Consider Building an Advertising Waterfall

If you're running a small site, such as a personal blog, and just want to throw in some ads to earn a few extra bucks from your regular traffic, then you really don't need much more than Google AdSense as your provider. But if you're looking to build a career by selling ads on your site, you're going to want some non-Google providers that will pay you higher rates. However, those other providers, individually, might not always be able to fill all of your inventory (your inventory, in this case, is the space on your site that you've made available for ads to be placed). There's also no guarantee that any of these networks will choose to present ads to all of your traffic.

This might be a good time to break away and explain how the online advertising process actually works, behind the scenes. It's really pretty simple, and perhaps best explained through an example. Suppose Simon, a standard Web user, finds his way to your site one night. When he arrives, your site sends a message to the ad network you're working with and makes a request for an ad. The ad network looks at the request (checks out where Simon is from based on his IP address, how he found his way to the site, and other variables), and at all of the ads in its portfolio (the network has ads from numerous brands that have asked it to place their ads on various sites to target demographics), and decides whether it has an ad available to show to Simon. In this instance, for one reason or another, the network decides that it doesn't have an ad to show, so it simply doesn't show anything at all, leaving a blank space in your site where the ad should be or a public service announcement, for which you won't get paid. A bit later, Sadie, another Web user, finds her way to your site. This time, the ad network decides that it does have an ad to show, and places the ad on your site. In each case, these requests and decisions happen in fractions of a second.

Obviously, there's a bit more to it than that, but trust me, unless you're a programmer, you really don't want to know the technical details. They're long, boring and confusing. So, in the Simon and Sadie example, your site had two visitors, one of whom saw an ad and one of whom didn't, meaning that only 50% of your traffic was monetized. To combat this, you want to create what's called an “advertising waterfall.” Basically what this means is that you have multiple ad networks signed up to provide ads to your site so that if one doesn't have an ad to place, another one might. So let's say that Simon (who didn't see an ad when he first visited your site) comes back to your site. This time, instead of speaking directly to one particular ad network, your site talks to an ad server. The ad server sends the request to the ad network at the top of the waterfall (usually the one that pays the highest rate). If that ad network says no, it passes the request back to the ad server (appropriately called a “passback”), which makes the request to the next network in the waterfall. If that one says no, the request is made to the third network, and so on down the line. You should be able to strike a deal with an ad network that can be placed at the bottom of the waterfall that's willing to take all the ad opportunities that nobody else wants at very low rates.


Ideally, this all happens in fractions of a second, but technology is never perfect. The more ad networks you have in your waterfall, the more opportunities you'll have to show an ad, but the longer it might take for the ad to show up.

There are ad servers that handle video-based ads and ad servers that handle display ads—and some that can handle both. Of course, you could always build your own ad sever, but there's really no need to when so many high-quality ones are on the market that will allow you to build and manage your waterfall. Some of the ad servers you can choose from include the following:

These companies charge you a certain price for every thousand ads that you show. You'll typically need to guarantee minimums, but if you have a lot of traffic and want to make a living from monetizing your content with ads, then the cost of the ad server could be well worth it.

(MLA 8th Edition)