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Introduction & Vision

One of the major challenges within the online advertising market is the massive fragmentation of companies, services, and technology providers. A significant lack of standards among the mix of technologies and disparate datacenters makes integration between parties difficult if not impossible. The new advent of cloud computing--massive, central, multi-tenant datacenters for large-scale computing--introduces a new possibility of collaboration and integration between advertising companies. AppNexus has built the first such cloud-computing environment, and is building the software layers that will enable and push the new "cloud advertising" paradigm.

More and more, the buying and selling of online display advertising is moving from a "bulk impression" model to a "user specific" buying model. Agencies, networks, and publishers are getting smarter about which specific users are valuable for a given campaign; advertisers now require more and more detailed buying mechanisms to reach those specific users. To acquire individual users, buyers of ad inventory need to be able to apply their data and decision making systems to each individual impression. Instead, today's mechanisms require bulk purchasing based on some coarse targeting parameters. Attempts at deeper integration generally involve some level of HTTP redirects which bounce a user back and forth between various serving systems. (I've written some more detailed information about the limitations of redirects on my blog here and here.)

This can change, however, in the low-latency environment of a computing cloud. With a dependable millisecond latency to buyers, sellers can request real-time valuations for each and every impression; allowing both buyers and sellers to maximize the efficiency and yield of their inventory.

Such integration isn't easily possible without several core underlying integration technologies. First - we must realize the association of one cookie-ID to another. It would be impossible for ad buyer B to value an impression from seller S without knowing that S's user-id 'ABC' is the same as B's user-id '1234'. For this reason AppNexus is providing a central User ID Mapping service to enable all parties to synchronize their cookies to a central ID.

Second - there is no industry-wide standard that dictates how companies can trade inventory in a cloud environment. To facilitate this process AppNexus is defining standards and a set of tools that enable cloud customers to request and receive server-side valuations of their ad-inventory, track usage and billing information, and enforce some basic quality standards. We call this the Impression Bus.

How It All Fits Together

Key Concepts

  • A partner represents a business entity that owns or buys media. In the case of a traditional agency, the partner would be the client c/o the agency (ie "Visa c/o OMG"). In the case of an ad network that buys/sells on its own account, the partner would be the ad network itself.
  • Each partner needs to assign at least one bidder to operate on its behalf. Multiple clients can run through the same technical infrastructure (for instance, both American Express and AOL use the same Media Math bidding engine) but each will have a unique bidder ID for tracking purposes.
  • A partner that provides inventory (via a TinyTag) has exclusivity rights on that inventory. This partner may choose to exclude other bidders from this inventory, or can set a reserve price that other bidders must meet to take the inventory away.
  • A TinyTag is an AppNexus server-side ad tag that is generated for a partner's DART, ATLAS, or Y! ad tags. It contains a universal inventory ID, a reserve price for the media buy, and a list of approved universal advertisers.
  • Every major brand-quality web site is assigned a universal inventory ID so that bidders can refer to it in the same way. Some large web sites, like Yahoo!, may be divided into multiple IDs. Every tag that a partner places on a publisher will embed a universal inventory ID, which AppNexus will monitor for compliance. See Universal Inventory API for information about integrating the full list into your application.
  • Partners can specify which advertisers and creatives can run on a tag. AppNexus translates this list into universal advertiser IDs. This information is stored into an ad approval profile, which bidders can use to make sure that bids will be accepted (only approved creatives and advertisers can win the auction).

A 10,000 Ft. View of an Ad Call

An Ad Call Is Received By the Impression Bus

At the ad call, the Impression Bus receives the AppNexus user id and fundamental page information from the AppNexus TinyTag and the user's AppNexus cookie. TinyTag is how a partner will manage all media buys with ease and how AppNexus will be able to create a universal way to identify inventory. And since TinyTag is stored server-side, once in place, you will never have to re-tag a publisher page again.

In addition to TinyTag, the Impression Bus will send your Bidder a Pixel Request. Pixel Request creates a simple way to synchronize your user ids and metadata with the AppNexus user ids and data.

With TinyTag and the Pixel Request, the Impression Bus will send your Bidder the appropriate user and page information. Your Bidder will receive this information either from your preexisting media buy or from another bidder's preexisting media buy.


An Impression That Is Part of Your Preexisting Media Buy

When an ad call from one of your TinyTags hits the Impression Bus, we send a bid request to your decisioning engine with all the necessary user and page information. Since it is inventory from your preexisting media buys, you have exclusive rights to it. If you decide the user is not low value to your client, your bid-response tells the impression bus that you are executing your exclusive right to this user. No other bidders see data on these users.

Bidding on Impressions At Auction


While you are selling your low value impressions on your preexisting media buys, you can also bid on any users that are up for auction. Use whatever decisioning you choose to select and price users of high value for your clients.

When a bidder chooses to sell an impression, his bid-response tells the impression bus a reserve price and a reserve creative. The reserve price tells the impression bus the minimum price that is acceptable for selling this user. In the event that there are no bidders who meet the minimum price, the reserve creative of the bidder will be served.

In the diagram below, Bidder = "Visa c/o YYY" decides that user 1234 is low value. He tells the impression bus to send the user to auction with a reserve price of $2.00. All bids received below $2.00 will be considered invalid. Bidder = "Mercedes c/o YYY" decides to not bid on this user and Bidder = "Adserver ZZZ" wins the user by bidding $2.37. As a final check, the impression bus will check that the universal advertiser id for the creative of "Adserver ZZZ" is an approved advertiser in the TinyTag for "Visa c/o YYY".

Auction Post Mortem

One of the main problems with working in a closed advertising ecosystems is that it is hard for bidders to understand why they won or lost an impression. If you bid $2.00 for a car-buyer on nytimes.com/autos and consistently lose, what action should you take? Are you being outbid by $0.05 or $5.00? If you are selling inventory, which user segments are driving your CPMs? This crucial information will be passed to your bidder via Notify Request.

Couple this with with full reporting and API support and you have all the tools you need to make informed and powerful decisions for your clients.

End Results

  • Optimize Delivery of Ads by Leveraging the Cloud Computing Environment
  • Manage All of Your Ad Tags in One Centralized and Simple Interface
  • Increase the Number of High Value Users for Your Clients While Decreasing the Number of Low Value Users.
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