An ad network is a company which aggregates advertising inventories from a large number of publishers’ websites. The advertising network is a commercial and technical intermediairy between advertisers and publishers.
Ad networks are a single buying opportunity for media buyers and an opportunity to access advertising market for small publishers or to sell remnant inventory for premium / standard publishers.
Principles of an ad network:
Image source : "AD NETWORKS AND HOW TO CHOOSE THEM" A White Paper by Robert Tas.
Big publishers generally use sales houses for selling premium inventory and advertising networks for selling remnant inventories. A website owner can use simultaneously several ad networks in a chain system or daisy chain.
Image source Admeld
Advertising networks are a complex ecosystem. There are different types of ad networks:
Some ad networks combine the different types of offers.
Ad networks business models are based on revenue sharing (commission) or trading. In trading cases, the ad network bulk buy advertising space at low CPM costs and resell it to advertisers at higher CPM or with a performance based agreement (CPC, CPA, CPL,etc.)
On an ad network an advertiser can buy space on a single site (Run Of Site), on multiple sites (Run Of Sites), across the entire network (Run Of Network) or on channels.
For a run of network campaign, an ad network delivers ad impressions on several publishers’ website (often hundreds or thousands of websites) from a centralized ad server.
Biggest US ad networks deliver billions of ad impressions monthly and reach over 100 millions users for a US market reach between 60 and 80 %.
The biggest worlwide network is Adsense which offers display advertising spaces on over a million publishers websites. Adsense is a PPC ad network integrated in Google Adwords offer.