An advertising network (also called an online advertising network or ad network) is a collection of (often unrelated) online advertising inventory.

Online advertising inventory comes in many different forms. This inventory can be found on websites, in instant messaging applications, in adware, in e-mails, and on other sources. Some examples of advertising inventory include: banner ads, rich media, text links, and e-mails. (This is not an exhaustive list.)

Large publishers often sell only their remnant inventory through ad networks. While not commonly known, even among many large publishers remnant inventory can exceed 50% of total inventory, although this is not always the case. Typical numbers range from 10% to 60% of total inventory being remnant and sold through advertising networks.

Smaller publishers often sell all of their inventory through ad networks. One type of ad network, know as the blind network, is such that advertisers place ads, but do not know the exact places where their ads are being placed.

In most cases, ad networks deliver their content through the use of a central ad server.

Large ad networks include a mixture of search engines, media companies, and technology vendors.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Contextual advertising is the term applied to advertisements appearing on websites which ads are served by automated systems based on the content of the page.

Google AdSense was the first major contextual advertising program. It worked by providing webmasters with JavaScript code that, when inserted into web pages, called up relevant advertisements from the Google inventory of advertisers. The relevance was calculated by a separate Google bot that indexed the content of the page.

Since the advent of AdSense, the Yahoo Publisher Network, MSN adCenter and others have been gearing up to make similar offering.

Contextual advertising has made a major impact on earnings of many websites. As the ads are more targeted they are more likely to get clicked, thus generating revenue for the owner of the website (and the server of the advertisement). A large part of Google’s earnings are from their share of the contextual ads served on the millions of webpages running the Adsense program.

Links

• MSN Ad Center news article
• Contextual Advertising Sandbox Compare Ads served by Google Adsense, Chitika and Yahoo Publisher Network

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AdWords is Google’s branded text-based pay-per-click (PPC) advertising service.

Google’s advertisements are short, consisting of one title line and two content text lines. Advertisers specify the words that should trigger their ads and the maximum amount they are willing to pay per click. When a user searches Google’s search engine on www.google.com, ads for relevant words are shown as “sponsored link” on the right side of the screen, and sometimes above the main search results. The ordering of the paid listings depends on other advertisers’ bids (thus the system is classified as P4P) and the historical click-through rates of all ads shown for a given search.

All AdWords ads are eligible to be shown on www.google.com. Advertisers also have the option of enabling their ads to show on Google’s partner networks. The “search network” includes AOL search, Ask.com, and Netscape. Like www.google.com, these search engines show AdWords ads in response to user searches.

The “content network” shows AdWords ads on sites that are not search engines. Google automatically determines the subject of the pages and displays ads for which the advertiser has specified an interest in that subject. The ads show in boxes resembling banner ads, with the designation “Ads By Gooooooooooogle.” These content network sites are those that use AdSense, the other side of the Google advertising model.

AdWords is used by publishers who wish to bring traffic to their websites. The biggest competitors are Yahoo! Search Marketing (formerly Overture) and MSN’s soon-to-be-launched adCenter.

Most of Google’s revenue comes from AdWords.

Legal context

The service has generated lawsuits in the area of trademark law and click fraud. [1]

Interacting with Adwords

The ads are displayed on the right hand side of the natural search results. The ads are pure text, and thus difficult to block. However, on external sites, they are hosted within an IFRAME (an HTML element), making them easy to remove with advertisement blockers.

Technology

The AdWords system was initially implemented on top of the MySQL database engine. After the system had been launched, management decided to use a commercial database (Oracle) instead. As is typical of applications simultaneously written and tuned for one database, and ported to another, the system became much slower, so eventually it was returned to MySQL ([2])

Links

• Official Website
• Program Details and FAQ
• Adwords Lawsuits
• Google AdWords API
• Google Advertising Professionals aka GAP’s
• WhoisaGAP Helps you find out who is a Google Advertising Professional

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

A central ad server is a computer server that stores advertisements and delivers them to web site visitors. These servers centrally store the ads so that advertisers and publishers can track from one source the distribution of their online advertisements, and have one location for controlling the rotation and distribution of their advertisements across the web.

The central ad server was first developed and introduced by FocaLink Media Services in 1995 for controlling online advertising or banner ads. The company was founded by Dave Zinman and Jason Strober, and based in Palo Alto, CA. In 1998, the company changed its name to AdKnowledge, and was eventually purchased by CMGI in 1999.

Ad Server Functionality

The typical common functionality of ad servers includes:

• Uploading creative, including display advertisements and rich media
• Trafficking ads according to differing business rules
• Targeting ads to different users, or content
• Optimizing creative based on results
• Reporting impressions, clicks, post-click activities, and interaction metrics

Advanced functionality may include:

• Frequency capping creative so users only see messages a limited amount of time
• Sequencing creative so users see messages in a specific order (sometimes known as surround sessions
• Excluding competitive creative so users do not see competitors’ ads directly next to one another
• Displaying creatives so an advertiser can own 100% of the inventory on a page (sometimes known as roadblocks
• Targeting creatives to users based on their previous behavior (Behavioral marketing)

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Ad serving describes the technology and service that places advertisements on web sites. Ad serving technology companies provide software to web sites and advertisers to serve ads, count them, choose the ads that will make the web site or advertiser most money, and monitor progress of different advertising campaigns.

Two types of internet companies use ad serving: web sites and advertisers. The main purpose of using an ad server is different for both of them:

For a web site, the ad server needs to look through all the ads available to serve to a user who is on a page, and choose the one that will make the web site the most money, but still conform to the rules that the advertiser and web site have agreed. For example if a web site has 10 different advertisers that have paid for a big square ad, the ad server must decide which one to serve (or display). One advertiser may have only agreed to pay for ads from 9am – 5pm. If it is after 5pm, then the Ad Server must not serve that one. Another advertiser may only have paid to show one ad to each user per day. The ad server must therefore see if a user has seen that ad before, on that day and not serve it again if the user has seen it. Another advertiser may have agreed a high price, but only if the person watching the page is in the United States. In that case, the Ad Server needs to check the IP address to determine if the user is in the US and then decide which is the highest paying ad for that user, in the US, at that time, given what that user has seen in the past.

For an advertiser the ad server needs to try to serve the ad that is most likely to result in a sale of the product advertised. For example if a user is viewing a page, the advertiser’s ad server needs to decide from previous history, what ad that user is most likely to click on and then buy the product advertised. If the user is on a technology page, then the ad server may know that on technology types of pages, the ad that works best is a blue one with mostly text and pricing and numbers, not the green ad with a picture of a model and little text. The ad server will therefore serve this ad, to try and get the highest probability of a sale from the ad.

Ad Serving is most complex when it is used by an Advertising Network. An advertising network buys ads from many web sites and therefore acts like an advertiser user of Ad Serving. When the network buys ads, it tries to place ads on sites where they work best. However an ad network then sells its aggregated ad inventory to advertisers. When doing this, it uses its Ad Serving software as a web site does. In this case it tries to make the most money by only running the ads from advertisers that pay most.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Cost Per Impression is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners, text links, e-mail spam, and opt-in e-mail advertising. (Although opt-in e-mail advertising is more commonly charged on a CPA basis.)

The Cost Per Impression is often measured using the CPM (Cost Per Mille) metric. (A CPM is the cost of one thousand (1,000) impressions.)

CPM is considered the optimal form of selling online advertising from the publisher’s point of view. A publisher gets paid for each ad that is shown.

This type of advertising arrangement closely resembles Television and Print Advertising Methods for speculating the cost of an Advertisement. With Television the Nielsen Ratings are used and Print is based on how many readers a publication has. For a Website the numbers are a bit more exact due to the TCP/IP nature of the Internet.

CPM and/or Flat rate advertising deals are preferred by the Publisher/Webmaster because they will get paid regardless of any action taken.

For Advertisers a Performance Based system is preferred. There are two methods for Paying for Performance: 1) CPA – Cost per Action/Acquisition and 2) CPC – Cost per Click Through.

Today, it is very common for large publishers to charge for most of their advertising inventory on a CPM or CPT basis.

A related term, eCPM or effective Cost Per Mille, is used to measure the effectiveness of advertising inventory sold (by the publisher) via a CPC, CPA, or CPT basis.

Cost Per Mille

The initialization CPM comes from print world (and is a latin word), and stands for Cost Per Mille in the US or, more correctly, in the UK Cost Per M, with M representing the Roman numeral for thousand. When online advertising started gaining momentum, those in the industry used this term (rather than something like CPI) as a metric for describing the Cost Per Impression largely because advertisers were already familiar with the term CPM.

It is important to remember that when someone says something like, “our CPM is $5″. That this means that the Cost Per Impressions is $0.005 — half a cent.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Litigation

Disputes over the issue have resulted in a number of lawsuits. In one case, Google (acting as both an advertiser and advertising network) won a lawsuit against a Texas company called Auction Experts (acting as a publisher), which Google accused of paying people to click on ads that appeared on Auction Experts’ site, costing advertisers $50,000[1]. Despite networks’ efforts to stop it, publishers are suspicious of the motives of the advertising networks, because the advertising network receives money for each click, even if it is fraudulent.

Solutions

Proving click fraud can be very difficult, since it is hard to know who is behind a computer and what their intentions are. Often, the best an advertising network can do is to identify which clicks are most likely fraudulent, and not charge the account of the advertiser. Ever more sophisticated means of detection are used, but none are foolproof.

The pay-per-click industry is lobbying for tighter laws on the issue. Many hope to have laws that will cover those not bound by contracts.

A number of companies are developing viable solutions for click fraud identification and are developing intermediary relationships with advertising networks. Such solutions fall into two categories:

a) Forensic analysis of advertisers’ web server log files

This analysis of the advertiser’s web server data requires an in-depth look at the source and behavior of the traffic. As industry standard log files are used for the analysis, the data is verifiable by advertising networks.

b) Third-party corroboration

Third parties offer web-based solutions that might involve placement of single-pixel images or Javascript on the advertiser’s web pages and suitable tagging of the ads. The visitor may be presented with a cookie. Visitor information is then collected in a third-party data store and made available for download. The better offerings make it easy to highlight suspicious clicks and they show the reasons for such a conclusion. Since an advertiser’s log files can be tampered with, their accompaniment with corroborating data from a third party forms a more convincing body of evidence to present to the advertising network.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Click fraud can be as simple as one person starting a small web site, becoming a publisher of ads, and clicking on those ads to generate revenue. Oftentimes, the number of clicks, and their value, is so small, that the fraud goes undetected. Oftentimes publishers will claim small amounts of such clicking is an accident, which is often the case.

Much larger scale fraud also occurs. Those engaged in large scale fraud will often run scripts, which simulate a human clicking on ads in web pages. However, huge numbers of clicks appearing to come from just one, or a small number, of computers, or single geographic area, look highly suspicious to the advertising network and advertisers. Clicks coming from a computer known to be that of a publisher, also look suspicious to those watching for click fraud. A person attempting large scale fraud, alone in their home, stands a good chance of being caught.

Organized crime can handle this by having many computers, with their own internet connection, in different geographic locations. Often scripts fail to mimic true human behavior, so organized crime networks use Trojan code to turn the average person’s machines into zombie computers and using sporadic redirects or DNS-cache-poisoning to turn the oblivious user’s actions into actions generating revenue for the scammer.

Impression fraud is an insidious variant of click fraud where the advertiser is penalized for having an unacceptably low click-through rate for a given keyword. This involves making numerous searches for a keyword but without clicking of the ad. Such keywords are disabled automatically, enabling a competitor’s lower-bid ad for the same keyword to continue while several high bidders (on the first page of the search results) have been eliminated.

It is very difficult for advertisers, advertising networks, and authorities to pursue cases against networks of people spread around multiple countries.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Anti-spyware programs often report Web advertisers’ HTTP cookies as spyware. Web sites (including advertisers) set cookies — small pieces of data rather than software—to track Web-browsing activity: for instance to maintain a “shopping cart” for an online store or to maintain consistent user settings on a search engine.

Only the Web site that sets a cookie can access it. In the case of cookies associated with advertisements, the user generally does not intend to visit the Web site which sets the cookies, but gets redirected to a cookie-setting third-party site referenced by a banner ad image. Some Web browsers and privacy tools offer to reject cookies from sites other than the one that the user requested.

Advertisers use cookies to track people’s browsing among various sites carrying ads from the same firm and thus to build up a marketing profile of the person or family using the computer. For this reason many users object to such cookies, and anti-spyware programs offer to remove them.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.