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What Is Ad Serving?

C. Mitchell
C. Mitchell

Ad serving is the process through which Internet advertisements, be they banner ads, interactive promotions, or simple links, appear on web pages and in web-based e-mail in-boxes. Companies create advertising campaigns, then pay for those ads to be shown, or served, on certain websites. One of the main goals of ad serving is to place ads where targeted consumers and consumers within certain demographic groups are likely to see them. Ad serving is typically powered by a series of search algorithms and personal tracking data.

In most cases, ad servers are computer servers that arrange ad placement based on a number of different factors. Sometimes, ad serving is as simple as putting ads on certain industry-specific websites or on web programming already narrowed to a specific audience. More often than not, however, the placement is based on individual web behavior and search patterns.

Businessman giving a thumbs-up
Businessman giving a thumbs-up

It is no coincidence that a user who visits a website for, say, shoes may begin seeing ads for shoes on a variety of different websites. Similarly, a person who looks at a hotel’s website may later see an ad offering a discount at that very hotel. The goal behind ad serving is to put the most relevant ads in front of the most likely consumers.

Some of this information is gleaned from individual web users’ cookies. Cookies are small data packets that identify where users have been and what they have viewed. Other ads are served more directly, usually through affiliate marketing practices. Websites that are owned by the same company or that have close business relationships often share data. If a person has purchased a certain kind of product from one website in the past, he may see that same product advertised when he visits an affiliate’s site.

Ad serving that involves user tracking is a somewhat controversial practice. In most instances, Internet users are tracked and identified only by their Internet protocol (IP) number, which is a randomly-generated numerical identifier. Names and other personally identifiable information are not usually disclosed. Nevertheless, many argue that this sort of tracking is invasive. As a result of this criticism, many ad servers offer users the chance to opt-out of tracking and personalized ad serving.

Keyword searches are also drivers for ad serving. When users enter terms into a search engine, “sponsored ads” or “sponsored links” usually appear next to search results. Advertisers pay to have their ads appear when users search for certain things in an effort to drive traffic to their sites. This kind of Internet marketing is known as contextual advertising, since it is based on the context of what a user has searched — and, therefore, what he may be more likely to buy.

There are several different ad serving compensation methods. Servers sometimes sell advertising packages on a pay-per-view basis. An advertiser pays for his ad to be shown a certain number of times — say, 1,000 — and pays a fixed fee. Other times, advertisers only pay per click. Under such a “pay per play” scheme, an ad will be served an unlimited number of times, but the advertiser will only pay when users actually follow through and click on the link. Clicking on links from served ads usually brings users directly to the advertiser’s landing page.

The presence of ads and the increasing willingness of consumers to click on them is one of the major enablers of free web content. Owners of newspaper sites, political blogs, and other content-rich websites can often underwrite the cost of maintaining their sites by hosting advertisements and by enabling ad serving technologies to place ads on their pages. This is known as website monetizing.

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