At the most basic level, ad networks pool inventory of unsold ads from publishers and sell it to advertisers. They earn money by taking a cut of ad revenue, sometimes marking-up inventory before selling it.
Ads are delivered to a publisher's site by an ad network's ad server via code on the publisher's site that calls the ad. Performance is tracked via a tracking pixel from the ad network that the advertiser places on the conversion page(s) such as a thank you page on its site. The ad network's ad server powers ad targeting, tracking and reporting on the campaign.
Unlike AdSense where advertisers and agencies manage bidding, targeting and optimization themselves, many ad networks manage campaigns on behalf of agencies and advertisers. In these cases, an ad network and buyer negotiate the terms of an ad buy such as audience targets, impressions (the number of times an ad is served) and average cost per impression (CPM). The ad network then executes the targeting, optimization and reporting on the campaign.
What Types Of Targeting Are Available?
Some ad networks categorize the sites in their network by the types of content they cover. Automotive, travel, beauty, fitness sites, for example, may be grouped into vertical channels and sold to advertisers that want to reach audiences interested in those topics. Some networks cater to specific verticals while others are open to nearly any type of site. Or ad networks may instead sell audience segments built on behavioral, interest, demographic and other data from publishers and third-party data providers.
There are also ad networks focused on low-priced inventory that give little to no transparency into where an advertisers’ ads show up. These blind buys can offer scale on the cheap, and are typically bought by direct response advertisers who measure performance by CPA and are less concerned about brand safety.