Ad Network: What Is It and How Does It Work?

by The MNTN Team

7 Min Read

Connected TV (CTV) ads are projected to experience a compound annual growth rate of 22.4% in 2024, reaching a total revenue of just over $30 billion. This relatively meteoric pace makes CTV the fastest-growing paid marketing channel in the United States.

Today, there are dozens of streaming services that offer advertising slots that marketers can take advantage of. But to tap into these slots, you’ll need to use an ad network.

Whether you are brand-new to the concept of ad networks or simply need a push in the right direction, the following guide is for you. You’ll learn the ins and outs of what ad networks are, how they work, and the kinds of benefits you can unlock by using them.

What Is an Ad Network?

An ad network is a platform that connects advertisers with publishers that want to host ad content.

In the realm of CTV, ad networks connect you with streaming service providers who have marketing space to sell. By aggregating ad inventory from various publishers, an ad network provides you with a one-stop shop for purchasing ad space. Instead of reaching out to multiple providers, you can manage your campaign space using a single platform.

Ad Network vs. Ad Exchange

Ad networks and ad exchanges both facilitate paid online marketing, but they each operate a bit differently.

An ad network acts as a broker, collecting available space from publishers and selling it to marketers. It will typically sell that space in bundles or packages, which can provide long-term cost savings and volume discounts. However, if you are trying to target a very niche audience, you might end up paying for more space than you need.

An ad exchange, on the other hand, is a digital marketplace where you work directly with sellers through an auction-based real-time bidding system. As such, ad exchanges do offer more transparency and flexibility, allowing you to bid for individual impressions.

Learn more about ad networks vs ad exchanges.

Ad Network Benefits

By using an ad network to purchase marketing slots, you can unlock potential benefits such as:

Expanded Audience Reach

Ad networks consolidate inventory from many different publishers, giving you access to a wide and diverse audience. You won’t have to hunt down inventory yourself, and can instead purchase the packages or slots that best align with your reach goals.

Precise Audience Targeting

An ad network will offer sophisticated targeting options, allowing you to direct your content to specific demographics, geographic locations, interests, and behaviors. That kind of precise targeting ensures your ads are seen by the most relevant audience, improving the odds of a conversion.

Enhanced Cost Efficiency

Ad networks are often able to secure ad space at lower rates due to bulk discounts and long-term relationships with publishers. Tapping into these savings will help ensure you get more bang for your buck while also giving you access to larger audiences.

Saves Time

Managing individual relationships with multiple publishers can be time-consuming. Ad networks simplify the process by working as your single point of contact. They’ll handle negotiations and logistics, allowing you to focus on planning your next campaign.

Comprehensive Insights

Similar to marketing on CTV platforms, ad networks give you access to detailed analytics and reporting capabilities. You can then use the insights you obtain to determine which of your ads are resonating with your audience and where you can make adjustments to achieve better results.

How Do Ad Networks Work?

To explain it another way, ad networks function by collecting marketing slots from numerous publishers and selling the inventory to publishers at a slight markup. Here’s a basic rundown of the process:

Aggregation: The ad network groups together available ad space from various publishers.
Categorization: The network then categorizes its inventory based on demographics, content type, and user behavior.
Matching: Advertisers submit their ad creatives and specify their target audiences.
Delivery: The content is displayed on selected channels.
Reporting: Performance data is collected and analyzed, giving advertisers a glimpse into their campaigns’ efficacy and how well they align with their specified marketing metrics.

Each ad network’s process will vary, but generally that process will consist of these critical steps. Some networks focus primarily on CTV ads, whereas others consolidate and sell a wide range of OTT advertising slots, including placements on websites.

Types of Ad Networks

Ad networks are classified into one of the following types:

Vertical Ad Network

A vertical network specializes in a specific niche or industry, such as healthcare, technology, or travel. Using a vertical platform allows for more precise targeting and higher engagement rates, as your content will be presented to audiences with relevant interests.

Horizontal Ad Network

A horizontal ad network covers a wide range of industries and categories, offering broad reach across diverse audiences. These kinds of networks are ideal if you want to reach varied user bases and engage with many prospects at once.

Premium Ad Network

These platforms focus on high-quality, often exclusive ad inventory from reputable publishers. While their costs might be higher, your ads will benefit from placement on well-known sites and channels with high traffic and credibility. Positioning your content on these channels can boost brand perception and trust.

Specialized Ad Network

A specialized ad network targets a specific format or subset of user behavior. For instance, a platform that only aggregates CTV advertising space would be considered a specialty ad network. Using such a platform could help power your CTV marketing campaigns, allowing you to connect with niche audiences through streaming ads.

Targeted Ad Network

Lastly, targeted ad platforms use advanced data analytics to deliver highly focused ads based on user behaviors and preferences. These networks ensure your content gets shown to those who are most likely to be interested in your product or service. Targeting can promote a better return on investment (ROI) by cutting down on waste and focusing on high-quality prospects.

Ad Networks and Programmatic Advertising

Ad networks and programmatic advertising each serve unique roles while operating within the same ecosystem.

Ad networks facilitate a human-mediated process of connecting advertisers with publishers to negotiate the sale and placement of ad space. This traditional approach involves direct oversight in reviewing ad creatives and configuring campaigns, ensuring manual control over the advertising process.

Conversely, programmatic advertising revolutionizes this by employing automation and real-time bidding (RTB) through demand-side platforms (DSPs) and supply-side platforms (SSPs). This data-driven approach minimizes human intervention, optimizing ad spend and targeting by leveraging advanced algorithms and analytics for efficient and precise ad placement.

How Do Ad Networks Make Money?

Typically, ad networks make money through commissions or margins on the placements they facilitate. There are several different revenue structures you’ll encounter, such as:

Markups: The network purchases ad space and sells it to you at a slightly higher rate, pocketing the difference
Commissions: Some networks charge a commission based on ad performance, such as a portion of ad spend
Subscription Models: A few platforms charge a subscription in exchange for access to their services

Of course, you must weigh the pros and cons of each option to find the best deals for your business.

Ad Network Examples

There are dozens of ad networks available, each of which offers different features and advantages. A few of the most popular examples:

Google Display Network: One of the largest advertising platforms out there
Media.net: Powered by Yahoo and Bing; focuses on contextual advertising
AdRoll: Specializes in retargeting and programmatic content

Again, these represent a mere handful of options. As such, it’s best to take the time to explore and discover specialty platforms that best align with the channels you’re interested in using.

Why Every Business Needs MNTN Performance TV

MNTN’s Performance TV prioritizes a Living Room Quality approach by locking in direct deals with premium streaming networks. Our hands-on negotiating strategy saves you the hassle of striking deals with individual networks while also ensuring you can run your TV ads during top-tier programming. And thanks to our savvy negotiating skills and direct dealings with a huge network of streaming service providers, you’ll also enjoy preferred pricing and a stronger ROI.

But that’s not all! MNTN Performance TV also positions you to succeed with our best-in-class reporting tools, Creative-as-a-Subscription™, and unwavering commitment to doing things better than the competition.

Try MNTN Performance TV today and rethink the way you secure advertising space. Request a demo to get started.

Ad Networks: Final Thoughts

An ad network can be a valuable tool for finding marketing slots and getting your content in front of the right audiences. Taking advantage of advanced platforms like MNTN Performance TV can further enhance the value of ad networks while also unlocking the power of CTV marketing.