What is an Ad Server and How Do they Work?

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If you own or manage a website and are looking for the best ways monetize your site, there are many ways to go about doing this. Selling ads on your website can be a good way to generate income from your site’s traffic. While there are several different ways to place ads on your website, ad servers often play a crucial role in the process.

If you are ready to begin selling ads on your website, but aren’t sure where to start, how ad servers work, or what some of the other options are, then continue reading. We will review exactly what an ad server software is and what it can do for your website, how ad servers work for advertisers and website owners, and what some other ad selling options are.

What is an Ad Server?

An ad server is a part of advertising technology used by publishers, advertisers, and ad agencies and networks to run and manage online advertising campaigns. Ad servers are programmed to instantaneously make decisions about which advertisement goes where on which website. Not only do they meticulously place the ads, but they also collect data from the ads (i.e. clicks, impressions, etc.) in order for the advertisers to gain insight into the performance of their ads.

Ad servers can be used by publishers as well as advertisers, and while they are essentially the same software, they are used for slightly different reasons.

  • Publishers – First-Party Ad Servers: These ad servers allow publishers to manage ad slots on their websites, as well as display ads that have been sold directly to advertisers. This first-party ad server is responsible for making decisions about which ads should be displayed on a website. These decisions are based on data collected and reported, as well as targeting parameters. They are also used for inventory forecasting. This includes how much inventory, as well as what type, the publisher will have for sale in the future. This is based off of the current campaigns and traffic projections.
  • Advertisers – Third-Party Ad Servers: These third-party ad servers are used so that advertisers can track their advertising campaigns with ease. This can also be used to change the creative to assist in optimizing the campaign. The third-party ad server is typically used to compile all of the campaign information and data and serves to verify whether or not impressions were delivered properly. A self serve ad server is an ad server that allows customers to log in on their own and place ads there without necessarily having to contact a representative to bill them or upload their media for them.

These are, essentially, the two types of ad servers and how they work for both publishers (those that run the website) and advertisers (those that publish ads).

How do Ad Servers Work?

The process of ad serving is a bit of a complex one, but it all works together for publishers and advertisers in order for the best ads to pop up at the right time. Let’s take a look at the steps that an ad server goes through when choosing the best ads for each visitor’s viewing.

  • First, when a user visits a website or an app, a connection is made between their device and the publisher’s web server. As the website begins to load, ad tags also load and make a connection with the ad server.
  • Once the publisher’s ad server has received the ad request, it immediately analyzes all of the data gathered from that user such as their location, language, online behaviors, demographics, etc.
  • Once the data has been analyzed, the ad server sends requests to ad exchanges where buyers can bid on the ad space. The publisher’s ad server processes all of the requests and chooses the best paying one, all within milliseconds.
  • The publisher’s ad server then redirects the user’s browser to the market’s ad server and retrieves the ad creative.
  • Finally, the ad is downloaded to the page. This is known as an impression.

This entire process takes no more than one second. Ad servers work quickly and are able to choose which ads to place on every page opened within one second. Ad servers are an excellent way for both advertisers and publishers to gain traffic and generate an income.

Some of the benefits of using and ad server include:

  • Randomized ads generated
  • Easier result tracking
  • Easy to run performance tests
  • Once it’s set up, you just let it work

Using an ad server is an excellent way to publish ads on a website that are more likely to gain clicks because they are based directly on data collected from the server of the user.