Google Ad Manager is the ad server most large publishers use, it costs nothing below a very high impression volume, and it will do anything you ask of it. It is also the wrong tool for most people running one site with two sponsors.
What GAM is actually for
GAM's core job is mediation: deciding, for each impression, whether to serve a directly-sold campaign, a programmatic bid, or a house ad — and doing that across dozens of demand sources competing in real time.
If you have direct sales and programmatic demand and multiple exchanges bidding, that arbitration is a genuinely hard problem and GAM solves it well.
If you have two sponsors and a house ad, there is nothing to arbitrate.
The cost is not the licence
GAM is free to use at the volumes a small publisher will ever reach. The cost is elsewhere:
Concept overhead. Ad units, placements, key-values, line items, orders, creatives, labels, and the relationships between them. Booking one banner for one month means creating an order, a line item, a creative, and a targeting rule.
Setup time. Expect a day to get your first ad serving properly, and a while longer before you trust the reports.
Google account entanglement. Your ad serving becomes dependent on a Google account and its policies. Accounts do occasionally get restricted, and the appeal process is not built around publishers your size.
Reporting aimed at someone else. GAM's reports are excellent and assume you are an ad ops professional. Getting "how did this sponsor's flight do" out of it takes more clicks than it should.
Where GAM clearly wins
You run programmatic. If AdSense, Ad Exchange or header bidding are part of your revenue, GAM is the right home for it and nothing else competes.
You need real yield management. Serving a direct campaign at $8 CPM only when the programmatic bid comes in below it is exactly what GAM does.
Complex targeting. Section, keyword, custom key-values, audience segments — GAM handles arbitrary combinations.
Very high volume. GAM scales past anything you will build or buy.
Where it does not
Direct-sold only, a handful of sponsors. The arbitration engine is idle and you are paying its complexity cost for nothing.
You want the sponsor to see their own numbers. GAM has no good story for handing a small advertiser a live report link. You end up exporting and emailing spreadsheets.
You want conversions attributed. GAM tracks clicks well; connecting a click to a sale on the sponsor's site is not something it does simply.
You are not going to learn it. An ad server you avoid opening is worse than a simpler one you use.
The honest comparison
For a site with two to five direct sponsors, a simple ad server does the same job with roughly a tenth of the concepts — and typically does the two things you actually care about better: a report link you can send a sponsor, and conversion attribution after the click.
For a site with programmatic demand, GAM is not really optional.
Running both
This is common and works. GAM handles the programmatic inventory. A simpler server handles the directly-sold slots, where you want clean sponsor reporting and fast booking.
The slots are separate, so nothing needs to arbitrate between them, and each tool does the thing it is good at.
The question to ask
Not "which is more powerful" — GAM is, comfortably. Ask: do I have competing demand sources that need arbitrating?
If yes, use GAM. If no, its central feature is doing nothing for you, and everything else about it is complexity you are absorbing for free.