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 website or advertiser most money, and monitor progress of different advertising campaigns.

Ad server

An ad server is a computer server that stores advertisements and delivers them to website visitors. Ad servers come in two flavors: local ad servers and third-party or remote ad servers. Local ad servers are typically run by a single publisher and serve ads to that publisher's domains, allowing fine-grained creative, formatting, and content control by that publisher. Remote ad servers can serve ads across domains owned by multiple publishers. They deliver the ads from one central source so that advertisers and publishers can track the distribution of their online advertisements, and have one location for controlling the rotation and distribution of their advertisements across the web.

The local ad server was first developed and introduced by NetGravity in January 1996 for delivering online advertising at major publishing sites such as Yahoo and Pathfinder. The company was founded by Tom Shields and John Danner, and based in San Mateo, California. In 1998, the company went public on NASDAQ (NETG), and was purchased by DoubleClick in 1999.

The remote ad server was first developed and introduced by FocaLink Media Services in February 1996 for controlling online advertising or banner ads. The company was founded by Dave Zinman and Jason Strober, and based in Palo Alto, California. In 1998, the company changed its name to AdKnowledge, and was purchased by CMGI in 1999.

Ad server functionality

The typical common functionality of ad servers includes:

Uploading advertisements and rich media.

Trafficking ads according to differing business rules.

Targeting ads to different users, or content.

Tuning and optimization based on results.

Reporting impressions, clicks, post-click & post-impression activities, and interaction metrics.

Advanced functionality may include:

Frequency capping so users only see messages a limited amount of time.

Sequencing ads so users see messages in a specific order (sometimes known as surround sessions).

Excluding competition so users do not see competitors' ads directly next to one another.

Displaying ads so an advertiser can own 100% of the inventory on a page (sometimes known as roadblocks).

Targeting ads to users based on their previous behavior (behavioral marketing or behavioral targeting).

Ad targeting and optimization

One aspect of ad serving technology is automated and semi-automated means of optimizing bid prices, placement, targeting, or other characteristics. Significant methods include:

Behavioral Targeting - Using a profile of prior behavior on the part of the viewer to determine which ad to show during a given visit. For example, targeting car ads on a portal to a viewer that was known to have visited the automotive section of a general media site.

Contextual Targeting - Inferring the optimum ad placement from information contained on the page where the ad is being served. For example, placing Mountain Bike ads automatically on a page with a mountain biking article.

Creative Optimization - Using experimental or predictive methods to explore the optimum creative for a given ad placement and exploiting that determination in further impressions.