For over a century, any content production organization - starting with newspapers, then transitioning to radio, which segued into television, and, most recently, digital content, has been propelled and funded by the space publishers sell to advertisers.
These direct transactions between publishers and advertisers have generated billions of dollars over the years and when large sums of revenue change hands, it becomes an advantageous situation for parties to capitalize by middle-manning these deals and brokering to a wider audience.
In the case of ad networks, the prime opportunity presented itself as publishers with unsold ad inventory, giving them a chance to distribute this inventory to companies looking to run ad campaigns.
At this point, you're probably thinking, "well wouldn't it just be more cost-effective to go directly to the publisher and cut out the ad network?" The easy answer is yes, but it's not that simple.
In most cases, the money it would cost to find an optimal advertiser with the audience you're looking for would probably cost you far more in the long run. This is the beauty of ad networks.
By purchasing large quantities of ad inventory, ad networks can offer marketers the best in online advertising based on their audience and the intent of the ad campaign.
It's this bridge between publishers and advertisers that make the difference between your ad campaign being fed top-tier or subpar traffic.
How do ad networks work?
Ad networks purchase large amounts of ad inventory from multiple advertisers and sell packages to marketers based on a certain number of ad impressions. This is how the average goes with most ad networks:
- You create and fund your ad network account and gain access to the ad network's campaign panel. After, you should set up your tracker or pixel, which allows you to monitor incoming data across all the ad networks you're using to run campaigns. These feed information regarding how consumers interact with your ads, ultimately allowing you to optimize and scale.
- After selecting your campaign parameters (specific targeting information and what you'd like to track) - total budget, daily budget, frequency cap, times, etc. - the publishers install tags that correlate with your selections using an ad server to store the information. This ad server also stores your ad format or creatives (different types of banner ads, different versions of videos, etc.), allowing you to interchange them at your discretion and ultimately select the best ad group based on performance.
Because publishers now use multiple sources and cross-platform ad networks exist, you're likely to find that many ad networks sell traffic sourced from some of the same advertisers.
One ad network might sell premium traffic from an advertiser, while another sells remnant, or leftover, traffic. Initially, all the traffic purchased from advertisers was considered remnants.
However, networks eventually began pre-buying ad space rather than waiting for lower-quality ad inventory. This is why most marketers test their campaigns across multiple networks.
The following example breaks down the central idea of ad networks and why they're advantageous to the marketers who use them:
If you went directly to Advertiser A and purchased ad space, you'd pay less than you would use an ad network. The advertiser makes no guarantees regarding ad impressions or clicks. You might have to sift through Advertisers A, B, and C before you get to Advertiser D, which plays your ad to the optimal audience. By using an ad network, or multiple ad networks, your ad campaigns have much higher odds of being successful from the beginning.
Types of ad networks
After ad networks began expanding their horizons and pre-buying ad space, various types of ad networks emerged, offering traffic based on different metrics or areas of focus.
Display advertising networks make up some of the widest-reaching networks on the market.
For example, Google's Display Ad Network, which is only one of many, reaches 90% of all internet users globally. Display ads are generally some type of graphic, usually, in the form of a banner ad or an animated .gif, that is in rotation on the publisher's content or website.
Examples of display ads include banner and native ads, rich media, interstitial ads, and even embedded video ads. 83% of all display ads are run programmatically; meaning an algorithm on the ad network plays a role in optimizing the advertising channels, ad spend, and other key metrics.
Search ad networks generally use the PPC (pay-per-click) model as opposed to impressions, and show ads to users based on keyword searches using different engines.
Google, Microsoft (formerly Bing), and even YouTube are all examples of companies that offer search ad placement.
Marketers place a specific price-per-click bid which caps what they're willing to pay for a user clicking on their ad.
The ad network uses a bidding system to sell the most optimal placement for your digital ads, using keywords as the focus of the bidding.
Recent online chatter has expressed a sentiment that search and PPC ad networks are less effective than they were in the past. Yet, 79% of marketers still use these ads as the primary method of driving awareness and traffic. Because bids are placed on keywords, the traffic is laser targeted, leading to high-intent consumers interacting with the ads.
It was estimated that by 2021 nearly $100 billion in ad dollars would be funneled into video ad networks. Based on the success of these ad networks, this prediction has proven to be an accurate estimation.
Video ads continue to pick up steam as consumers continue to gravitate toward all video content being the preferred means of digesting information.
Currently, video advertising is everywhere you look. If you watch streaming videos, chances are high that you see YouTube advertising on a daily basis. These ads generally play as 7-10 second pauses during the streaming video, as screen overlays (a form of video interstitial), or as display or in-picture ads during the content.
Popular video advertisers include YouTube, Hulu, and Amazon video. You can deal directly with these advertisers, but many marketers opt for video ad networks like UnRuly, SelectMedia, and AdMedia.
You can use mobile networks to promote your online store, which continues to grow in success as more consumers make their purchases via their smartphones.
Mobile ad networks usually include app publishers who are paid to provide ad space within their applications. This type of ad network has exploded in popularity and ad revenue during the last few years.
Just between 2014 and 2021, mobile ad spending grew from just shy of $30 million to nearly $280 million USD. Mobile ad networks also gave new life to Push ads as they rapidly declined in popularity with desktop users because they were seen as invasive.
However, many vertical ad networks have flourished by offering push traffic in e-commerce, Nutra, gaming, and other industries.
Social media networks
When marketers began to advertise on Facebook in record numbers, this led to a huge spike in the cost of ad space across social networks. This also includes Instagram, Snapchat, Reddit, and, most recently, TikTok.
Most marketers prefer to deal directly with the platforms themselves. However, with rising numbers and increasing costs, optimizing and scaling are not only becoming more difficult but also more expensive.
Although they don't exist in large numbers like the above-mentioned ad networks, social media advertising networks display your ads across multiple platforms, generally using AI to target the ideal audience based on behavioral targeting.
The efficiency of tracking these behavioral metrics also makes retargeting on social ad networks particularly effective as well.
Advantages of using ad networks
Ad networks offer a convenient and efficient way for businesses to reach their target audience through online advertising. By partnering with ad networks, businesses can access a large pool of potential customers and deliver their ad messages to the right people at the right time.
From cost-effectiveness to targeting accuracy, the benefits of ad networks are numerous and can significantly boost the performance of any advertising campaign. Several advantages exist for marketers who choose to leverage the power of advertising networks. These include:
By using ad networks as brokers between publishers and advertisers, marketers are able to increase their reach tenfold. Going directly to an advertiser keeps you limited to the audience and reach that only they have to offer.
By expanding your horizons through using multiple networks, you seemingly have an infinitely broader demographic at the tips of your fingers. You essentially have every niche and industry at your disposal, allowing you to use the power of those networks to laser-target your efforts.
Increased reach is only one-half of the benefits of targeting capabilities by using an ad network.
Depending on the ad network you're using, some of the targeting capabilities are nothing short of remarkable. Some of the most basic metrics marketers can target include location, age, sex, platform (mobile or desktop), and even internet browser.
However, some of the more advanced platforms allow you to drill down and hyper-target your ad campaigns. Metrics like occupation, language, specific towns and geographic zones, interests, hobbies, activities, relationship status, and many more are all options the current marketer has.
In theory, you could potentially drill down your metrics enough to target a specific user individually - or at the very least, a specific handful of people.
Ease of use
We are currently in an age where ease of use and integration are front and center in the digital world.
Many ad networks now offer integration with affiliate networks, click trackers, and even specific campaigns themselves on networks, giving affiliate marketers a point-and-click solution with no coding knowledge needed.
If you want to advertise your e-commerce or small business with the right ad network, you can create a set of ads with different graphics, fund your account, set your campaign to go live, and allow the algorithm to do most of the data analysis and testing.
In the past, marketers had to spend tens of thousands of dollars and countless hours of investing time and money into finding just one winning ad campaign.
Now, it's possible to go live with 10-20 creatives and a few hundred bucks for a testing budget and allow the algorithm to choose your winning ads based on performance.
Common challenges related to online advertising networks
While ad networks have many benefits, there are also some disadvantages to consider.
Ad networks can sometimes limit creativity and control, resulting in generic and unengaging advertisements. They may also compromise user privacy and security, which is a growing concern in today's digital landscape.
As with anything else in the digital world, using ad networks does have potential pitfalls that might affect you depending on the type of marketing you're doing. Some of these disadvantages include:
Lack of control
Using networks for advertising decreases the amount of control you have over where your ads appear.
Although the algorithm can do its best to optimize the audience that sees the ad, and you can choose niches to provide a general idea, in most cases, you're unable to handpick exactly where you'd like to display your ads.
For more seasoned, experienced advertisers, or marketers that have a seriously niched-down audience that needs hyper-targeting, this could potentially be a setback.
Potential for low-quality
Because you don't have as much control over where the ad network displays your ads, there's always the potential for low-quality traffic.
Millions of dollars in advertising budgets are wasted each year on low-quality traffic that includes bots, click exchanges, and other unsatisfactory visitors. In fact, nearly 10% of all ad spend is lost to these unsavory visitors and faux clicks.
Lower earnings for publishers
When there's a middle-man involved, one of two things usually happens; the consumer pays more, or the retailer sells for less.
In the case of ad networking, generally, it's the latter that suffers more. Because marketers are constantly looking for cheaper ad spend and maintain high-quality traffic, and the networks must also get their fair percentage of the deal, profits aren't as lucrative for publishers as they were in the past.
This doesn't present as much of a problem for larger corporations who rake in billions in ad dollars. However, for smaller bloggers and small-scale advertisers, this drop in ad revenue can have a serious effect on business.
How to choose the best ad networks
Make no mistake about it; there still is plenty of work that goes into choosing the right ad network. It's important to do your due diligence and research, so it all pays off. Use the following tips for choosing the right network:
Identify your target audience first. Start with the demographic you want to reach - this allows you to break your list of potential networks down by a fair amount.
You'll find that many times, certain networks only deal with a certain type of niche or consumer, and this gives you a solid starting point for your campaign.
Check out the ad network's inventory and targeting capability. Where do they purchase advertising space from?
You want to look for reputable names in the industry so you're sure your ads are showing up on quality websites that get not only high volumes of traffic but the high quality of traffic.
Find out how they target and what your targeting options are. How much control do you have over targeting, and how well does their AI perform?
You can find out a lot by plain old word of mouth. Look up reviews on an ad network and talk to other marketers. The proof is always in the pudding, and if they're the real deal, they'll produce real results.
An ad network may become popular overnight by providing cheap traffic, but cheap isn't always good, and in the end, the results always come out in the wash. Generally, high volume doesn't always equal high quality.
Factor in the cost and pricing models. Are you after cost per impression, cost per click, or otherwise?
It's critical that you have a clear assessment of how much you're paying and what you're paying for. It might seem minor at the time, but a few pennies per click can make or break a budget.
How ad networks impact the digital advertising landscape
Currently, ad networks have a huge influence on the digital advertising landscape. This is by default, as they're the biggest purchasers of ad space on the market.
Relationship between publisher and advertiser
Ad networks lead to a more seamless experience between publishers and advertisers.
Advertisers want to know what they're getting for their money, and ad networks act as an intermediary for this, providing quotes and packages that sometimes advertisers weren't able to provide in the past.
Nothing is guaranteed, but there's definitely more satisfaction involved when the estimates you get regarding an advertiser end up being fairly accurate.
Effectiveness and efficiency
Aside from bot traffic and low-quality clicks in general, ad networks have increased the effectiveness and efficiency of ad spending.
The two aforementioned elements would exist regardless of the presence of ad networks, and it's a risk that comes with the territory.
In fact, many ad networks are improving the methods of detecting low-quality traffic and eliminating it with more accuracy as time goes on and technology improves.
The future of ad networks seems brighter than ever. As technology continues to advance at a rapid pace and become more normal, everyday citizens are leaning toward e-commerce and other online-based businesses; ad networks are creating better ways of accommodating marketers than ever before.
As time goes on, expect consumer behavior to affect the way ads are displayed. Ad blockers have also formed a bump in quality in the advertising industry, forcing ad networks to strive for only more high-quality and less invasive traffic.
As more first-time marketers and advertisers try their hand at digital marketing, expect more user-friendly and cross-platform integration to continue to multiply. AI is also getting smarter, and when it comes to ad networks, this plays into the hands of the advertiser.
What is an ad network? Head to Mailchimp to find out first-hand what a quality ad network has to offer.
When you use Mailchimp, you're able to access our vast network of advertisers, as well as leverage manual and automated tools to optimize and scale your efforts. We offer PPC, display, email, and lots of other advertising solutions. For more information, head to our website and access free trials of different offerings we have for internet marketers.