How ad servers function

An ad server is a computer server (a web server), that stores advertisements and delivers them to website visitors.
The content of the webserver is constantly updated so that the website or webpage on which the ads are displayed contains new advertisements -- e.g., banners (static images/animations) or text -- when the site or page is visited or refreshed by a user.
The adserver also performs other tasks like counting the number of impressions/clicks for an ad campaign and report generation, which helps in determining the ROI for an advertiser on a particular website.
There are two types of adservers:
  1. Local ad servers: Local ad servers are typically run by a single publisher and serve ads to that publisher's domains, allowing fine-grained creative, formatting, and content control by that publisher. 
  2. Third-party or remote ad servers. Remote ad servers can serve ads across domains owned by multiple publishers. They deliver the ads from one central source so that advertisers and publishers can track the distribution of their online advertisements, and have one location for controlling the rotation and distribution of their advertisements across the web.
The usual functions of ad servers are:
  • Uploading advertisements and rich media.
  • Trafficking ads according to differing business rules.
  • Targeting ads to different users, or content.
  • Tuning and optimization based on results.
  • Reporting impressions, clicks, post-click & post-impression activities, and interaction metrics.
Advanced functions may include:
  • Frequency capping so users only see messages a limited amount of time.
  • Sequencing ads so users see messages in a specific order (sometimes known as surround sessions).
  • Excluding competition so users do not see competitors' ads directly next to one another.
  • Displaying ads so an advertiser can own 100% of the inventory on a page (sometimes known as roadblocks).
  • Targeting ads to users based on their previous behavior (behavioral marketing or behavioral targeting).
One aspect of ad serving technology is automated and semi-automated means of optimizing bid prices, placement, targeting, or other characteristics. Significant methods include:
  • Behavioral Targeting - Using a profile of prior behavior on the part of the viewer to determine which ad to show during a given visit. For example, targeting car ads on a portal to a viewer that was known to have visited the automotive section of a general media site.
  • Contextual Targeting - Inferring the optimum ad placement from information contained on the page where the ad is being served. For example, placing Mountain Bike ads automatically on a page with a mountain biking article.
  • Creative Optimization - Using experimental or predictive methods to explore the optimum creative for a given ad placement and exploiting that determination in further impressions.
Some notable Ad Servers are:
Smart AdServer - Interactive marketing and ad serving solutions for agencies, publishers and advertisers.
DoubleClick - The complete ad management platform for publishers, advertisers, and agencies.
OpenX - An open-source ad-server released under the GPL license.
ADTECH - Part of the AOL Platform-A group of companies.
Hiro-media - Dedecated video ad server