What Is an Ad Server? Exploring the Key Role and Function of Ad Servers in Digital Advertising
Technology has undoubtedly shaped and changed how we advertise these days, and it is no wonder that increasingly more businesses turn to digital advertising to increase their revenue and success. The digital advertising industry provides innovative technology that can shorten the sales funnel and bring conversions more easily and quickly.
And this is not a bad thing, not at all. Easier ways of acquiring new customers leave marketers with more time to build new strategies and focus on maintaining their customer base rather than getting enough customers to stay up.
When it comes to digital advertising, hundreds, if not thousands, of platforms were built to help marketers deliver ads on various channels. However, one of the first types of platforms built for digital advertising is represented by ad servers. And even though the ad server is an older concept, it still is one of the most important parts of the digital advertising process. Ad servers are like the butter that can stick 2 slices of bread together – without ad servers; other platforms cannot communicate the same.
Thus, let’s talk about ad servers. What is an ad server? How does it work? And what are some of the most popular ad servers?
What Is an Ad Server?
Basically, an ad server is a technology that allows the standardized serving of ads on apps and websites. So, the ad server helps advertisers, publishers, ad networks, and ad agencies to deliver and manage online ads.
Usually, ad servers are built to make instantaneous decisions regarding what ads to serve to a user. Afterward, it provides data about what, when, to whom, and how it was displayed.
That means that the ad server does not only manage the creatives, but it can also collect various data about an ad’s performance or a website’s users and deliver reports to advertisers so that the latter has a better view of how an ad performs.
When it comes to the type of creatives, the ad server may store various campaign assets, such as audio, image, and video files. And when it is required to deliver an ad, the ad server can return to these assets and choose the most suitable variation.
Types of Ad Servers
Since the digital advertising industry began, the parties involved have divided into publishers and advertisers. To improve and standardize the ad displaying process, publishers developed first-party ad servers.
As for advertisers, to launch campaigns on many websites at once without dealing with each publisher’s ad server personally, they built the third-party ad servers.
And, of course, this technology was developed into various Ad Networks, advertiser focused demand side platforms (DSPs), and publisher focused supply side platforms (SSPs).
SIDENOTE: Check our article on Ad Network vs. Ad Exchange vs. DSP to understand how these advertising platforms are different, as well as learn how they work together.
First-party Ad Server
As mentioned before, first-party ad servers were initially developed by publishers to help manage the ads they display on their websites in an intuitive, standardized way.
Therefore, we may understand the first-party ad server as a technology owned and managed by a publisher that allows them to control their available ad slots and decide what ads to show to a user when they access the website. These decisions are made based on the data gathered by the ad servers when a user accesses the website.
These first-party ad servers can either be built by the website owner or as software created by a development company and sold to the publisher.
Third-party Ad Server
Third-party ad servers are built and managed by a, you’ve guessed it, a third-party. In this case, the publisher has only to join a network and install tags on his website for the ad server to show the advertisers’ campaigns.
Thus, third-party ad servers are used by advertisers to deliver ads to websites and apps while also allowing them to optimize and manage their campaigns. As the name suggests, these ad servers are third parties and do not have access to the websites they deliver ads to.
The big innovation and advantage it brings to advertisers and publishers is that they do not have to deal directly with each other. Advertisers can deploy campaigns on a plethora of websites and apps and track them in one place, while publishers get to show a lot more ads without directly managing creatives and such.
First-party Ad Servers vs Third-party Ad Servers
First-party and third-party ad servers are designed for 2 different approaches to internet advertising. While the publishers manage first-party ad servers, third-party ad servers are operated by a separate company that facilitates the business relationship between advertisers and publishers.
This difference in functionality varies across platforms. First-party ad servers are responsible for deciding what stored ads to show to a user and gathering data about a campaign’s performance. On the other hand, third-party ad servers provide platforms with ad creatives in the form of ad tags while also storing the creatives and enabling users to optimize and manage their campaigns
How Does an Ad Server Work?
While the concept of ad servers puts them together, first-party and third-party ad servers follow slightly different processes. So, let’s see how each one works.
How Does a First-party Ad Server Work?
First-party ad servers help publishers fill their available ad inventory by selling slots directly to advertisers. So, when a publisher has a free ad slot and a user accesses the website or app, the former sends an ad request programmatically. The ad request contains data about the user, such as their location, interests, and age, and is sent to the publisher’s ad server.
After receiving the ad request, the first-party ad server chooses a campaign that suits the user, the decision being made based on the data about the user. This is where the instantaneous decision that we’ve mentioned earlier takes place.
After choosing the campaign based on the information it got about the user, the first-party ad server loads the banner or video on the website, and the ad is displayed to the user.
How Does a Third-party Ad Server Work?
The third-party ad server displays ads in the place of the tags installed on the publisher’s website, according to an advertiser’s settings. Ad networks and similar platforms generally use them to manage an extensive group of publishers and deploy campaigns programmatically.
Usually, the publishers register their ad inventory slots with the third-party ad server. The third-party ad server is joined by advertisers who upload creatives and campaigns to the ad server. Based on the advertiser’s criteria, a campaign will be displayed to one publisher or another.
It sounds like third-party ad servers are similar to first-party ad servers. And they are. But the main difference is that all data is processed and managed by a separate entity from the publisher and advertiser.
Also, nowadays, both first-party and third-party ad servers connect to each other in some instances so that publishers get to sell more of their inventory and advertisers obtain more impressions.
However, that often leads to data discrepancies.
Ad Server vs DSP
In the first place, third-party ad servers and DSPs (Demand Side Platforms) might not seem to differ that much from one another. And it is not entirely wrong. Both types of platforms are used for digital advertising and have similar purposes. However, while ad servers are a tool for direct media buying, DSPs are used for programmatic sales.
Furthermore, the way they work makes third-party ad servers and DSPs differ from each other. Ad servers work based on daisy chaining (or waterfall), while demand side platforms use RTB (Real-Time Bidding).
Ad Server vs SSP
It is pretty clear that first-party ad servers and SSPs (Supply Side Platforms) are 2 different types of platforms that contribute to the digital advertising processes.
While supply side platforms allow and help publishers to sell the ad space available on their website or app, first-party ad servers have a pretty different purpose. Thus, the supply-side ad servers allow publishers to serve ad campaigns on their websites.
Basically, SSPs give publishers the opportunity to find suitable ads for their websites. But it is the first-party ad server that actually prepares and serves the ads on a publisher’s website.
Best Ad Servers for Advertisers
DoubleClick Campaign Manager (DCM)
DoubleClick Campaign Manager is also called Campaign Manager 360 and was developed by a tech giant, Google. The platform currently is one of the most popular third-party ad servers and offers users an extremely user-friendly platform. DoubleClick Campaign Manager allows users to launch and optimize new ad campaigns in real time.
Amazon Ad Server
Formerly known as Sizmek, Amazon Ad Server is one of the largest buy-side ad servers specially designed for professional marketers. With an overall experience of more than 15 years, Sizmek offers video ads, multi-channel online targeted advertising, and many useful features for worldwide advertisers, such as multiple users’ collaboration ability, 24/7 customer support, and many ways of optimizing a campaign.
Smart Ad Server
Founded more than 10 years ago, Smart currently provides services for advertisers and publishers. Thus, Smart offers a first-party ad server as well as a third-party ad server.
Smart Ad Server provides services for multiple formats, such as mobile, web, CTV, or video. The platform also offers native integration of its own SSP, thus widening the opportunities for publishers.
Best Ad Servers for Publishers
DoubleClick for Publishers (Google Ad Manager)
Google purchased DoubleClick for Publishers almost 15 years ago and then renamed it Google Ad Manager. At the moment, Google Ad Manager might be the most popular ad server for publishers, thanks to its overall UI and UX and the opportunities it offers to worldwide publishers. Besides, Google Ad Manager is entirely free, as many other tools Google provides.
Formerly known as Rubicon, Magnite is one of the most popular ad servers for publishers. Currently, the platform is the world’s largest independent sell-side company, and plenty of publishers decide to use it in order to monetize their websites or apps.
Worldwide publishers can manage their ad inventory seamlessly, and in addition to a user-friendly interface, Magnite offers detailed audience management tools.
Revive is a free, open-source ad server that offers many targeting options, as well as AdSense connection and many other benefits. Even though publishers are required to have a specific level of technical expertise to use Revive, as the platform is self-hosted, Revive is a great option and can be easily used once users become familiar with the processes it offers.
Digital advertising surely is the way to go these days, and while there are numerous platforms that can help both publishers and advertisers reach success, ad servers remain one of the most important parts of the digital advertising process.
An ad server is a platform that helps advertisers or publishers manage, run, show, or optimize ads. There are 2 types of ad servers in the industry: first-party ad servers and third-party ad servers.
First-party ad servers are designed for publishers and are also called sell-side ad servers. On the other hand, third-party ad servers are also known as buy-side ad servers and are built for advertisers.
While there may be some similarities between ad servers, DSPs (Demand Side Platforms), and SSPs (Supply Side Platforms), the 3 concepts differ from one another. Ad servers, SSPs, and DSPs have different purposes; thus, they serve different processes and are built differently.
Some of the most popular first-party ad servers include Google Ad Manager, Magnite, and Revive. The most widely used third-party ad servers are DoubleClick Campaign Manager (Campaign Manager 360), Amazon Ad Server, and Smart Ad Server.