Publishers (Supply Side of ad value chain)
Publishers create advertising inventory by providing an opportunity to serve advertisements on their web sites, mobile apps and video games. Publishers sell their ad inventory to advertisers, their agencies and ad networks and thus lie at supply side of ad value chain. Publishers get ad revenue for selling their advertisement inventory. In the most Example includes publishers like Google, Yahoo and Microsoft search engines which create huge amounts of ad inventory that gets sold directly to advertisers and agencies.
Ad Agency buys ad inventories on behalf of their client i.e advertisers. They plan media strategy on behalf of advertisers that will give maximum value to the advertiser.
Ad network purchases ad space/ad inventories from publishers and aggregates these ad space/ad inventories in order to sell to advertisers. Ad networks make money by buying ad inventory at lower price and selling these inventories at higher price.
Small publishers are unable to sell their inventory due to lack of sales team and big publishers are unable to get appropriate value for their inventories which have some times very low value. Thus, small publishers often sell their entire inventory through ad networks. Ad networks provide a platform to these publishers for selling their inventories. Similarly large publishers often sell their remnant inventory through ad networks. Example – Google Adsense
Advertisers need to put advertisement for their products on various digital platforms. They put advertisements for brand marketing (raising general awareness) and direct response marketing (getting someone to actually buy something online now). Advertisers sell their advertisement to publishers and ad networks. Example in this case is Ad words which is the advertiser-facing side of the AdSense network.
Ad networks use a central ad server to deliver ads to consumers and also enables targeting, tracking and reporting of ad impressions.