ad exchanges

History of the Ad Exchange Landscape Part II: Network Fragmentation and the Ad Ops Problem

In Part I of this series, I talked about the Rise of the Ad Networks, and how publisher ad space was commoditized by inventory aggregators known as Ad Networks.  Part II talks about the start of network fragmentation and the technical and operational challenges this caused for publishers.

Part II: Network Fragmentation and the Ad Ops Problem

As the networks fragmented, Ops teams had to add more and more redirect chains to force users through, and created a reporting nightmare for themselves.  Here’s basically what happened – with one ad network, you trafficked a third party tag to that network, and also gave the network a tag back to your site.  The reason being is that no ad network would pay for an unlimited amount of impressions on a CPM basis, so if there was a traffic spike and the network denied, or defaulted on the impression, they had to have a way to send the user back to the publisher ad server so the publisher could figure out something else to serve.  That something else was usually another ad network tag, and the process repeated until the ad was filled.  For a browser, each call to an ad server might take 20 – 50ms, which seems fast, but if the publisher had three ads on a page and the code was written in-line, meaning each ad has to finish loading before the rest of the page content to load, once you start to pass three or four ad calls per tag, the page starts to feel sluggish to a user.  Keep redirecting that user and sooner or later, the ads don’t have time to finish loading before the user moves to the next page, which causes a discrepancy between the publisher and the network, not to mention a lousy experience for users on the publisher’s website.  The publisher thinks an ad was served, but the network’s ad never finished loading.  Ad server reports grew less accurate because the same impression could be counted multiple times as networks sent a user back to the publisher, inflating the numbers and throwing a wrench in any inventory forecasts as well.  Not only that, but from an Ops perspective, the more unsold inventory there was, the more relationships were necessary with ad networks to fill the inventory. Yikes!

The result was a complex and inefficient setups in the publisher’s ad server, with lots of redirects strung together to pass a user from ad network to ad network until one was willing to serve an impression.  All this caused page latency, a lousy user experience, high ad server discrepancies, a billing nightmare, and an accelerating erosion of publisher ad sales.

In other words, it was a huge business opportunity – enter the Network Optimizer, ancestor of the Supply Side Platform.

Next – History of the Ad Exchange Landscape Part III: Network Optimizers to the Rescue (?)