Ad Networks – How Does It Work?

Creating or having a personal website is all about sharing your knowledge, products and services to the world. For corporate websites, online storefront generates a different source of revenue for them – mostly targeting the global market. For private or services websites, there could be other sources of income but the most popular are “Ad Networks”.

An advertising network serve advertising on your website and share advertiser revenue for qualified clicks each time your site visitors clicks on ads. Serve these companies as advertising agents wherein they will have online advertising directory. They will ask companies to advertise online and until it’s defined by the advertiser where exactly they want their ads to be placed, advertising agents will be the ones to help advertisers place their ads online – websites that are most applicable to the advertiser’s campaign.

Online advertising directory can be found on websites, on blogs, in RSS feeds, in adware, in e-mails, in instant messaging applications and on various other sources. Online advertising is no more constraint to banner ads, it now includes: text links, rich media and e-mails.

There are two types of advertising networks– first-tier and second-tier networks.

First-tier advertising networks have many own advertisers and publishers, they have high quality traffic, and they serve ads and traffic to second-tier networks. Examples of first-tier ad networks include the major search engines like Google and Yahoo.

Second-tier advertising networks may or may not have some of their own advertisers and publishers, but their main source of revenue is generated from conglomerating ads from other advertising networks.

Ad Networks acts as a bridge between both the advertisers and the publishers. The advertisers will be the one to pay for their online campaigns, while publishers can join ad networks so that the ads can be displayed on their website and payments can be done based on either CPM or CPC.

CPM advertising is the ad that pays per impression. For example, if the campaign states rupees 100 CPM, you would be making rupees 100 per thousand impressions, or 10 paise per ad viewed. CPC stands for cost per click, and payment is based on the number of clicks gained from your site. Simply put, in CPM campaigns – publishers will be paid once the ads are displayed. On the other hand, in CPC campaigns – publishers will be paid based on the number of ad clicks it generates.

For the publishers, they are most concerned about the ad rates of course – how much revenue will they get out of the ads that were placed on their ads, and will they be paid on time or not? Some ad networks will accumulate the publisher’s ad revenue till it reaches 50,000 to 1,00,000 before a payment is done by the ad networks to publishers.

Every publisher applications are not approved, it is therefore a challenge to website owners to come up with websites that suits a certain standard in terms of content and design is concern. When your application is approved, you will be given an administration page wherein you will be able to check your website’s ad performance, select which ad campaign will you allow to be displayed on your site, payment history and others.

For advertisers, the primary concern is for their online campaign to be delivered correctly and to the right audience, their brands be protected online and the bottom line is of course – for the online campaign to generate business for them in the reality. Some of the things advertisers should check for in selecting ad network partners are: advertising rates, ad types and formats, percentage of default ads, targeted advertisements capability, and flexibility of contract.

Advertisers should also look for ad network partners that are capable in providing comparable and complementary audience composition, reach and frequency, with stringent quality controls and the ability to explain measurable profits in key brand metrics. The motto is to be able to consolidate the impact in the efficiency of your overall online brand marketing objectives.

The whole online advertising world is a win-win situation for every player. All of them have their own role, and everyone should be innovative enough to maximize their online motives.