How Google’s Ad Ecosystem Works

Advertisers.(Bloomberg Businessweek) -- If a dog food company wants to advertise a new treat online, it hires a creative agency to design an ad. That ad goes to the digital-ad ecosystem, a bewildering array of buyer and seller platforms that manage ad-space inventory, auction off space, and track responses. Google is a major player almost every step of the way..Ad server.The ad is loaded onto a server, where it sits until the advertiser and publishers have agreed on price and placement. Google Campaign Manager competes with Innovid Inc. and Amazon.com Inc.’s Sizmek, among others..Demand-side platform (DSP).This is what an advertiser uses to see the available ad space and decide what it wants to buy. Google Display & Video 360 compete with Amazon Advertising, Trade Desk Inc., and MediaMath Inc. But if advertisers want access to YouTube, in most cases they have to use the Google DSP..Publisher-side ad server.Here, websites including newspapers upload available ad space so the dog food company can bid on it. Once the sides agree on terms, the ad server sends the ad to the publisher’s website. Google Ad Manager’s share of this business—estimated as high as 80%—dwarfs that of Smart AdServer SAS and AppNexus Inc..Publisher.The ads are uploaded in real time as viewers open a website..Analytics.Websites can use analytical services to see who is visiting their sites and from which sources. Google Analytics is the largest of these providers, which also include Adobe Inc. and Oracle Corp..So, is Google too big?.Google has steadily bought up ad-tech companies over the years, making it the dominant force in the $330 billion digital-ad market. Much smaller industry rivals also seem to be growing. Trade Desk stock is up 68% so far this year. Still, almost every ad flying through the online ad ecosystem touches Google in some way. The company also owns vast amounts of advertising space through its display network, YouTube, and search results. Critics say requiring advertisers to go through Google’s ad-tech to access YouTube is anticompetitive, and regulators are investigating. Google says other video ad-space owners, such as AT&T Inc., have similar requirements. Read more: Google’s $2.6 Billion Looker Deal Said to Get Closer DOJ Review.To contact the editor responsible for this story: Dimitra Kessenides at dkessenides1@bloomberg.net, Paula Dwyer.©2019 Bloomberg L.P.

How Google’s Ad Ecosystem Works

Once the sides agree on terms, the ad server sends the ad to the publisher’s website.

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