The ad server market has experienced steady growth, with a $231M valuation in 2021, positioning ad servers as essential pillars of digital advertising operations. As modern ad servers evolve, accruing automated functionalities and comprehensive insights, getting ROI out of an ad server is more accessible than ever.
But understanding what ad servers are and how they work are essential to finding the ad serving solution that works best for you. This guide will equip you with everything there is to know about ad servers, from how the tech works to ad server examples. Let’s get started.
What is an ad server?
An ad server is a technology platform or system used in digital advertising to manage, deliver, and track online ads. Its key functions include placing, scheduling, and tracking ads, while also enabling precise targeting, ad rotation, and ad optimization for both publishers and advertisers.
Ad Serving: Key Terms To Know
It’s easy to conflate ad serving terminology. To fully understand the ad server ecosystem, let’s distinguish these terms from one another:
- Ad Server: Microsoft defines an ad server as “the computer or group of computers responsible for actually serving creatives to websites, or for making decisions about what ads will serve.” Ad servers can also track clicks on ads and other data. It’s common for publishers and advertisers to use more than one ad server, each equipped with different features.
- Ad Network: An ad network is “a company that serves as a broker between a group of publishers and a group of advertisers by aggregating inventory and audiences from numerous sources in a single buy.” Ad networks primarily act as intermediaries between advertisers and publishers, while ad servers are responsible for serving creatives to websites or making decisions about which ads will be served.
- Ad Exchange: An ad exchange is “an ad trafficking system through which advertisers, publishers, and networks meet and do business via a unified platform.” An ad exchange allows advertisers and publishers to use the same technological platform, services, and methods, and "speak the same language" in order to exchange data, set prices, and ultimately serve an ad. Ad exchanges are the marketplace where advertisers can purchase ad space from ad networks, primarily through real-time bidding (RTB).
- Demand Side Platform (DSP): A DSP is “technology that allows advertisers to buy impressions across a range of publisher sites, but targeted to specific users based on information including location and previous browsing behavior.” Publishers make ad impressions available through programmatic marketplaces and DSPs automatically decide which impressions make the most sense for an advertiser to buy. While DSPs have the transactional characteristics of an ad network, they automate the process of bidding on and buying ad impressions, and ad targeting, going beyond the functions of a traditional ad network.
Who uses ad servers?
An ad server is a crucial tool for publishers, advertisers, ad agencies, and ad networks to manage, optimize, and deploy ads across various platforms and devices. Ad servers act as a central hub, enabling the optimization, scheduling, and delivery of ads based on predefined campaign parameters.
Today, we see a range of different publishers using ad servers, from retail media publishers (like Target), to traditional publishers (like New York Times), to even gaming companies (like Roblox). Anyone with digital real estate can make use of their inventory to serve ads using an ad server.
What’s The Difference Between First-Party And Third-Party Ad Servers?
First-party ad servers are used by supply-side platforms (SSPs) and publishers, whereas third-party ad servers are used by demand-side platforms (DSPs), advertisers, and ad agencies. First-party and third-party ad server technology is similar; the difference lies in why they are used.
ClearCode puts it like this:
The primary difference is that a third-party ad server is used by the advertisers to aggregate all the campaign information (reporting, audience) across all publishers, ad networks & other platforms the campaign runs on, and serves as an auditing tool to measure and verify whether the impressions were actually delivered properly…"
Typically, the functions of first-party ad servers include managing ad placements and inventory, and creating ad tags which are used to match placements with specific ad creatives. Examples of first-party ad servers include Kevel, DoubleClick, and AdButler. Third-party ad servers are used by marketers to manage their campaigns and creatives, targeting, and sometimes analytics and optimization. Examples of third-party ad servers include Google and OpenX.
How Does An Ad Server Work?
An ad server operates using both an ad decision engine and an ad planning engine. The ad decision engine selects the optimal ad for display based on predefined rules and goals set by the publisher and advertiser; factors like targeting, ad format, and placement help to create these parameters. The ad planning engine works to ensure an even distribution of ad impressions over a specified time frame.
Overall, ad servers talk to each other to carry out a digital campaign within a matter of seconds. It’s also important to note that while mostly similar, there are some differences between first-party and third-party ad serving.
The First-Party (Publisher) Ad Serving Process
To illustrate how first-party ad serving works, picture this:
- You visit a website. Your computer asks the website’s computer for the page’s content.
- The website’s computer sends back the requested content and your computer begins compiling it to present to you.
- The website’s computer also gets a message asking for an ad to go on the page.
- Using information about you, like what kind of device you’re using, the website’s computer selects an ad to show you.
- The website’s computer then sends code for the ad to your computer.
- Voila! The ad shows up on the page you’re browsing.
The Third-Party (Advertiser) Ad Serving Process
- You visit a website. Your computer asks the website’s computer for the page’s content.
- The website’s computer sends back the requested content and your computer begins compiling it to present to you.
- The website’s computer also asks another computer, an ad server, for an ad to go on the page.
- Using information about you, like what kind of device you’re using, the ad server picks an ad to show you.
- The ad server sends back code that tells your computer where to find the ad.
- Your computer sends a message to the ad server for the ad code, and the ad server counts that someone saw the ad.
- The ad server sends the ad code to your computer and the ad shows up on the page you’re browsing.
Differences Between First-Party And Third-Party Ad Serving Processes
The main differences between first-party and third-party ad serving processes revolve around how ads are selected and delivered. In first-party ad serving, a website’s computer directly manages the selection and delivery of ads to users; in third-party ad serving, this task is outsourced to an external ad server by the website’s computer, creating an additional step and making for a slightly more complex process.
What About Open-Source Ad Servers?
Open-source ad servers, also called self-hosted ad servers, function similarly to third-party ad servers. They provide advertisers the ability to serve ads and collect impression, click, and conversion data. An open-source ad server, however, is free for advertisers to use, although advertisers will need to pay for the upkeep of their own servers. Since these server costs can add up, pricing should not be the main motivator behind using an open source ad server.
What’s The Difference Between First-Party And Third-Party Ad Servers?
First-party ad servers are used by supply-side platforms (SSPs) and publishers, whereas third-party ad servers are used by demand-side platforms (DSPs), advertisers, and ad agencies. First-party and third-party ad server technology is similar; the difference lies in why they are used.
ClearCode puts it like this:
The primary difference is that a third-party ad server is used by the advertisers to aggregate all the campaign information (reporting, audience) across all publishers, ad networks & other platforms the campaign runs on, and serves as an auditing tool to measure and verify whether the impressions were actually delivered properly…"
Typically, the functions of first-party ad servers include managing ad placements and inventory, and creating ad tags which are used to match placements with specific ad creatives. Examples of first-party ad servers include Kevel, DoubleClick, and AdButler. Third-party ad servers are used by marketers to manage their campaigns and creatives, targeting, and sometimes analytics and optimization. Examples of third-party ad servers include Google and OpenX.
Client-Side Vs. Server-Side Ad Serving
Another component of ad serving is whether an ad server is client-side or server-side. Let’s define them:
- Server-side ad serving: This ad serving technique is when publishers request and place ads or internal promotions on their digital properties. An ad is processed and delivered from the server that hosts the website or app, not directly from the user’s device, which allows publishers to display ads across their inventory without using coded tags.
- Client-side ad serving: This ad serving technique involves inserting ad code directly into a publisher’s page or app, usually through JavaScript ad tags or third-party mobile SDKs. When a winning ad is picked, it gets injected directly into a publisher’s site or app, where the code is placed. In client-side ad serving, the ad and ad tag are delivered to the user’s device, which then handles the rendering and ad display itself.
Problems With Client-Side Ad Serving
While third-party JavaScript ad tags may be deemed a necessary component for programmatic advertising, as there is no 100% server-side solution for programmatic, it’s crucial to understand the drawbacks of using these ad tags, especially when incorporating multiple ad codes from various vendors.
In a client-side ad serving scenario, the publisher does not oversee content, meaning that information flows freely from the site or app to the vendor. This can lead to the following problems:
Slow sites and apps
Ad tags are notoriously slow, sometimes taking a couple of seconds to load, depending on the number of ad slots, and whether asynchronous and lazy loading techniques are used. Slow loading times can lead to choppy content rendering, negative browsing experiences, and user attrition.
No revenue from ad blocked users
Ad blocking tools detect all major ad tags, preventing publishers from monetizing ad blocked users, which according to Statista, was as many as 912 million Internet users as of Q2 2023.
Hidden cookies
Any third-party script that publishers place could drop cookies without their knowledge -- which can then harvest and sell user data, violating user trust and international privacy laws. Even minimal amounts of ad tags can lead to dozens of third-party trackers.
Risk of GDPR / CCPA noncompliance
Ad tags themselves aren’t inherently non-compliant, but when the tag itself, not the publisher, determines what data to send to the vendor, publishers run the risk of facing hefty fines under privacy laws.
Risk of malware
Similarly, unless a publisher owns all the code on their site, they always face some risk of malware. If an ad tech partner gets infiltrated by malware, they can drop pesky auto-redirect ads or fake ad calls, costing publishers revenue. According to GeoEdge, Q1 2024 saw misleading offers account for 29% of “malvertising” attacks -- a noticeable increase from the 26% recorded in 2023.
Obtrusive ads
Client-side ads are not designed to seamlessly blend into a site or app; rather, to generate scalable revenue by facilitating the buying and selling of specifically-sized rectangular ads. These ads can be an eyesore, look awkwardly placed, or “pop up” unexpectedly, tarnishing the user experience.
Being beholden to Google, Apple, and others
The industry was shaken by Google Chrome and Apple Safari's decision to phase out third-party cookies, and publishers learned that relying solely on client-side vendor tags and programmatic ads for monetization created a dependency on external influences.
Ad Server Examples
Finding the right ad serving solution can be crucial for marketers looking to optimize their ad strategy. Explore these popular ad server examples to better understand what ad serving looks like in action or find a solution that works for you.
Kevel
Kevel stands out from its peers by offering ad serving solutions through a suite of APIs, which allows programmers to design, build, and launch fully customized, relevant, and non-invasive ads. Kevel provides the functionality for sponsored listings, native ads, internal promotions, DOOH, and more, and is trusted by clients like Flink and Yelp.
Google Ad Manager (GAM), Previously DoubleClick for Publishers
Google Ad Manager (GAM) is Google’s flagship ad server and one of the most prominent players in the market on name alone. GAM offers a robust platform for publishers while Campaign Manager 360, also from Google, provides ad management and measurement features -- albeit, with premium options and CPM fees.
Amazon Ad Server
Amazon Ad Server is a third-party platform that caters to advertisers and agencies. With multichannel capabilities, Amazon Ad Server facilitates campaign management, creative optimization, and performance measurement across various digital channels.
AdButler
AdButler is a flexible, self-serve marketplace and programmatic SSP. With adaptable pricing models and a connected TV (CTV) ad server, InnovidXP, AdButler provides marketers with impression-based insights for cross-platform TV measurement.
Criteo
Criteo is a digital advertising platform that offers online display ads, using data to target and retarget potential customers. Criteo’s advertising technology can help deliver targeted, relevant ads to consumers across various devices, including computers, tablets, and smartphones.
CitrusAd
CitrusAd is an e-commerce ad platform that enables retailers and brands to promote their products across online marketplaces and retailer websites. CitrusAd also offers instore placements, and reporting and live tracking capabilities.
Topsort
TopSort is a data management tool that helps streamline the sorting and organization of large datasets. Topsort helps categorize and prioritize data points based on specified criteria, facilitating faster decision-making processes and optimizing workflow efficiency.
PromoteIQ
PromoteIQ is a retail media platform that offers a suite of tools for sponsored product placements and native advertising. PromoteIQ can help retailers monetize their digital shelf space, and give brands targeted marketing opportunities.
Building vs. Buying An Ad Server
Big brands like Amazon, Etsy, and Facebook have created successful in-house ad platforms, leading to many brands exploring the option of building their own ad platform. But such a complex process takes time, money, and lots of bandwidth. Let’s take a look at the benefits each solution brings to the table.
Benefits of building an in-house ad server
- Owned data: Ad servers create a single source of truth, ensuring that no data or key insights are lost to bias or third-party influence.
- In-depth insights: With an ad server, marketers have in-depth insights into their audience, allowing for more informed strategic decisions and the ability to optimize in real-time.
- Scope and customization: Building in-house allows for the flexibility to build what you want.
Benefits of buying a black box ad server
- Fastest time to market: Typically these can be launched in days.
- Instant access to demand: You can easily gain access to advertiser demand partners via black box ad servers.
Benefits of using Kevel to build your own ad server
- Owned data: With Kevel’s APIs, retailers can maintain total control over their data without bias or third-party influence.
- In-depth insights: Kevel’s CDP, Audience, provides in-depth insights that allow for real-time optimization and more informed decision making.
- Faster time to market: Kevel has helped brands launch in as little as 14 days.
- Easy to maintain: Building with Kevel won’t strain your engineering resources, and things like privacy compliance, scale and server costs, and certifications, memberships, and tools are built into Kevel’s APIs.
- Scope and customization: Building with Kevel gives the flexibility to build exactly what you want, at a fraction of the cost.
When to consider Kevel’s ad serving APIs:
- You want to launch an MVP in weeks, not years.
- You want to outsource the complex parts of ad serving, like reporting, tracking, and decisioning, so you can focus on the aspects that make your ad product unique.
- You want to easily add new features rather than spend months building each.
- You can’t or don’t want to pull engineers off of the core product, and you don’t want to hire more.
- You can’t or don’t want to spend resources monitoring server costs and uptime.
- You can’t or don’t want to worry about privacy laws, certifications, and backend tools.
When to think twice:
- You don’t have advertisers. Kevel’s Retail Media Cloud™ provides the tech, not the demand, so you’ll need existing advertiser relationships.
- You want to launch in days without engineering help. Integration with infrastructure software does require some engineer resources, and it’ll likely take a few weeks.
Still on the fence? Check out our Build vs. Buy eBook for free.
How To Begin
If you’re looking for flexibility and efficiency, leveraging Kevel’s ad APIs can help you launch fully-custom, engaging ads in as little as 14 days.
Kevel is the leader in ad infrastructure APIs and has helped eCommerce brands like Klarna, Bed Bath and Beyond, and Cornershop build flexible retail media ad platforms at a fraction of the time and cost of building from scratch.
Let us know how we can help you start today!