From eb62ec7cbf927d93e8676fb4304444c4327eec5b Mon Sep 17 00:00:00 2001 From: brettlangdon Date: Fri, 22 Nov 2013 19:26:30 -0500 Subject: [PATCH] port over article http://brett.is/writing/about/how-ads-are-delivered/ --- .../about/how-ads-are-delivered/index.md | 85 +++++++++++++++++++ 1 file changed, 85 insertions(+) create mode 100644 contents/writing/about/how-ads-are-delivered/index.md diff --git a/contents/writing/about/how-ads-are-delivered/index.md b/contents/writing/about/how-ads-are-delivered/index.md new file mode 100644 index 0000000..4cffc3c --- /dev/null +++ b/contents/writing/about/how-ads-are-delivered/index.md @@ -0,0 +1,85 @@ +--- +title: How Ads are Delivered +author: Brett Langdon +date: 2012-09-02 +template: article.jade +--- + +A really brief look into how online advertising works. + +--- + +For the last 6 months or so I have been working in the ad tech industry for a +search re-targeting company, +Magnetic, +as a software engineer working on software to deliver ads online and I wanted +share some of the things I have learned. + +When I started working for them I did not realize how online ads are delivered. +I thought that web sites offer up space to advertisers and then they show various +ads based on what the web site wants them to show. Well, this isn’t really wrong +but not quite right. There are a few more pieces to the puzzle. + +### Advertiser + +An advertiser is the person, or agency, that wishes to deliver ads to the internet. + +### Publisher + +A publisher is a person, or organization, that has online ad space that they +wish to fill. + +### Ad Exchange + +An ad exchange is a company that allows various advertisers to bid on available +ad space provided by publishers. + + +## How It Works + +This is the part I never fully understood until I started working in the industry +(there are still parts I do not know). The magic for most online ads is in the ad +exchange. When a user goes to a website there are various iframes on the page which +the publisher has pointed to the ad exchange. This lets the exchange know that +there is space currently available. + +So the exchange then compiles a bid request which contains as much information +about the ad space and user as possible. This information can contain simple +things like the size of the ad and location of the add (above or below fold), to +various information about the user, geo location, window size, etc. + +The bid request is sent out to all of the advertisers to let them know about the +potential ad space available. The advertisers must then make a decision whether or +not they want to bid on that ad space, based on the information provided. If they +have an ad that meets the criteria then they will return a bid response to the ad +exchange telling them of their bid. The bid price for an ad is provided in micro +dollars or one one millionth of a dollar. Another common unit for ad tech is CPM +or cost per mile which denotes the price for every one thousand ads. + +Once the ad exchange has all the bids they take the ad with the highest bid to +deliver. The cost you pay is not the price you bid, but one bidding unit above +the next highest bid. Lastly, the ad is delivered to the user. + +One thing to note, which I find very cool, is this all happens in real time for +every page request that a user makes. Next time you go to a website which contains +ads, stop to think about what had happened for that ad to become available to you. + + +## Why Is This Cool? + +Some might not find this topic very interesting, others might hold a grunge to the +fact that ads are being shown on websites or to the fact that some companies are +maintaining search information about them on their systems (in order to make +future ad decisions based on available ad space for you specifically). To me this +is interesting because of the scale that these systems need to be in. Our company +does not make a few hundred bids per day or even hour, this can happen in seconds. +We also do not make any “static” decisions based on the bids that we receive, +instead we are trying to make informed, real time decisions as to which ads we +want to show. + +Our systems need to not only be scalable, for an increase in available bids, but +they also need to be fast. If we waited for a SQL query to finish we would lose +out on hundreds of bids before we got our response. Our system is based heavily +on caching and rebuilding useful information for bidding. The fact that our +company works under these constraints requires our developers (that includes me) +to have to think outside the box and about the bigger picture.