Welcome!

The advertising technology industry can be confusing - especially if you're new to it and being tasked with building an ad server.

This overview provides insight into the space. If you have additional questions, feel free to send us a support note or add it via 'Suggest Edits'.

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We also recommend Ad.Product's "What is Ad Tech" Guide.

Glossaries

If there's a specific ad tech word you're confused about, this doc should be helpful.

For Kevel-related terms, please visit our Glossary.

So, What's Ad Tech?

Ad tech is a catch-all word for 'advertising technology'. It refers to using technology to facilitate the buying and selling of digital advertisements ('ads').

Why Do Advertisers Buy Ads?

Fair question. There are a two main reasons:

1. Brand Awareness - These folks care about reaching the right audience with the right message. Targeting, relevance, and high-quality ads are therefore important to them. While they will likely track clicks and conversions, they usually base success on being able to deliver a set number of impressions over a certain time period.

2. Direct Response - Also known as "performance marketing", these advertisers care less about impressions and more about results - such as cost-per-click or cost-per-action (a downstream conversion). To cater to them, many ad platforms - such as Google's Adwords - offer pricing models where advertisers pay for clicks or conversions, not for impressions.

What Are The Key Advertising Metrics

While no advertiser is exactly alike, they often have similar goals. After all, they are giving you money and expect something in return. Metrics they most care about are:

How Do Advertisers Buy?

Advertisers generally buy in one of three ways:

1. Through ad networks/demand side partners, who provide turnkey access to lots of inventory (places to show ads). While the client may appear on hundreds of different sites, they only interface with one partner, rather than having to organize hundreds of direct deals.
2. Through direct deals negotiated directly with publisher, who provide special placements, custom ad units, additional targeting, etc.
3. Through self-serve portals, such as those offered by Facebook, Adwords, and others.

In #1 and #2, usually Insertion Orders are involved, which are contracts that stipulate metrics such as length of the campaign (or "flight"), amount to be paid, how many clicks/impressions the advertiser gets, etc.

In #3, there's usually an option to input your Credit Card and you pay-as-you-go.

Larger brands will also usually buy through ad agencies, who will be the ones who decide where and how to buy. Large media agencies include names like Starcom, Carat, OMD, Mediacom, and many more.

How Do Other Publishers Price Their Ads?

The most common pricing methods are CPM, CPC, and CPA (see above).

From a publisher standpoint, CPM is the safest route and most common way that direct deals are sold. As you hopefully know how many impressions your site/app gets, you can be confident on being able to deliver a certain impression number over a certain amount of time.

Cost-per-click (CPC) is riskier for publishers, since it introduces an unknown factor: click-through-rates. If you show an advertiser's ads and nobody clicks on them, you make nothing. Many large ad platforms such as Google's Adwords employ this, though, because it appeals to long-tail performance-focused advertisers.

Cost-per-action (CPA) is less common, but loved by direct response advertisers. Here, advertisers pay only for some conversion event, such as a purchase or app download. This is even riskier for publishers, since not only is there CTR concerns, but you have to think about conversion-rates too. Even if 100% of people click, if 0% of them convert, you make nothing.

What Type Of Custom Native Ad Am I Building?

With native ads - it really is up to you! However, there are certain terms (native and non-native) that you may hear from advertisers more often, which you may or may not want to build into your platform.

For a breakdown of standard ad size units as defined by the IAB (Interactive Advertising Bureau), see here.

How Do Ad Platforms Target?

Targeting is important to ensure ad relevancy and drive better performance metrics. There are many ways that ad platforms incorporate targeting. With Kevel, you can implement all of the ones listed below.

What's 3rd Party Tracking?

While we both know you aren't lying about the impressions and clicks you drove for your advertiser, THEY don't know it. So, they may ask to add special parameters to the click URL, or an impression pixel to the ad. This lets impartial third parties validate whether that impression or click did occur.

Kevel offers instructions on how to add these.

What Is Ad Operations?

Ad-Ops is the team that is setting up and managing campaigns. They often speak directly with the advertiser to determine when to start/pause, what to target, etc. Ad-Ops can be very different based on what kind of publisher or company you are, how you sell your ads, and how big your team is. Some have multi-member ad-ops teams within their company, while others outsource ad operations, or have a sales team that also handles ad operations.

What Is RTB?

RTB (or real-time-bidding) refers to the automated buying and selling of ad inventory in real time.

In OpenRTB (what most people refer to with 'RTB'), a publisher sends an ad impression to a marketplace (as the ad is loading) and hundreds, even thousands, of advertisers bid for it auction-style. The company with the highest bid wins and appears on the page. All this happens in ~200ms.

In Private Marketplaces, there's the same flow above, but the advertisers are invite-only (therefore, generally only a handful of advertisers are bidding).

In Programmatic Direct, there's no auction, just guaranteed impressions for a given advertiser, but the buying/selling is done through a RTB platform.

Major players in this space include Rubicon, Index Exchange, Mopub (Twitter), Sharethrough, AppNexus, Google, PubMatic, Nexage, and OpenX.