Overview of the Online Advertising Industry
Overview of the Online Advertising Industry 1. Essential Actors: Advertisers, Publishers, and Users Online advertising is, in basic terms, a process in which an advertiser pays a publisher to present an ad to a user on the publisher’s property (usually a website or an app). Thus, there are three essential actors in online advertising (in alphabetical order): the advertiser , who wishes to draw the user’s interest to the advertiser’s offerings; the publisher , who has some space to show ads and would like to “monetize the user” by selling those ad spaces to the advertiser; the user , who is primarily interested in the publisher’s offering (e.g., the content of a news website) and is sometimes also interested in the ads displayed on the site. Figure 1 outlines the business models of advertisers and publishers; the exchanges that occur among advertisers, publishers, and users; and the (often implicit) agreements among them. Figure 1: Interplay among the Essential Ac...