Many of you may have probably read Tim Mayer’s recent blog post “Why Does an Advertiser Need an Ad Server?” and I wanted to dig a level deeper into the ad server topic and explain the differences between using a first-party ad server versus a third-party ad server. I collaborated with Tim on the below so that I could provide his insights here as well as my own—two for one!
Let’s jump in:
The primary difference between a third-party ad server and a first-party ad server is that a first-party ad server can return ownership and control of an organization’s most essential online asset—audience data—directly to the advertiser.
• Third-party ad servers deliver impressions and clicks for the client, but set audience cookies on behalf of the ad server.
• First-party ad servers not only deliver impressions and clicks for the client, but also deliver audience data for the client by writing cookies into the client’s cookie space according to the client’s technical specification.
Third-party ad servers originally acted as independent auditors across inventory sources and data assets they didn’t control. Today of course, third-party ad servers do more, including optimizing creative delivery and making targeting decisions around data assets they do control, very often to inventory sources owned and integrated in the technology stack of a common parent company. In addition, they continue to deliver ads and performance reports.
While performance metrics and delivery services remain essential parts of an ad server’s value proposition, audience data, which is generated when an ad server delivers ads to users, is now the foundation for management. It is subsidized entirely by an advertiser’s investment in using an ad server. Third party ad servers retain ownership and control of this audience data by building out audience data in the form of ad server cookies.
Impacts of the Third-Party Technology Approach
The third-party ad server approach takes data relevant to transactions or customer engagement on advertiser sites and hands off this advertiser data to different third-party ad tech providers. The result? It has become quite customary for more and more providers to participate in an increasing number of “hand-offs.” daisy-chaining differentiated systems with differentiated measurement and data management methodologies and, in turn, producing inevitable discrepancies and operational inefficiencies.
What can you do? Discontinue fragmented operating procedures involving hand offs of advertiser business intelligence to third-party online ad tech vendors. This will deliver operational and measurement efficiencies across all digital efforts, resulting in the integration of online marketing and online site management.
Since most enterprise-level site analytics solutions can be configured to operate in the first party, you can also use a first-party ad server to eliminate the need to create distinct advertising channel and analytics data sets.
What is First-Party Technology and How Does it Work?
A first-party ad server operates out of the domain of the advertiser (e.g. www.advertiserdomain.com) and therefore all the data, be it CRM or first-party data or third-party data, remains in the confines of the advertiser domain and is not subject to potential data leakage. Data leakage is the risk of the data getting in the hands of other networks, publishers or competitors and allowing them to target your site visitors.
There are several things that can be done by operating a first-party ad server within the domain of the advertiser in terms of data access and data handling. Below are a few use cases that highlight how first-party ad servers can ultimately deliver higher campaign performance.
1) Actioning first-party data for ad decisioning: Once an advertiser captures data about a user’s interaction with their site in the first-party cookie space, the data can be leveraged for ad decisioning. Ad decisioning considers what the advertiser knows about that user and serves the best creative for that given user. This provides the ability to execute one-to-one marketing and superior ad performance due to the increased relevancy and resonance of the message for that specific user.
2) Real-time linking to DMP platforms such as Bluekai: When an advertiser connects with a prospect or customer, the ad server can connect in real time to the advertiser’s DMP platform and request targeting data on that user. The requested targeting data can then be used to serve a targeted ad on first impression, i.e. the first time that user is seen by the advertiser.
3) Adobe Audience Manager or site analytics cookies can be used to creative decision ads for specific users: Site analytics cookies as well as cookies from DMP-like solutions such as Adobe Audience Manager can be accessed by the first-party ad server and used to segment users and serve the right ad to the right individual. This can also solve the cold start problem when an advertiser is getting started with a first-party ad server and has not implemented their audience strategy and does not have a critical mass of cookies on the web to target with. No integration is needed to leverage these existing cookie pools.
4) Additional data values may be written into the cookie space in real time at the time of delivery: This data can be used for targeting or reporting. These values can be advertising centric data such as dynamic frequency caps, advanced sequencing, branch and tree storyboarding, unit interaction and dynamic offer testing. This data can be pushed into the cookie space or can be passed back to the CRM system to provide a very detailed 360-degree view of the advertising interactions with the customer. You also have the ability to integrate these values into reporting to segment campaign performance by finer grain attributes.
As you can see, using a first-party ad server and operating within the domain of the advertiser can provide unique capabilities for data actionability, data collection, data targeting as well as campaign performance reporting, versus a third-party ad server. The ad server has a big job to do and is a real Swiss Army knife in the case of leveraging your First-Party data.
Anything else we should be adding to these use cases? I’d love to hear your thoughts below.
O’Neill Stanleigh currently works with Trueffect as Director of Solutions. A part of the Ad Tech world since the dot com boom, O’Neill is one of the original pioneers of the online marketing space with well over a decade of experience deploying, managing and implementing ad delivery and web analytics systems.