Ads-ecosystem: A must-know by Advertisers and Publishers

By | November 2, 2022

Overview

In the digital advertisement, Ad-ecosystems are groups of various components that co-exist within the content environment and work synergistically, for successful advertisement campaigns.

Both publishers and Advertisers must understand the ecosystem of digital advertisement. This will, in turn, help the two players, to develop an agreeable mode of operation, when conducting an online Ad-campaign, as well as knowing where the campaign may be vulnerable to fraud.

In digital advertising, advertisers need Publishers with the content that visitors/users are looking for. In other words, content is the main element of any website or other media channels. Thus, publishers, who are content creators, may create content in such diverse forms as texts, images, audio [podcast], and video.

From the marketer’s/advertiser’s perspective, this type of content can be seen as a sort of environment where ads are placed. Other types of similar environments can be social media such as Facebook, Twitter, Instagram, and several other platforms, where user-generated content is the cornerstone.

So, the Ad-ecosystem will have the advertisers, and the Publishers that closely interact with the users/visitors, interacting with each other through the Ad platform.

What are the key players in the Ad ecosystem?

I have already pointed out that content, which is the environment where the ads are placed, forms one of the critical elements in the ecosystem, which advertisers look for before deciding where to place an advert.

Other key players working within this environment include publishers/affiliates, advertisers/marketers, and users/visitors. The interactions between these players are facilitated by an intermediate infrastructure—the so-called ad platform.

If you want to understand how these key players interact within the Ad ecosystem, continue reading.

Publishers/affiliates:

These are the sellers or providers of ad system inventory [ad inventory or the amount of ad space in a publisher web page], in the content environment. Indeed, publishers/affiliates are the ones that create and sometimes manage, the actual online content in a set of web pages, onto which Ads will be placed.

In the Ad ecosystem, publishers are paid to place the advertisers’ content in front of online audiences, when they integrate the advertisers’ content into their web pages. In other words, the Publishers’ web pages are the users’ entry points into the ad ecosystem.

Advertisers/merchants:

These are persons or companies that want to promote products or brands, or services by displaying related ads on third-party (i.e., publishers’) websites.

Note that advertisers generally aim to place their ads on popular high-traffic sites, which means that publishers should aim at creating a highly conducive environment (content that is very attractive to the visitors/users/audiences) such as to attract advertisers to buy space for their advertisement campaigns.

Users/visitors/audiences:

This entity of the Ad ecosystem is very important as every action is focused on them. As such, they are the power engine of the ad ecosystem. Typically, they are the ones that request the pages containing ads the advertisers placed on the publisher’s pages. And as you can guess, that is what advertisers are looking for, to convert as many as possible into customers.

On the publisher/affiliate’s side, the user’s/visitor’s actual views of ads (impressions or clicks) are what the advertisers pay the publishers for. Besides, the data obtained by monitoring users’ actions on a publisher’s website can be used to determine the specific location of various advertisements on the pages of the publisher/affiliate’s site.

Ad Platform:

This is a framework comprising several other entities that connect advertisers to publishers. These entities facilitate the matching of the demand with the supply end of the ad ecosystem. Typically, while on one side the ad platforms assist publishers in finding the best match between their audiences and the advertisements they are supposed to showcase; on the other side, they help advertisers reach the most appropriate potential audience and customize the advertising material to them.

Entities comprising the Ad platform and their interplay:

The various entities comprising the Ad platforms include the following: Ad network, Ad Exchange (AX), Supply Side Platforms (SSPs), Demand Side Platforms (DSPs), and Data Exchange. Each of these entities plays a unique role and has a specific operational mechanism. However, when all the entities work in synergy, they make the ad platform processes more effective, flexible, and transparent. The interplay of the various entities comprising the Ad Platform is illustrated in the Figure below and described in detail thereafter.


Ad networks:

These are beneficial to both advertisers and publishers, who happen to be the major pillars of an Ad ecosystem.

For advertisers, ad networks help in the management and optimization of their campaigns, thus significantly reducing the time and effort needed to find and verify placements.

On the publishers’ side, Ad networks collect and categorize ad placements based on niche, audiences, context, or other criteria, thereby helping publishers to effectively monetize their digital assets.

Typically, ad networks collect inventory from a range of publisher sites, segment it (e.g., based on geolocation, age, gender, interest, and behavior of potential customers/users), and sell it to advertisers in advance and ‘bulk’. In other words, Ad networks work with publishers to more efficiently sell ad impressions that they have not sold directly to advertisers.

Examples of large ad networks include Google AdSense, Media.Net, BuySellAds, and Conversant.

Ad exchanges:

An ed exchange can be considered an open marketplace that auctions publishers’ ad impressions in real-time among multiple bidding advertisers and sells them to the highest bidder. In other words, publishers [supply side] offer inventory (Ad spaces) in bulk, to Advertisers [demand side]. The advertisers (demand side) then purchase this inventory based on the type of deal chosen by the parties. Deals can be direct or based on auction, open, or private. The four most common types of programmatic deals include:

  • Open exchange (based on open auction);
  • Private Marketplace PMP (based on private auction);
  • Programmatic Guaranteed (direct); and
  • Preferred deals

It is important to note that ad exchange is an independent entity and serves both supply and demand sides. The emergence of ad exchanges also introduced digital media auctions, such as real-time bidding. The whole process may take a millisecond.

Working with Ad exchanges, other than ad networks, may offer advertisers the following benefits:

  • Ad exchanges give advertisers better control, targeting capabilities, and monetary transparency, as they allow advertisers to serve their ads to the right viewer, at the right time, and through the right publisher.
  • Ad exchanges enable advertisers to keep track of where their ads are served, and which ad spaces are most cost-effective.

Nevertheless, ad exchanges may also pose a serious drawback to the advertisers; namely, many Ad exchanges struggle with the problem of low-quality inventory, as good-quality ad spaces are often already purchased by big Ad networks.

Examples of large Ad exchanges include;

Supply Side Platforms (SSPs):

These serve publishers by, first of all, managing their inventories (i.e., available ad space) and selling them (inventories) in multiple ad networks and exchanges. In managing the publishers’ inventories, the SSPs use what is called “strategy optimization”, to increase the publisher’s profit by subsequently increasing the advertisers’ demand for its ad inventory.

In other words, these platforms provide publishers with all the necessary settings regarding selling, management, and optimization of their advertising spaces.

Additionally, to this primary goal of protecting and enhancing publishers’ yields, SSP platforms also help publishers to fight ad fraud and ensure brand safety.

Examples of real-world SSPs are:

Demand Side Platforms (DSPs):

These serve as advertisers’ agents (i.e., representatives) in multiple ad networks and exchanges, and they are responsible for selecting the right audiences and the most appropriate media to represent the advertisers’ ads. Typically, this software finds suitable impressions based on the campaign parameters that advertisers choose, and then automatically buys it at the best possible price.

In essence, the DSP provides marketers with access to countless inventory sources within a single interface and automates purchases, thereby making media buying much cheaper and more effective.

Examples of real-world DSPs are:

Data Exchange or Data Management Platform (DMP):

This is a third-party data aggregator that publishers and advertisers interact with to obtain additional user-related information, thus leading to better advertising. Generally, DMPs collect users’ data to profile them according to their interests.

Consequently, DMPs can facilitate a publisher or an SSP to find the best match for their ad inventory (based on their audience’s interests) among many advertiser DSPs.

Operationally, DMPs can collect and analyze campaigns’ performance characteristics, such as clicks, downloads, sign-ups, contact us forms, and all the other sorts of interaction with ads, and establishes any correlations between these actions and the brands’ ads strategy.

Once any correlations are established, they are sent back to the advertisers’ platform to make the necessary targeting improvements, for the most successful Ad campaigns.

This process may be reiterated as many times as necessary to achieve the best results and reach the company’s business goals.

It should be noted that to generate accurate user profiles, DMPs harvest vast amounts of data from the Internet and deploy advanced data mining tools. Some of the available data mining tools include;

Is it Possible to Create an in-house ad ecosystem?

As already shown, digital advertising is not only affordable but is also an absolute necessity for any online business to thrive. Besides, technology platforms to ensure that the process progress smoothly and with minimal risks, has been developed by several companies and even the remaining hurdles will be addressed in the not-so-far future!

So, it is now, than ever before possible to conduct secure advertisements through the services of a third-party service provider, especially to assess the Ad ecosystem and to prevent any possible fraudulent activities. But one question that businesses may ask: “Is it possible to create an in-house ad ecosystem?” If it is possible, how can it be implemented?

Indeed, it is now possible to create your own programmatic advertising ecosystem and avoid the numerous third-party entities. This can be implemented with the help of white-label models/ advertising solutions that can be customized to your business’s needs.

In other words, one can benefit from having their own platforms like DSP, SSP, DMP, and even ad exchange with the help of white label models.

Moreover, with white label advertising solutions, one can leverage on customization of their branded environments to meet their client’s specific business needs without spending months on building and developing platforms from scratch.

Finally, having acquired the pre-designed white-label solutions, you should focus on your business goals because the technical sides, operation, and maintenance are already taken care of. This cannot be reassuring but it also saves, in the long run.

Conclusion

I have provided a brief account of the Ad ecosystem and explained why it is important for both Advertisers/merchants and Publishers/Affiliates need to understand.

While the Publishers/Affiliates/Influencers etc provide the environment in the Ad ecosystem, which is the content, the Publishers/Merchants/Companies provide Adverts for display within the content environment.

I have shown also that in the Ad ecosystem market place, each of the two players i.e., the publisher/affiliate [who offer the ad inventory/ad space] and the Advertisers/Merchants/Companies [who look for the ad inventory/ad spaces] require agents in the ad ecosystem market place. These agents are the SSPs (on the publishers’ side) and DSP [on the Advertisers’ side], respectively. Other players in the ecosystem facilitates the transactions between these two main players.

I have pointed out that although these services can be out-sourced from a third-party service provider, yet it is possible for the Advertisers/Merchants to an in-house ad ecosystem. This is now very possible as you are not starting from scratch, but rather leveraging the already designed white label solutions.

Finally, what you should not forget, is the fact that, understanding the ad ecosystem well with help in laying a good fraud shield, with a clear ad fraud detection and prevention strategy.

If you have any comments or questions, please leave them in the
comment/question box below and I will make sure you get answered
(probably within 1 hour). Thank you.

Cheers

Joseph Hawumba

Category: Uncategorized

8 thoughts on “Ads-ecosystem: A must-know by Advertisers and Publishers

  1. Alice

    I’ve been doing affiliate marketing for a little over 3 years. Thus, I understand how advertisers and publishers work hand-in-hand; advertisers place their ads in the publisher’s space and pay them accordingly. But this is my first time hearing the term “Ads-Ecosystem.” Thank you for explaining how the 2 entities comprise the Ad space.

    I do have a question regarding Ad Exchanges. I’ve received several proposals on Ad Exchange but declined most of them because they are not related to my niche. If it was you, would you accept ads on your site that are entirely of another niche? 

    I am hoping you could address my queries. 

    Reply
    1. admin Post author

      Alice, thank you for your comment. You raise a very good question. First of all, as I explain, your content is your ad environment, meaning that it should somehow support the Ad space it provides to the Advertisers. In this sense, advertisements that are far from your niche may not do well on your site. Answering you directly on whether I would accept ads that are entirely of another niche, my answer is no. However, you are to accept any, let it be from a trusted company/advertiser/merchant. Let me hope I have helped you.

      Reply
  2. Jerry McCoy

    Learning about the different types of ads that are available is almost an art form today. There are so many ways to sell or display ads on a website that a person must look carefully to determine if the ad will be best served by the content the publisher creates. A person should try to display ads that are relevant to the service provided.

    Jerry

    Reply
    1. admin Post author

      Sure, Jerry, you are spot on the point. The environment (content) where one places the ad is crucial. Ad we ought to be careful where we place ads. Thank you once again.

      Reply
  3. Parameter

    I love this deep insight into the key relationship between publishers and advertisers. I have been into affiliate marketing for more than two years and what I have discovered is the power of creating content. As you rightly said, publishers whose content will be sort after must create unique and relevant content that their website visitors will spend time reading

    Reply
    1. admin Post author

      Hi, Parameter, what you have gathered within the two years concerning creating powerful content is very good. Your content is what attracts visitors and indeed advertisers. Thank you for the comment, once again.

      Reply
  4. angelce903

    Finally an article on how online ads work! It can be complicated for online publishers like myself to know how to monetize your content, and how ads can help you in this. But having all the actors and stakeholders makes it clear for me, and I’ll know from now on what kind of advertisers I want to work with. Thanks for this very informative piece of information.

    Reply
    1. admin Post author

      Thank you so much for your appreciation. Knowing the players and their interaction is very vital, especially you the advertiser.

      Reply

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