“Our strategy is much less about increasing the volume of ads and much more about increasing the quality of the content and the quality of the targeting to get the right content to the right people.” – Facebook founder Mark Zuckerberg
Advertisements are part of our overall online experience in the current times. There is hardly any website out there that doesn’t have ads placed on the corners of their webpage. The user has gotten used to overlooking such ads, they literally look through it.
Previously, I have worked alongside the Ad Platform Management Team during one of my Internships. I learned fascinating details about how Ads actually work behind the surface during my time at the firm. It’s been quite some time that I have revisited the topic, hence I decided to write about it.
I have written the post in the form of Questions & Answers. These questions came to mind when I first decided to write about this topic. Keep reading, hope you get to learn something new from it.
Q. When and Where was the first Internet Ad placed?
The concept of Banner Ads appeared in 1994. It started on HotWired, a digital Publication owned by the Wired Magazine. The website started setting aside portions of the website for banner ads. They charged the clients for occupying the space.
AT&T paid HotWired $30,000 to place the banner ad above on their site for three months. The click-through rate for the ad was a whopping 44%. The idea while designing the Ads was to reward the user for clicking on it, rather than selling somebody something. 
Q. What kind of Ads are present on the Internet?
1) Demographic Targeted Ads
Targetted based on your location, race, gender, or other demographic features. For eg., If you reside in the United States, you will likely see Sephora Ads rather than Nyka Ads which is an Indian equivalent brand.
2) Content Targetted Ads
Targetted based on your previously browsed content. For eg., If you like movie X, you will be shown ads of movies similar to X.
3) User Targetted Ads
Targetted based on the User Similarity. For eg., If user X likes products a, b, c, and d. And if you also happen to like products a, b, and c. That makes you similar to user X. Hence, you will be targetted for product d.
Q. What are the most common Ad Placements on the Internet?
Q. How do Ad Networks generate revenue?
Ad Networks have two kinds of Clients –
a) Advertisers: Who wants to put up Ads about their product
b) Publishers: Who provide space on their website to display Ads
Ad Networks coordinate between the two and earn money by taking a cut of the Ad Revenue.
If a visitor on the publisher’s webpage, clicks on the Ad and visits the Advertiser’s website, then both the published and the Ad Network get a cut (Given the Key Performance Indicator is Cost-per-click).
In short, if the final goal is just to make the user visit a website by clicking, and the user does that via the publisher’s webpage, then they get the associated costs. In most cases, CPC isn’t an appropriate KPI, we have other KPIs which are discussed in detail later in the post.
Q. Which are the best Ad Network for Publishers in 2020?
1. DoubleClick Ad Exchange
The DoubleClick Ad Exchange is a real-time marketplace to buy and sell display advertising space. By establishing an open marketplace where prices are set in a real-time auction, the Ad Exchange enables display ads and ad space to be allocated much more efficiently and easily across the web. It’s just like a stock exchange, which enables stocks to be traded in an open way. 
TripleLift is a technology company rooted at the intersection of creativity and media. They believe in programmatic advertising by reinventing ad placement one medium at a time — forging a world in which creative fits seamlessly into every content experience across desktop, mobile, and video. 
AppNexus is a global internet technology company. We operate the world’s largest independent marketplace for digital advertising and powerful enterprise technology for buyers and sellers of digital ads.
4. Index Exchange
Advertising + technology. These worlds are complicated. Index Exchange was built to make things simple. We’re a global advertising marketplace where premium digital media companies transact ad impressions with accountability and in real-time.
5. Facebook Audience Network
Facebook ads work because they’re personal, relevant, and easy to measure on both desktop and mobile. The Audience Network brings these same powerful features to additional app-based mobile experiences, giving marketers even more scale for their Facebook campaigns.
The Audience Network uses the same targeting available for Facebook ads today, including Custom Audiences, core audiences, and lookalike audiences. It features the same measurement tools marketers use for their Facebook ads, too. 
Other Platforms – OpenX, Rubicon Project, Amazon Publisher Services, Verizon Media, District M. For a detailed report, visit the link .
Q. What makes the Ads more effective?
The banners displayed on the websites are influential and effective. Hence, the advertisers invest thousands of dollars to come up with the most attractive ads that trigger the users to click on it.
No user would click on the Ad which looks dull and boring. All the contextual points are taken into consideration while designing Advertisements. One needs to understand the setting, define the audience, and the expected goals.
The displayed graphics are the “Triggers” which compels the audience to perform an “Action” i.e. clicking on it. Once clicked, they are transported on another website, where we need to have some kind of “Reward” for their previous action. Once, they achieve the Reward, they get more “Invested”, leading them to progress towards our desired goal of making a transaction. 
Q. Who is responsible for monitoring Ad Revenues?
– Platform Ad Specialist
– Advertising Sales Consultant
– Digital Growth Officer
– Digital Data Analyst
– Digital Advertising Manager
– Build out and maintain Paid Advertising campaigns for clients based on the client’s goals
– Implement Pixel and Standard Events to track campaign success
– Understand client’s business requirements and design reporting and analysis approaches tailored to their needs
– Monitor campaigns to maintain effectiveness
– Work with Account Managers to ensure client success
– Report on progress and changes made to the campaigns on a daily basis
– Report on results of the campaigns weekly or monthly depending on client needs
– Stay current with client and industry benchmarks
– Development of digital dashboards and reports to measure key metrics and performance indicators
Data sources typically include ad trafficking programs, web analytic tools, and client databases, and social media platform analytics.
Q. What are the Key Performance Indicators in the Ad Industry? 
ROAS: Return on Ad Spend (High ROAS Preferred)
CPA: Cost per Action / Acquisition (Low CPA Preferred)
CPL: Cost Per Lead (Low CPL Preferred)
Clicking on an Ad, and performing a preliminary action like filling a form generates a Lead. A Lead may or may not lead to Conversion i.e. performing the final transaction.
You want most of your leads to convert. Measuring conversions help marketers understand where to optimize Ad Campaigns. It also helps in comparing two Ad Campaigns and understanding of the Target Audience and success rates.
Impressions: An Impression is an Ad displayed to the end-user.
CTR (Click Through Rate): No. of Times Clicked / No. of Times Displayed (High CTR Preferred)
CPC (Cost Per Click): You want more users to click the Ads, and these Clicks help to identify your target audience. It helps in determining the success of your paid campaigns.
CPM (Cost Per Thousand Impressions): 1000 * (Cost / Impressions)
It is the total amount an advertiser pays for 1,000 impressions on their page.
Traffic Source Conversions: Which platforms are giving you the most conversions. For eg. 85% of the users coming from Facebook are making a transaction, compared to 60% from Organic Search, then Facebook becomes our highest Traffic Source.
Engagement: It will be tracked across all the websites. Is the user tweeting about it? Is he liking the pages on other social media websites? How much time is he spending on your website?
Bounce Rate: The user accidentally clicks on the Ad, but leaves as soon as the webpage is loaded. High Bounce Rate shows that targeting is not done on the correct audience. (Low Bounce Rate Preferred)
Q. What are the incentives of the Ad Blocker Platforms?
Ad Blocker Platforms mostly generate revenues from two sources:
a) App store revenue: Some adblockers cost money — e.g. ad-blocking apps for a couple of bucks.
b) Fees from ad tech & publishers: The largest ad blocker, Adblock plus, takes fees from publishers & advertising firms to exclude their ads from being blocked. Of course, they only do that if the ads that fulfill certain “acceptable ad standards”. But even if your ads are acceptable to their standards, and you don’t pay — your ads might still be blocked. 
Q. Comment on the Love/Hate relationship of Users and Ads –
Majority of the users on the Internet are annoyed by the Ads, hence they use AdBlockers. In spite of that, you will have to look at them while browsing Social Media Applications like Instagram or Facebook. You barely have the option to skip them.
Consider a scenario –
If you open a webpage and see Ad X. You like it. You make a purchase.
Return to the webpage. Now, you look at Ad Y and you repeat the steps.
Now, that says something about your willpower. Ad Networks are aware of Human Psychology. People can’t stand temptations put up in front of them frequently. That’s how these Ads work.
As a user, if you become a little more conscious of your choices, you will not be tempted or distracted by the Ads.
Thank you for reading.