This article will show you the history of online advertising technology development

As online advertising has developed to this day, many advertising technologies have emerged, such as Ad Network, Ad exchange, DSP, DMP, etc. For novices, it may be difficult to understand these platforms. However, it may be much easier if you understand these technologies from the development trajectory of online advertising.

The following is what the author has collected from the Internet and sorted out based on his own understanding. If there are any inappropriate or imperfect parts, please leave a message to correct and supplement them.

What is Online Advertising?

As the name suggests, online means on the Internet, and "online advertising" refers to advertisements that appear on the Internet.

What are advertisers and traffic owners?

For example, when a user is watching a video on iQiyi, KFC appears in the 60-second advertisement before the video starts.

• Advertiser: KFC is the advertiser, which refers to the brand or agency that places the advertisement.
• Traffic owner: iQiyi is a traffic owner, which refers to media (websites, apps, WeChat public accounts, etc.) with online visiting users.

History of Online Advertising Technology Development

1994: The first banner ad was born

As shown in the picture below, the world's first banner advertisement is full of fun and has a click-through rate of 44%.

1995: Ad Network is born

As shown in the "Direct Sale" figure below, in order to sell advertising inventory (traffic of advertising space), the traffic owner initially needs to find advertisers who are willing to buy. After the two parties reach an agreement, the traffic owner displays the advertiser's advertisement on his own advertising space.

Soon, traffic owners discovered that a lot of their advertising inventory had not been sold out and often had some left over. For example, an ad space has about 70,000 impressions per day. The traffic owner finds a buyer who is willing to buy 50,000 impressions, but there are still 20,000 left unsold.

As the number of traffic owners increases, advertisers also need a more efficient way to place advertisements, rather than negotiating with each traffic owner door to door. As shown in the figure below, Ad Network was born in this situation. It gathers the unsold advertising inventory of traffic owners and sells it to advertisers in a unified manner.

As the market develops and the number of traffic owners increases, they find that they cannot sell out their advertising inventory using one Ad Network. In order to sell more, they begin to use multiple Ad Networks.

As shown in the figure below, traffic owners will first sell their advertising inventory directly to advertisers at high prices, and then sell the rest to the medium-priced Premium Ad Network, and then sell the rest to the low-priced Reamnant Ad Network. This selling process is called waterfalling.

What is Ad Network?

A platform that facilitates transactions between traffic owners and advertisers, such as Lianjia and Taobao. These platforms initially simply aggregated some unsold inventory (remnant inventory), found buyers for them, and then charged a commission.

Later, some platforms began to select the prime advertising positions (premium inventory) of some big-name influential traffic owners and some vertical traffic owners, and sell them to advertisers in need at high prices.

What benefits does Ad Network bring to traffic owners and advertisers?

1. Help traffic owners sell as much remaining advertising inventory as possible.
2. It helps advertisers improve purchasing efficiency and scale because they can purchase inventory from multiple traffic owners on one platform.

A well-known Ad Network "DoubleClick" was born in 1996 and was acquired by Google in 2000. It has now become DoubleClick for Publishers (DFP), a platform that helps traffic owners monetize.

2005: Ad exchange is born

After years of development, there are already a large number of Ad Networks on the market. Sometimes they sell the same advertising inventory. Sometimes an Ad Network gets an advertising inventory but fails to sell it, so it sells it to other Ad Networks. The inventory may change hands many times in the middle, resulting in a lot of handling fees, which are ultimately borne by the advertisers.

In order to purchase better advertising inventory, advertisers have to test and monitor the results of each of the numerous Ad Networks, which takes a lot of time.

In order to maximize profits, traffic owners also need to spend time and energy to test various Ad Networks to see which one has higher profits.

In this context, Ad exchange was born, a platform on which traffic owners and advertisers can trade directly.

Later, real-time bidding technology was born. It conducts open and transparent real-time bidding for each exposure of the traffic owner. The advertiser with the highest bid can get the opportunity to display his or her ad.

With the real-time bidding technology of Ad Exchange, advertisers can bid according to the matching degree of traffic. After the bidding is completed, they can adjust the bidding strategy at any time according to the actual results. For traffic owners, they don’t have to worry about selling their traffic for less money, as the platform will sell it to the advertiser with the highest bid.

2007-2010: DSP, SSP, and DMP appeared one after another

(1) DSP stands for Demand-Side Platform.

Serving demand-side advertisers, the platform allows advertisers to purchase advertising inventory from different ad exchanges, and provides advertisers with functions such as budget setting, targeting setting, frequency setting, blacklist setting, etc. It can integrate third-party DMP to further optimize the audience targeting capabilities.

(2) SSP stands for Supply-Side Platform.

Serving the supply-side traffic owners, after the traffic owners connect their advertising inventory with SSP, they can automatically sell the advertising inventory through Ad exchange without manual intervention. Traffic owners can set a minimum price to avoid selling their traffic at a low price. SSP and Ad exchange are usually on the same platform, and SSP can be considered a function of Ad exchange.

(3) DMP stands for Data Management Platform

It is a platform for collecting, storing and analyzing user data, mainly helping advertisers to more accurately target on the DSP platform and expand the number of similar groups of people.

summary

Online advertising technology has been updating rapidly. The birth of these technologies is to solve the pain points and needs of both buyers and sellers, such as real-time bidding that improves transaction efficiency, oCPC that improves advertisers' ROI, and header bidding that increases traffic owners' revenue.

In subsequent articles, the author will explain in detail the key technologies of each technical platform.

Author: Night Star

Source: Night Star Monologue