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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 participant represents a business entity that owns or buys media. In the case of a traditional agency, the participant 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 participant would be the ad network itself.
  • Each participant 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 participant that provides inventory (via a TinyTag) has exclusivity rights on that inventory. This participant 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 participant's 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 participant 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.
  • Participants 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 or PriceCheck tag and the user's AppNexus cookie. Either AppNexus tag 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 and PriceCheck tags are 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.

The Imp Bus Holds An Auction

When an ad call from one of the AppNexus tags hits the Impression Bus, we review the content and send a bid request to the various bidders on the AppNexus cloud.  The bid request will include the content categorization, page information, user information, and in certain cases a reserve price and reserve creative. 

Bidding on Impressions At Auction

Data providers integrated on our cloud recognize the user id and can input any information they may have on that specific id and will pass the user data to bidders that have the rights that information.  The bidders then evaluate the ad call on behalf of their buyers and return a bid value to the imp bus. 

Serving the Impression

The impression is served in one of these ways:

Find Highest Bid and Serve Immediately: The AppNexus Imp Bus determines highest bidder and will serve the winning bidder's creative as dictated in the bidder response.

Highest Bid Wins if Beat Reserve Price: If a reserve price is passed via the AppNexus ad tag, the Imp Bus passes this price as well as the other ad call information to all bidders.  Bidders respond with a bid value and creative id and the highest bid that beats the reserve price will serve it's creative.  If no bid beats the reserve price, the Imp Bus will pass the ad call on to a 3rd party system.

 Price Check - Send Highest Bid to 3rd Party:  The ad call is directed to the AppNexus Imp Bus to get first glance in order to perform a price check.  The Imp Bus holds an auction among its bidders and passes the highest bid onto another 3rd party's system to decide how to fill the ad call.  Only if the highest bid in AppNexus is chosen as winner the ad call is passed back to AppNexus where the Imp Bus will serve the winning bidder's creative.

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 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.
  • Brand control and quality.
  • Guaranteed range of CPMs for sellers.
  • Independence platform allowing deep integration with technologies, optimization engines, and bidders.
  • Increase the Number of High Value Users for Your Clients While Decreasing the Number of Low Value Users.
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