Online ads (1)

How Online Ads Really Work

I'm a Senior Software Engineer at Unity, working on Tapjoy Offerwall, a ad solution for mobile games and apps. In this post, I want to demysify how online ads work, especially in the context of mobile games and app. It won't cover every detail but will give you a solid understanding of the ecosystem, the players involved, and how it all comes together. Plus, I won't explain Offerwall itself, but rather focus on the broader ad tech landscape that makes it possible.

Introduction: Ads Are Everywhere — But How Do They Work?

When you play games or browse the web, you see ads everywhere. I knew that ads are everywhere but I didn't know how they really work even though I have been working on the Ads team. This article is for those who want to understand the ad tech ecosystem. I will explain key actors, how they interact, and the techonology behind it with top-down approach. I wish you will get a better understanding of how online ads works after reading this post.

The Big Picture: Online Advertising Ecosystem

There are key players in the online advertising ecosystem that work together to deliver ads to users. Here's a high-level overview:

• Advertisers: Companies that want to promote their products or services.
• Publishers: Websites or apps that display ads to their users.
• Ad Networks: Middlemen that connect advertisers with publishers.
• DSPs (Demand Side Platforms): Tools that help advertisers buy ad space programmatically.
• SSPs (Supply Side Platforms): Tools that help publishers sell ad space programmatically.
• Ad Exchanges: Marketplaces where DSPs and SSPs transact.
• MMPs (Mobile Measurement Partners): Companies that track ad performance and user acquisition.

That's a lot of jargon, but don't worry. I'll break it down in the following sections. Before that, here's a high-level diagram of the ecosystem:

flowchart TD
  Advertisers -->|Create Ads| AdNetworks
  AdNetworks -->|Distribute Ads| Publishers
  Publishers -->|Show Ads| Users
  Advertisers -->|Buy Ad Space| DSPs
  DSPs -->|Bid on Inventory| AdExchanges
  AdExchanges -->|Sell Inventory| SSPs
  SSPs -->|Provide Ad Space| Publishers
  MMPs -->|Track Performance| Advertisers

sequenceDiagram
  participant Advertiser
  participant DSP
  participant AdExchange
  participant SSP
  participant Publisher
  Advertiser->>DSP: Submit Ad Campaign
  DSP->>AdExchange: Bid on Ad Space
  AdExchange->>SSP: Auction Ad Inventory
  SSP->>Publisher: Provide Ad Space
  Publisher->>User: Display Ad
  User->>Publisher: Interaction (e.g., click)
  Publisher->>SSP: Report Interaction
  SSP->>AdExchange: Update Metrics
  AdExchange->>DSP: Notify Results
  DSP->>Advertiser: Campaign Performance

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