Advertising Networks and Advertising Exchanges For Online Advertising.

An advertising network is a group of websites on which adverts can be

purchased through a single sales entity. It could be a collection of sites owned

by the same publisher (e.g. AOL, CNN, Sports Illustrated are all owned by AOL/

Time Warner) or it could be an affiliation of sites that share a representative.

The advertising network acts as an intermediary between advertisers and

publishers, and provides a technology solution to both. As well as providing

a centralised ad server that can serve adverts to a number of websites, the

networks offer tracking and reporting, as well as targeting.

Advertising networks usually categorise the sites by channel. Advertisers pay

to advertise in specific channels, and not in individual sites. Most times, the

campaign will then be optimised based on the best converting sites.

Rates are often negotiated with the network, and placements are booked over

a period of time.

Advertising exchanges, on the other hand, are where unsold inventory is

placed by publishers for bidding. The inventory is sold to the highest bidding

advertiser. Giving advertisers far more control, this type of advertising mimics

a PPC based model of paid search bidding (Generalised Second Price auction)

– but bids are for audience profiles and space rather than for keywords. It

allows publishers to fill unsold inventory at the highest available price, and can

give smaller advertisers access to this inventory.