are the Common Ad Formats?
• More about Video Ads: What are VAST and VPAID?
• What is Conversion Tracking?
• What Third-Party Platforms can be integrated with Ad Servers?
• What are White Label Ad Servers?
• What are the Key Features an Ad Server should have?
• Which is the Best Ad Server?

What is an Ad Server?

In basic terms an ad server is the technology platform used for serving ads to online media, be it websites, social media, apps or video platforms, known as Publishers. Ad servers allows Publishers to create ad zones within their content which are then sold via the ad serving platform to Advertisers who bid for the ad zone, the highest bidder wins the ad zone. Ad serving platforms are used by individual Publishers who want to monetize their content with various ad zones, Advertisers, who want to promote and sell products to end users viewing the publisher site and Ad Networks who want to act as the ‘middlemen’ by monetizing a network of Publisher and Advertiser clients.

How are Ads monetized?

For the purpose of keeping things simple, we will concentrate on the main types of monetisation of ads:

• Cost per thousand (CPM) refers to the cost an advertiser pays per one thousand advertisement impressions on a web page. An impression is a metric that counts the number of ad views or viewer engagements that an advertisement receives.
• Cost per click (CPC) refers to the cost an advertiser pays based on the number of times a website visitor clicks on the ad.
• Cost per view (CPV) is for video advertising only and refers to the cost an advertiser pays if an end user views the video ad for a certain amount of seconds.

How does an Ad Server work?

When an end user visits a Publisher’s website or app, it begins to load. The browser sends an ad request to the Publisher’s ad server to fill in an ad placement on the webpage. So let's say the Publisher has a banner display ad zone, the Publisher’s ad server selects a relevant banner ad creative from a campaign that is matched with the Advertisers set targeting parameters. If it matches, and is the highest bid, the winning banner ad is displayed on the Publisher's ad zone for the end user. The ad impression, end user click or end user view is registered by the ad server and appears in the advertisers dashboard in real-time, everything happens in milliseconds.

Ad Server usage in more detail

Publishers use an ad server to manage where their ad placements will be displayed on various web pages, what the ad format for each ad zone is, for example display formats such as Banners and Interstitials, Video, Native, Push Notification, Popunders, etc. It gives Publishers full control over their ad inventory with access to statistics for each ad format and ad zone. As well as the ability to optimize ad zones for maximum revenue potential. This is known as a 1st-party ad server, because the Publisher is supplying the inventory to sell.

Advertisers use the ad server's features to upload their ad creatives for a range of different ad formats, launch campaigns with a range of targeting features which helps them save money by being more precise as to what type of end user they want to reach. Advertisers then bid for their targeted inventory to try to win the Publisher ad zones. Additionally Advertisers can further optimize their campaigns in real-time by tweaking the targeting features, changing their bids and getting real-time data reporting to analyse metrics such as clicks and ad creative performance. This enables the advertiser to block ad zones that have a low performance and create ad zone white lists of high performing ad zones. This is known as a 3rd-party ad server because the Advertiser is demanding the inventory to use.

Ad Networks use the ad server as a single platform to match Publishers with Advertisers to serve a large range of ads of different formats across to all devices that an end user might be browsing with. And then monitor Advertiser and Publisher metrics and performance from a single dashboard. This combines first and third party ad servers in one place.

What is Programmatic Advertising?

Programmatic advertising is an automated process of buying and selling online advertising using various programmatic software platforms. A programmatic ad server allows publishers and advertisers to plug in their programmatic software platforms, these software platforms make decisions about when, where and to whom to display the programmatic ad impression. 

• SSPs: As previously explained a Publisher ad server is known as a first-party ad server, in programmatic it is referred to as a “supply-source” and publishers use platforms called SSPs (supply-side platforms) to manage the programmatic selling of their ad inventory.
• DSPs: For advertisers, which we explained use a third-party ad server, in programmatic this is referred to as a “demand source” and advertisers use DSPs (demand-side platforms) to manage their programmatic media buying. 

In digital advertising, the term “programmatic” is frequently used interchangeably with the term “automated”, meaning that once the terms of an advertising deal are locked-in, a programmatic ad campaign is executed automatically according to those terms. The bidding happens in milliseconds via Real-Time Bidding (RTB) also called RTB programmatic, which uses real-time buying and selling of ad impressions through auctions that occur in the split-second it takes for a website to load.

Publisher benefits of Programmatic Advertising

• Allows publishers to reach a wider range of advertisers by plugging in to one or more SSPs
• Automates selling both premium and remnant ad inventory to maximize inventory fill.
• Automated pricing calculations that optimize the value of available ad inventory.
• With predefined user targeting options, ad relevance is improved, increasing user engagement and CTRs for ads, which leads to better eCPMs and increased revenues.
• Real-time stats reports to develop business strategies such as blocking or allowing specific  advertisers/products, ad technologies, or ads served to different regions.

Advertiser benefits of Programmatic Advertising

• Allows advertisers access to a bigger marketplace of publishers by plugging in to one or more DSPs.
• Using programmatic software means there is very little human campaign optimization because the software uses set parameters, campaign data, artificial intelligence/machine learning to optimize a programmatic campaign’s performance over time.
• Advertisers can set up campaigns that only show ads to specific end users that match certain targeting criteria, thus enabling bidding on a per impression basis, not wasting impressions/budgets
• Offers scalable and flexible spending, allowing advertisers to scale up campaigns or reduce spending whenever appropriate.
• Real-time stats reports give full visibility over campaigns to see where ads are being displayed and conversion data to adjust campaigns in real-time to fine-tune performance.

What are the Common Ad Formats?

The Interactive Advertising Bureau (IAB) is an organisation that represents the digital marketing and advertising business ecosystem, providing the framework for the technological specifications and best practices of implementing the various ad formats used within the online advertising industry. An ad server should provide IAB industry standard ad formats. Because Chrome is by far the most popular web browser, ad formats should also be fully compliant with regulations set by Google and the Better Ads Coalition. These regulations are put in place to provide a great end user experience when viewing websites and their ad zones. The most popular types of ad formats include:

• Display ads such as Banners, Interstitials, Popunders which can be static images, gifs or MP4 creatives. 
• Native ads which contain a static image and texts (title and description) and appear like the editorial content of a website.
• Push Notifications which are displayed to a website’s users who have opted-in and subscribed to wanting to receive this ad format.
• Email marketing, that send emailed ads to a website’s users who have opted-in to wanting to receive email marketing ads.
• Video In-Stream: These are videos that are shown to an end user before, during or at the end of watching a piece of video content, just like Youtube. 
• Video Slider: This video format slides in to the screen, displaying a video ad
• Outstream Video: This video ad is triggered as an end user scrolls through a website

More about Video Ads: What is VAST and VPAID?

Serving ads into video players is different to serving ads into other parts of a website, this is why VAST was created for the ad industry. VAST stands for Video Ad Serving Template and it provides a generic framework for embedding in-stream and in-video ads. It is designed to facilitate and standardize the communication between video players that are embedded on a publisher’s website to display videos and ads with a video ad server.

The video ad server is used by advertisers to host and serve their video ads and count their impressions, views, clicks and other data. Based on ad requests from a VAST tag, the video ad server will return the ad creatives along with criteria such as how the video ad will be played (e.g. pre-roll, mid-roll, post roll and on-pause) along with all the tracking metrics.  

VAST Wrappers are common in the video ad serving industry. One of the benefits of using a VAST wrapper is that it allows a third party to insert their own tracking events and receive notification of when certain events occur (for example, when the video starts to play, video completion, clicks, etc).

A video player will receive the initial VAST response and if it is a wrapper it will continue to follow the chain of VAST wrappers until it gets to a VAST response and then it will display the video ad. As the video player unwraps each VAST wrapper it stores all of the events contained within each VAST wrapper response. When the video plays it will fire all events (impression, video start, quartile, etc.) at the appropriate time from all of the VAST wrappers and inline VAST response.

VPAID (Video Player-Ad Interface Definition) which is a common interface between a video player and ad slots, enables additional functionality beyond standard video playback such as viewability and adding interactivity to the ad. VPAID is a specified type of file which is delivered via a VAST tag.

In order to use VAST and VPAID with video ad formats, top ad servers, such as EXADS, support these standards and can integrate seamlessly with all the main industry standard video players such as FluidPlayer, VideoJs, JWPlayer and FlowPlayer.

What is Conversion Tracking?

Conversion tracking is essential for advertisers because it identifies various parameters to evaluate how well an ad campaign is performing by tracking predefined conversion goals. It tracks each of the campaign's conversions with an accurate monetary value, it tracks metrics such as Conversion Rate, Profit, Revenue, ROI, so that an advertiser can further optimize their campaign. You can see how Conversion tracking works in our case study.

Ad servers like EXADS offer S2S (server to server) conversion tracking via an API and Pixel tracking which identifies conversion actions from a piece of HTML code on a campaign's landing page. Additionally, EXADS allows for the easy integration of industry standard third-party tracking tools for including AdsBridge, BeMob, Cake, Kochava and Voluum, to name but a few.

What Third-Party Platforms can be integrated with Ad Servers?

There are many additional third-party platforms that the ad server should offer the ability to integrate with. When using an ad serving platform like EXADS the purpose is to grow a business and create a network of clients to monetize and enable the clients that use the ad serving platform to also monetize with ease. The ad server should be able to integrate with:

• Payment platforms: PayPal, Stripe and Crypto currency platforms such as Circle, etc
• CRM platforms: Many business use dedicated CRM platforms to track sales and potential leads, integrations should include SalesForce, Hubspot, and customer help desk platforms such as Kayako, etc
• Emailing platforms: Monetizing email inventory is a lucrative business therefore there should be integration for platforms like Mailchimp, Campaigner, Moosened, etc
• Ad safety platforms: These protect the ad server and publishers from cyber criminals injecting malvertising such as Scareware, Ransomware, Phishing, Malware, Adware and many more violations into online advertising campaigns, campaign landing pages and malicious url redirects. This activity can damage an ad network’s and publisher’s reputation and revenues as well as harming innocent end users. EXADS allows integration with AdSecure, Confiant, GeoEdge, TheMediaTrust, etc

What are White Label Ad Servers?

A white label ad server platform enables any business to instantly set up their own ad network. ‘White labeling’ basically means that the business has the ability to rebrand the UI of the ad serving platform with their own logo, brand colours with primary, secondary and tertiary colours for UI buttons, labels, charts and texts along with their own unique domain for ad serving. EXADS is a white label ad server and allows you to fully brand the ad serving platform. Check out our blog post: Why Choose a White Label Ad Server?

What are the Key Features an Ad Server should have?

The more features an ad server has the more competitive it will be. Having great features will attract more clients and the ad server should have excellent documentation explaining how each feature works. 

 Key Features of Ad Serving Platforms, for Publishers

• Google and the Better Ads Coalition compliant ad formats, so that the Publishers website has a great Google ranking as well as providing a great end user experience
• Optimization to prioritize advertisers and show ads with the highest CPMs first
• Statistics to track ad zone performance, monitor metrics and see advertiser performance
• Programmatic features to integrate RTB supply from third-party partners

Key Features of Ad Serving Platforms, for Advertisers

• A large range of ad formats to create visual ads about a product or service that they are selling
• A large range of targeting features so as not to waste valuable ad impressions. For example EXADS SaaS provides targeting by GEO (including regions inside a GEO), Device, Language, Contextual, Browser, OS, Site, Keyword, IP Range, Mobile Carrier, Frequency Capping, Day-parting and Retargeting 
• Bidding optimization to fine tune budget spend
• Conversion Tracking to measure user clicks and actions to asses campaign performance
• Statistics to assess the quality of each traffic source and data generated by campaigns
• An API to enrich reports with their own data

 Key Features for Ad Networks

• White labeling, so an ad network can use an ad server as their own platform, allowing them to brand the ad server with their brand logo and brand colours. 
• Custom permissions to create accounts for Advertisers and Publishers and the ability to add or subtract available features the ad server has to suit their needs.
• A large range of IAB standards, Google and the Better Ads Coalition compliant ad formats that both Advertisers and Publishers can monetize. 
• A self service platform for clients so that they can create and adjust campaigns/ad zones manually.
• Management of publishers and advertisers invoices and payments.
• Real-time statistics to evaluate all of the network data.
• A complete API to manage all of the ad server's features and fetch statistics data.
• Full set of programmatic features to connect RTB supply and RTB demand based on standards such as OpenRTB or Prebid.

Automation Features

Ad servers can also offer automation tools for Advertisers. Working like smart assistants, these tools save time for Advertisers by automatically optimizing and A/B testing for different sales funnels throughout their campaigns. For example EXADS ad server offers the following automation features:

• Variations Optimization tool: Advertisers can select from different algorithms to send the most traffic to the best performing ad creatives
• Landing Page Optimization tool: Also allows the use of algorithms to send the most traffic to the campaigns best performing landing page
• The Bidder: This highly useful tool automatically adjusts (up/down) CPM/CPC bids according to target CPAs. The Bidder will also automatically blacklist ad zones that haven't converted when a maximum test budget is reached. Additionally Advertisers can set additional Rules to block by ad zone, browser, country, devices, language, mobile carrier, OS and site, based on their set rules for CTR, Click, Conversion or ROI.

Which is the Best Ad Server?

Choosing the best ad server depends on what your requirements from an ad server are. You can use a team of developers to build your own ad server from scratch, or build one using a third party cloud infrastructure tool. Both of these options require time and major investment. You can self-host with open source tools, or you can use a hosted, third-party white label ad server platform, like EXADS. This is the quickest and easiest option to get an ad server business up and running, with the added advantage that there is a team of developers already maintaining, optimizing and programming new features for you to use.

Top ad servers, in addition to EXADS, include Google Ad Manager, Kevel, Revive Ad Server, Smart Ad Server, Adform, EPOM Ad Server, Broadstreet and Ad Inserter for Wordpress sites. Additionally there are some long-tail third-party options, such as AdGlare, Adhese, AdPlugg, AdSpeed, AdSpirit, AdvertServe, Avid, CitrusAd, iBillboard, InClick, Lite Ad Server, UpRival and Zedo, but these tend to come with fewer features.