The Little Black

Book of Ads

jouncemedia.com
Jounce Media’s Little Black Book series is your
quick reference for all things ad tech. Each book
contains fundamental concepts that underpin the
advertising technology ecosystem. Master the
content in these books, and you’ll be armed to
tackle any digital marketing problem.

For more information about Jounce Media’s ad

tech consulting services, visit jouncemedia.com

© 2018 Jounce Media, LLC All Rights Reserved

 Must-Know Concepts Must-Know Terminology
This book provides a broad overview of must-know digital Throughout the book, we use the following industry-specific
advertising concepts. For deep dives into these topics, refer to terms to describe the buying and selling of digital advertising
the rest of Jounce Media’s Little Black Book series. inventory:

Digital Advertising Landscape

Publisher A seller of ad inventory – either a website
❑ Global Ad Spend or an app. Also referred to as the sell side
❑ Media Buying Platforms or the supply side.

Open Internet Advertising Advertiser A buyer of ad inventory. Also referred to as

the buy side or the demand side.
❑ Open Internet Supply Chain
❑ Publisher Reservations
❑ Header Bidding Ad Exchange A piece of technology that conducts real-
❑ Third Party Ad Serving time auctions for ad inventory. Supply-side
platforms (SSPs) all operate ad exchanges,
❑ Video Ad Serving
but also have additional pieces of
❑ Native Ad Serving publisher technology.
❑ Ad Blocking
Bidder A piece of technology that buys inventory
on ad exchanges. Demand-side platforms
Programmatic Advertising
(DSPs) all operate bidders in addition to
❑ Real Time Bidding other pieces of advertiser technology.
❑ Private Marketplaces
❑ Audience Targeting and DMPs
Client Side Everything that happens on a consumer’s
Measurement & Attribution device.
❑ Impression Tracking
Server Side Everything that happens remote from a
❑ Viewability consumer, either in the network or a data
❑ Attribution center. Server side activities happen in the
cloud.
❑ Must-Know Ad Tech Vendors
Global Ad Spend
Advertisers will spend over $500 billion globally on paid media in Unlike paid search marketing, which is highly concentrated
2018. Nearly half of that spend will be allocated to digital among a small number of search engines, display
advertising channels. advertising is highly fragmented.

2018 Global Paid Media ($B) Display Advertising Buying Platforms

The Facebook Internet

$600
Digital Ads The Google Internet
$28
$500 $33

$54

$400

$183
$300
$535

$200
$113

Real Time Bidding Amazon Pinterest

$100
& Reservations
$124
Twitter
Snap
$0
Display Search TV Print Radio OOH Total The Open Internet
Media Buying Platforms
Powerful media companies, often called walled gardens, require
advertisers to execute campaigns within proprietary media
buying platforms.
Due to these walled garden policies, most enterprise
marketers operate siloed campaigns for the six largest media
properties. These marketers then centralize buying for the
open internet (10,000+ media companies) through a demand
side platform (DSP).
Open Internet Supply Chain
Each time an open internet publisher sells an ad impression, its
ad server selects from many potential demand sources. If the
publisher decides to fill the impression via a programmatic
auction, five technology components communicate with each
other to deliver the ad. These five components are consistent
across desktop and mobile devices, and across banner, video,
and native ad formats.

Optional step for

real time bidding
transactions

A Note About Real Time Bidding

The real time bidding (RTB) ecosystem relies on separating
the ad exchange and bidder into two independent pieces
of technology. Walled gardens and ad networks often
combine these buy-side and sell-side technology
components into a closed auction environment.
Publisher Reservations
Nearly all open internet publishers operate ad servers that use
waterfall logic in which monetization channels are checked in a
prioritized sequence.
Direct sold campaigns are delivered at the highest priority
level, enabling them to consume impressions even when
an auction-based campaign submits a higher bid price. In a
traditional waterfall, programmatic demand is then
evaluated in a pre-determined sequence based on the
historic yield of each partner.

Publisher
Ad Server

Direct Sold if delivery required Serve

Priority Level 1 Campaign Ad
if no direct-
sold campaigns
if auction
Ad clears floor
Conduct Serve
Priority Level 2 Exchange
Auction Ad
A
if auction
fails
if auction
Ad Conduct clears floor Serve
Priority Level 3 Exchange Auction Ad
B
if auction
fails

House
Priority Level n Ad
Header Bidding
Header bidding enables the publisher’s ad server to make an Prior to loading its ad server, the publisher requests CPM
informed choice about which ad exchange will best monetize prices from one or more ad exchanges and ad networks.
each available impression. The winning bid price from each programmatic channel is
then passed to the publisher’s ad server, which awards the
impression to the best-monetized demand source. Because
all demand competes at the same ad server priority level,
Bidder header bidding is said to “flatten the waterfall.”

Ad
Bidder Exchange
A

Bidder
Publisher
Ad Server

Bidder Direct Sold Ad Ad

Exchange Exchange
Priority Level 1 Campaign
A B
Ad
Bidder Exchange $X CPM $Y CPM $Z CPM

B
House
Priority Level n Ad
Bidder

Many publishers continue to utilize tiered waterfall logic in

conjunction with header bidding. In a common
implementation, private marketplace bids are assigned a
higher priority level than open exchange bids.
Third Party Ad Serving
Most enterprise marketers deliver digital impressions through a
third party ad server. This third party ad server manages creative
delivery across nearly all publishers on an advertiser’s media
plan.
Some premium publishers require site served ads, in which
creative delivery is controlled by the publisher’s ad server.
In these cases, the publisher often loads an impression
tracker from the advertiser’s ad server.

Third Party Ad Serving Site Served Ads

1. Publisher traffics creative

assets in publisher ad server
1. Advertiser traffics
creative assets in
advertiser ad server

2. Publisher ad server 2. Publisher ad server

requests creative from delivers creative assets
advertiser ad server to page

3. Advertiser ad server delivers 3. Optional: Advertiser ad server

creative assets to page records that an impression was
delivered

Third party ad serving centralizes creative
management for advertisers, but requires
standardized ad formats that are supported by all
publishers.
Site served advertising gives publishers control
over the way ads are rendered on their properties.
This enables publishers to implement custom ad
formats that are tightly integrated with organic
content.
Video Ad Serving
The video ad serving template (VAST) is a standard format that
video players use to render video ads. VAST files contain
information about where to find various video renditions as well
as instructions for how to load engagement tracking code.
In the most common case, the video player retrieves a VAST file
from the publisher’s ad server. This VAST document then instructs
the OVP to communicate with the advertiser’s ad server to fetch
a video ad and post engagement events.

Advertiser Ad Server

User Profile
User 123 Publisher
Video Start Ad Server
Video Complete

1. Deliver VAST tag from

selected buyer
2. Retrieve
appropriate
rendition from
advertiser ad server

3. Report engagement
events to server-
side user profile

The VAST standard is managed by the Internet

Advertising Bureau (IAB). Full documentation is
available at https://www.iab.com/guidelines/digital-
video-ad-serving-template-vast-4-0/
Native Ad Serving
The IAB has also formalized specifications for seven layouts that
publishers can use to render native ads on their properties. This
standardization allows publishers to design highly customized
advertising experiences without requiring advertisers to develop
unique creative assets.
Advertisers can traffic a single native creative ad unit to be
delivered across a diverse set of publisher inventory. When the
impression is served, the advertiser’s ad components are
assembled to render a publisher-specific native ad.

Anatomy of a Native Ad

Headline Primary advertising

message
Description Secondary
advertising message Thumbnail

Thumbnail Primary ad image

Brand Logo Advertiser’s logo Headline
image
Description
Brand Name Advertiser’s name
Promoted by ______

Content URL URL to be used for

clicks Brand Brand
Name Logo

Note that because publishers control the template that

renders creative assets, not all ad components are utilized
for every native ad impression.
Ad Blocking
10-20% of global internet users have installed an ad blocker to
remove both interruptive ads and advertising tracking tags. Most
ad blocking products utilize two blocking techniques to
maximize the number of ads and tracking tags that can be
successfully removed.
Connection Refusal
Prevent client-server connection for known
advertising technology domains
Connection refusal is powered by a library of known ad
tech domains. The most comprehensive list is publicly
available at https://easylist.to/easylist/easylist.txt
When possible, the ad blocker prevents the user’s browser
from requesting ad content. This is called connection refusal.
In cases where connection refusal fails and ad content is
delivered the user’s browser, the ad blocking product may
utilize an additional technique called element hiding, which
prevents the ad content from rendering on screen.
Element Hiding
Allow ad content to be downloaded, but
prevent content from rendering
Element hiding is most commonly employed for
publishers who utilize ad stitching, in which both organic
and advertising content is loaded from the same domain.
Real Time Bidding
When open internet publishers sell inventory programmatically,
they most commonly utilize the OpenRTB standard, which is
maintained by the IAB. For each available RTB impression, an
ad exchange conducts an auction. The ad exchange sends a bid
request (a description of the impression) to multiple potential
bidders.
Bidders evaluate the bid request to determine whether it is a
match for campaign targeting criteria, and if so, how much it is
worth to the advertiser. Bidders then send a bid response (a
price) back to the ad exchange. The winning bidder is then
awarded the impression by the ad exchange.

Bid Request
1

Bid Response
2
Bidder Ad Exchange
Win Notification
3

Ad Creative
4

The OpenRTB standard is managed by the Internet

Advertising Bureau (IAB). Full documentation is
available at https://www.iab.com/guidelines/real-
time-bidding-rtb-project/
Private Marketplaces
Publishers are often willing to provide preferred access to
inventory in exchange for price and volume commitments.
These commitments were traditionally negotiated via insertion
orders. In the programmatic landscape, private marketplaces
facilitate similar commitments.
Once publishers and advertisers agree on the business terms of a
private marketplace, the publisher’s ad exchange assigns a deal
ID to the transaction. All qualifying bid requests are populated
with an optional deal ID parameter, and the advertiser’s bidder
targets this deal ID.

Deal ID ABC
Placement = Sports Section
Priority = First Look
Price = $2.00 CPM
Volume = 5,000,000 Impressions
Bidder

$5 $5.00 Bid

$4

Bid Request: Deal ID = ABC

$3
Bidder Ad Exchange
Bid Response: Bid = $2.00 $2 $2.00 Bid

$1 $1.00 Bid

$0

Bidder
Private marketplaces disrupt the typical “highest bid wins”
model of programmatic transactions. In a private
marketplace, it is possible for a low bid to win the auction
because the advertiser has made a broader business
commitment to the publisher.
Audience Targeting & DMPs
Data management platforms (DMPs) supply audience lists to The DSP then listens for ad exchange bid requests that match a
inform targeted ad campaigns. Most commonly, targeting lists user ID on the marketer’s targeting list.
are supplied to a marketer’s DSP.

DMPs also distribute data to:

• Publisher ad servers, walled gardens, and search engines
for audience-targeted campaigns
• Advertiser ad servers for personalized creative messaging
• Owned media properties for personalized website and app
experiences
Impression Tracking
Advertisers who partner with an attribution specialist may load
an additional impression tracker each time an ad is delivered to
a user. These measurement trackers allow attribution
companies to maintain a complete record of each user’s ad
exposure, which enables path-to-purchase analysis.

Optional step for

real time bidding
transactions

Tracking for Site Served Ads

For site served advertising, impression
trackers are loaded by the publisher’s
ad server.

Tracking for 3rd Party Served Ads

For third party served advertising, impression
trackers are loaded by the advertiser’s ad
server.
Viewability
There are three kinds of non-viewable impressions: ads that are
out of view, ads that appear for a very short period of time, and
ads served to non-human traffic. Advertisers and publishers can
utilize viewability impression trackers to measure the success
rate with which they serve viewable impressions.
The Media Ratings Council (MRC) maintains widely-accepted
viewability definitions, which are included below. Some
advertisers and agencies also define custom viewability
standards.

Out of View Short Duration Non-Human Traffic

Below the fold Skipped video Bot networks / infected PCs
Inactive tab Back button Web crawlers
Covered by other content

Display: 50% of pixels Display: 1 second Display: Human traffic

Video: 50% of pixels Video: 2 continuous seconds Video: Human traffic

Attribution
Attribution systems require access to data sets that contain When a user converts, the attribution system can analyze the
records of each consumer’s path to purchase. Advertiser ad user’s prior ad exposure and make a judgment about which ads
servers are most commonly the source of this attribution data. should be assigned credit for influencing the purchase.

T-28 Days T-21 Days T-14 Days T-7 Days Purchase

Ad #1 Ad #2 Ad #3 Ad #4
$
Ad
Clicked

Attribution Window

The three most common attribution methodologies are

last-click, last-view, and multi-touch:

Last Click ✓

Last View ✓

Multi-Touch 30% 50% 20%

The primary challenge with all attribution methodologies

is quantifying incrementality. Through lift experiments
and advanced multi-touch attribution, advertisers can
quantify the likelihood that each sale would have
happened in the absence of paid media.
Must-Know Ad Tech Vendors
Ad Serving Data
Publisher Ad Servers Data Management Platforms

Ad Exchanges

Multi-Touch Attribution Systems

Bidders (DSPs)

Viewability Verification Systems

Audience Verification Systems

Advertiser Ad Servers