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Feature

The ad server, 20 years on

03 August 2015
The ad server, 20 years on

In July 1995, FocaLink Media Services launched the world’s first central ad server. It was designed to place ads on websites, refresh them when users reloaded the site and report back on the progress of how many times the ad was seen.

Today, the usage of heavy-duty ad servers far outweighs the original software’s reason for being – existing not only as the pipes used to serve digital advertising but rather as a tool for measurement and optimisation of digital ad spend. Now, ad servers like Google’s DoubleClick help advertisers make more consistent decisions about each user at impression level, rather than just website level.

With last month marking the first ad server’s 20th anniversary, we asked cross-device technology company Drawbridge and real-time advertising and audience measurement specialist Quantcast how dramatically things have changed – and what we can expect in the future.

Devin Guan, CTO, Drawbridge (pictured above)

The single biggest change in ad serving, from my perspective, has to be the proliferation of devices, especially mobile devices. Think back 20 years, to when the first ad server was born, and there was just one device to worry about – the desktop computer. To add context, back in 1995, Google was still three years away from being in the public eye.

Even four or five years ago, mobile advertising was in its relative infancy. To put things in perspective, only 304.7 million smartphones shipped in 2010, and Apple sold just more than 32 million iPads that year. By contrast, this year 1.4 billion smartphones and 233 million tablets will ship worldwide. The incredible number of devices operating today only serves to emphasise the dramatic change in consumer behaviour that has taken place.

Today, the average British household owns 7.4 internet-connected devices, which has led to an exponential increase in the availability of data on the digital consumer. As this pile of data has grown, the overlap of users on desktop and mobile devices has become more prevalent, and algorithms have become smarter as a result.

Employed correctly, more data can mean a greater ability to detect patterns and trends – resulting in more precise solutions and in turn enabling better targeting and attribution of marketing spend for marketers. All this leads to a more consistent user experience across devices for the end user.

The technology has evolved from being capable of interpreting maybe a dozen signals per person three years ago to hundreds today. Our own bidder, for example, receives over 40 billion ad requests each day (that’s around 500,000 per second–or 1000x the queries per second of the NASDAQ stock exchange). Each request requires a series of decisions to be made in a fraction of a second.

The predictive capabilities of ad servers have also evolved far beyond anything anybody could have dreamed of 20 years ago. Today’s machine-learning technology is capable of building complete portraits of consumers, beyond just their devices, to include predictions of age, gender, and even consumer habits.

These data points are incredibly valuable to marketers when modelling their audience and prospecting for increased business that behaves in a similar way. Today we can deliver personalised ads based on comprehensive understandings of consumers. Before we could only rely on contextual information.

As a result, the ad servers of today need to be able to serve relevant, personalised ads across multiple disparate devices – and that’s before bearing in mind capabilities such as frequency-capping and ad sequencing.

In the next five years the landscape will only become more complex, starting with the addition of connected TVs, smartwatches, connected cars, and the connected home. Before long, ad servers will need to handle requests from Sainsbury’s to show an advert for milk on a customer’s fridge, or for detergent from Persil on their washing machine.

Twenty years ago, it would have been almost impossible for marketers to predict how drastically technology would change their jobs, and the same must be said for the next 20. While we think wearable tech will eventually see mass adoption and the internet of things will infiltrate the entire home environment, there may also be something none of us saw coming.

Matt White, UK managing director, Quantcast

To think it’s been twenty years since the ad server was invented is mind-boggling. I remember when it was first introduced; it drove a huge change in the world of advertising.

For the first time advertisers could serve ads at an individual and personal level across multiple publishers. The way in which media was bought changed, bringing efficiency and relevancy to the media buying approach and how inventory was packaged, reducing the reams of paperwork between agencies and publishers. Advertisers embraced the emerging online display advertising channel, quickly capitalising on the change and digital opportunity.

So what drove this change? Technology. In 1995, consumers had access to a vast amount of information at their fingertips and were spending increasing amounts of time online. In tandem the volume of ad impressions exploded to millions; breaking the boundaries of traditional media. There was quickly a need for technology to help publishers package audiences and sell them to advertiser. This led to the development of the first ad server by FocaLink Media Services.

Technology quickly enabled advertisers to set parameters for a campaign that dictated which ad appeared where, how frequently and for how long, then reported back on clicks and impressions. It wasn’t a popular idea at first. In an interview with the Internet History Podcast last year, FocaLink Media Services Founder Dave Zinman recalls the head of Saatchi & Saatchi in New York telling him ‘I was kind of hoping this would happen after I retired’ – a popular attitude that proved to be a barrier to getting large-scale buy-in from agencies.

As the Internet gained popularity, and consumers became more confident buying goods online, the shift to tracking and measuring online advertising to the point of conversion emerged. Display advertising was no longer perceived successful based on a click metric. In the height of the dotcom boom, the ecommerce market exploded and, advertisers gained access to a host of data about who they were targeting – such as consumer’s demographic data, as well as previous site visits and interests.

As this continued and publisher websites became increasingly sophisticated, advertising technology offered brands hyper-targeted campaigns and greater insight into how their online campaigns were performing. Being able to see if a click led to a conversion was once exciting, now we’re able to employ a variety of tactics to understand the entire path to conversion and the correlation between every tactic, at each stage of the funnel and how they contribute to campaign ROI - all in real-time.

Technology has changed how consumers interact and consume media. We’re in an era of the always-on consumer; media consumption habits are maturing rapidly, driven primarily by new and emerging technologies such as the Internet of Things.

Today, multi-screening consumers are much more comfortable with the Internet and we see the level of targeting and accountability enter the world of traditional media. With the rapid adoption of programmatic trading, the vast amount of first-party data and the rise of the IoT, the ad server as we know it no longer exists.

As we advertise across more channels from people’s computers and televisions to their wrists and glasses, the ad server is getting smarter to keep up. Change isn’t coming, it’s already here.

M&M Global staff, London

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