What is an ad server?

Ad servers are technology used by publishers and advertisers to distribute advertisements on digital channels, such as websites and mobile applications. Ad servers use a variety of variables, such as audience demographics and ad budgets, to determine what ads to display to each user. The ad server uses data about the ad’s performance, including clicks and impressions, to measure the success and progress of different campaigns.

How does an ad server work?

When an internet user visits a website, watches a video, or engages in any other online activity, a request is sent to the publisher’s web server to load the content. If the web page contains an ad space, the publisher’s server will connect to an ad server and request ad content. The ad server then uses that information to choose the best ad for that specific user. Occasionally, the ad will be stored on the publisher’s ad server, but typically the ad will be stored on a third-party server.

History of ad servers

In 1994, the very first banner ad appeared online. Advertisers immediately rushed to adapt to this new medium. The need to manage an increasing demand for ad space led to the creation of the first ad server in 1995. Initially, ad servers could gather limited information about web users. Technical data such as the web browser, language, and operating system were the extent of what ad servers had access to for delivering ads to the right audience. However, the goal of ad servers, even from the beginning, was to serve the right ads to the right people. This would help both advertisers and publishers make money. The need for optimization has led to many advancements in ad servers and other technologies in order to more effectively place relevant online ads.

First-party ad servers vs. third-party ad servers

First-party ad server

First-party ad servers are owned by publishers in order to manage and display, or serve, the ad spaces on their websites. First-party ad servers display ads that the publisher has sold directly to advertisers, which is called a direct campaign. They can also choose and serve ads from outside sources including third-party ad servers and ad networks. A first-party ad server makes these decisions based on a variety of parameters and tracks the results. 

Popular features include:

  • Ad Zone Configuration – This allows publishers to set specific rules for how ad slots on their web page work.
  • Contextual – Publishers can use contextual to manage ad inventory to match the audience of the web page it appears on.
  • Analytics – Analytics allow publishers to collect details about an ad’s performance to share with advertisers.
  • OpenRTB and Prebid.js – OpenRTB and Prebid.js are two features that help publishers automatically manage bidding from many advertising sources.

Third-party ad server

Third-party ad servers are used by advertisers to manage their content and communicate with first-party ad servers. Third-party ad servers also gather their own campaign data and ad metrics from all of their sources. This is helpful when advertisers place their ad with many publishers but still want accurate metrics. Third-party ad servers give advertisers a higher degree of control allowing them to improve their campaign by doing A/B testing to see what creative features will be most successful.

Popular Features

  • Frequency Capping – Frequency capping gives advertisers control over how often an ad is shown to the same users.
  • Campaign Optimizations – Third-party ad servers can automatically make changes to ad creatives to improve conversions and clicks.
  • Dynamic Creatives – Third-party ad servers allow advertisers to change out different parts of an ad based on information about the current user.
  • Analytics – Advertisers can use analytics to understand how their campaign is performing and how effectively their budget is being spent.

Top Ad Servers

Google Ad Manager (GAM) – Google Ad Manager is a widely recognized and used ad server that integrates easily with the rest of Google’s ad products. The Google ad server is low-risk due to its size and the reliability of Google. It is relatively inexpensive, providing free service under 90 million monthly impressions. However, it lacks the customization of other ad servers and offers less flexibility in ad options.

Kevel – Kevel is a service that allows advertisers to create a fully custom ad server. The benefits of using Kevel are increased flexibility in finding audiences, faster load times, and the ability to use native ads. However, using Kevel takes longer to set up than other options and does not provide programmatic demand.

AdButler – AdButler is a long standing and highly rated ad server. They support many important ad server features and offer advertisers more customization than other solutions.
Smart Ad Server – Smart Ad Server provides ad server services that integrate directly with many other features and functions including an SSP and DSPs. They offer quick setup and focus on programmatic demand. However, like similar solutions, smart ad servers lack customization and flexibility in their services. They also take a higher ad revenue cut than a standalone server.