What Are Ad Networks? Types, Benefits, and Challenges

Ad networks allow marketers to get their brand in front of the right audience.

They bridge the gap between advertisers and publishers (websites or apps) to make sure your ads appear in the right places. You don’t need significant heavy lifting to find out where your audience hangs out online; ad networks let you reach them. 

Modern ad network platforms help increase brand awareness and optimize ad performance for a better return on investment (ROI). If you’re a publisher, they can help you open a new revenue stream. 

Let’s dig deep into different types of ad networks, how they work, and how they’re different from ad exchanges.  

Ad networks connect supply to demand in the paid advertising ecosystem. The supply-side platforms (SSP) aggregate inventory of apps from publishers or app developers, while demand-side platforms (DSP) represent advertisers seeking to promote ads in different digital spaces. Advertisers bid on these spaces to achieve their goals of acquisition, reach, or any other performance indicator. 

An ad network primarily aims to collect unsold, non-premium, or remnant inventory from multiple publishers, keeping it cost-effective for advertisers. Some ad networks might also curate prime ad placements by buying inventory at discounted rates and reselling it to advertisers at a higher price. 

The difference: ad networks vs. ad exchanges 

There’s a lot of confusion about an ad network and and exchange. Some people use the words interchangeably. 

An ad network is a place where an advertiser can buy inventory from multiple suppliers. Think MTV's website or the Wall Street Journal. Suppliers are suppliers because they supply the space where advertisers can show ads. 

Ad networks primarily aggregate inventory (a bunch of different websites) that they give to advertisers. On the other hand, an ad exchange allows advertisers to go directly to different websites (i.e., suppliers) to buy spaces in an online ad marketplace. 

Where ad exchanges offer transparency in pay-per-ad impressions, ad networks charge a markup for impressions without disclosing the exact amount of these markups. 

Source: War Room

Let’s make the distinction clearer with examples.

Ad networks vs. ad exchanges: Picture this in action 

Google Ads is a good example of an ad network. When you create a campaign through Google Ads, you’re using its demand-side platform to buy inventory from a select number of websites that are a part of Google Adwords’ display network. The inventory here is being transacted through a Google supply-side platform, Adsense. 

When you’re buying from an ad network, there are some limitations in terms of scalability. This is when you want to go beyond the two million websites that Google has partnered with. 

Ad exchanges help you go beyond it. DoubleClick is a good example of an ad exchange. You can directly go into DoubleClick and buy spaces on different websites as an advertiser. 

When to choose: ad network or ad exchange? 

If you’re new to online marketing and don’t need a lot of scalability, it’s best to go with an ad network platform. Sure, you’ll be paying a markup, but either way, you’ll pay for the technology platform in an ad exchange. When buying inventory online, you’ll typically pay the technology partner close to 12% of your advertising spend.

If you’re starting in digital advertising, it’s best to start with ad networks. However, for advertisers scaling with digital investments in millions, an ad exchange may be a better choice. 

Types of ad networks

Different types of ad networks serve different purposes for your site. Here are a few notable ones popular in digital advertising: 

• Premium ad networks offer inventory from popular publishers and create the demand needed to build competition for high-quality ads and their placement. They have higher standards for inventory, which can result in stronger engagement and conversion metrics. You'll often find that the more familiar names, such as Google, Yahoo, Gemini, and the Google Display Network, fall under this title.
• Vertical ad networks are dedicated to delivering advertising to a specific audience. They are topic-specific and represent publishers within a specific niche. Their volume is usually lower, but the quality of traffic tends to be higher due to the precise targeting of a particular audience.
• Affiliate ad networks connect publishers like influencers and blog owners with companies seeking to promote their products and services. These networks often use revenue share, cost per acquisition (CPA), and cost per click (CPC) pricing models.
• Format-specific ad networks specialize in specific ad types, such as video, native advertising, or in-app ads. This category includes video networks like Nexxen with dynamic out-stream video formats and Google’s AdMob with an in-app advertising network. 

Let’s explore how ad networks work. 

How do ad networks work?

Most ad networks follow the same process, but it may vary slightly from network to network. It starts with publishers who are selling their ad space. When they sign up with an ad network, they’re added to the network’s inventory. 

Based on an advertiser’s preference for budget, targeting options, ad format and frequency, pricing model, and other factors, the ad network matches publishers that complement these preferences. 

Advertisers can also choose different ad network types, such as premium, vertical, or format-specific ad networks. After the advertisers agree on a deal with the ad network, they set up ad campaigns on a publisher’s website. 

Ad networks often have the flexibility to rotate different creatives in ad space to allow more variety, which can better engage the same audience if they see the same ad more than once. 

Here’s an example of The New York Times renting out their ad space: 

Source: The New York Times (NYT)

Pricing models in ad networks

When signing an agreement, consider the ad network's pricing model. Publishers' models vary in pricing. 

Choose the pricing model cautiously, as it will directly impact your budgets and how you see added performance. Depending on how you have set the campaign, ad networks will optimize bid prices, targeting, placement, and other characteristics. 

Ad network technology makes use of different methods to serve relevant ads, including: 

• Contextual targeting: Analyzes a website where the ad will appear to show relevant advertisements. Targeting based on just “keywords” might create ambiguous placements when the keywords’ intent differs from the web page. 

• Creative optimizations: Studies a creative’s performance in a given ad space and explores more optimum creatives for the space with experiments.
• Behavioral targeting: Uses a user’s behavior to show them relevant ads during their visits. For example, if you were visiting the pet care section of a media site, you’d automatically get ads related to pet care products. 

This is how an ad network shows relevant ads to the target audience, helping brands promote their campaigns. Let’s look at what benefits it delivers!

Benefits of ad networks

Ad networks benefit advertisers in various ways by: 

• Spareing advertisers from doing tedious searches. Ad networks aggregate publishers in their inventory, making it easy for you to locate outlets to display ads. If you’re manually searching for third-party websites, it might take up a significant amount of time and effort.
• Pairing advertisers with the right publishers. Based on the preferences of your ad campaigns, an ad network can help you to target relevant websites. It automatically determines the best-fit publishers for you.
• Offering access to premium outlets. Although many ad networks focus on remnant or non-premium inventory, some focus on aggregating top-tier publishers for high-quality ad placements.
• Increasing ROI. Ad networks make use of precise matching, enabling advertisers to select profitable deals for them and boosting ROI. 

On the supply side, ad networks allow publishers to generate income fast by enrolling in one or more networks. It maximizes publishers’ reach and opens them to more advertisers for more impressions and clicks, which increases your potential to earn more. 

However enticing the benefits may be, it’s best to consider the cons as well when choosing the correct path for your business.

Challenges in working with ad networks 

Here are some issues that advertisers deal with while renting placements through ad networks: 

• Ads positioning:  Ad networks may not disclose the impressions they received on each publisher’s website. Since you don’t have clarity on how your ad performs on those sites, it can be tricky to understand whether the network’s inventory is helping you achieve your goals. 

• Malicious advertisements: Some ad networks skip a thorough review process for ads that are shown to people. Due to this, malicious advertisers use an ad network strength to distribute malware. While this issue is largely addressed in most networks, it still remains in some. 

• Transparency in offerings: Some ad networks advertise that they aggregate premium publishers. However, they might only have a minute share of premium publishers in their inventory, where they invest the smallest budgets to run the campaigns. 

• Ad relevance: Often, ads are irrelevant to the web page content where the network serves ads. For example from our earlier reference, the ad space rented out in NYT does not correlate with its purpose.

With these challenges, selecting the right ad network is all the more important in maximizing the impact of your campaigns. Let’s see how.

How to choose the right ad network 

When you’re considering different ad networks for your marketing campaigns, ask the following questions: 

• How extensive is the ad network? 
• Is the ad network global or niche-specific? 
• Does the ad network have the reach you need? 
• Does it offer different ad formats? 
• Does the ad network offer video or rich ad format? 
• Can the ad network compete with real-time bidding or programmatic advertising? 

These questions will help you select the most suitable ad network for your marketing campaigns. 

Network extensiveness and reach matter as they allow you to sell impressions at a higher price when many advertisers bid for it. Check if the network offers contextual targeting. This will help you show ads relevant to other content on the publisher’s web page. 

When the ad network is extensive, it will have representation from many geographical locations, reducing the chances of unsold inventory when campaigns are set with unique targeting parameters. It’s a benefit for both suppliers and publishers. 

If you’re unsure about the ad format you’ll need, go with networks that allow different ways to display ads. Other ad formats optimize monetizing potential for the creative and publisher. 

Consider the pros and cons of real-time bidding or programmatic advertising before committing. It’s better to understand what technology an ad network offers than other options. 

Although programmatic advertising offers enhanced targeting options and real-time insights, it comes with its own set of concerns, such as higher complexity and potential transparency issues.

Source: Marketing Charts

Reach your audience with confidence 

Ad networks are reliable channels for advertisers seeking to make the most of their limited advertising budget. They help you target your audience based on your preferences and reach potential customers on different digital properties. 

Reach and ROI depends on how effectively you choose an ad network. Review the target audience and research to see if the network suits your needs. 

If you’re exploring the right tools to help you reach the right audience, consider cross-channel advertising software to diversify digital strategies. This approach allows companies to have access to a wider range of audiences, and advertisers can take advantage of each channel's unique benefits.

Learn more about different advertising approaches to reach the right audience.