Adtech.

What Is Adtech?

Advertising technology, better known as adtech, refers to the broad category of tools and software that assist brands in focusing, sharing and measuring digital campaigns. Some of the biggest names in publishing and advertising rely on adtech to inform their decisions on who to target, how to present information and how to track campaign success. 

The advertising industry has been eager to adopt adtech because of the competitive advantages it provides. Adtech enables brands to track their customers’ online behaviors, delivering insights into the interests and preferred online formats of their audiences. Teams can then shape their advertising content around a customer profile while leveraging software and platforms to quickly produce and spread content across multiple channels.   

Streamlining the research and content development stages has saved advertising teams valuable resources. This kind of efficiency makes all the difference in an industry where customers prefer timely and customized messaging.

While every audience and campaign is unique, there are common components and strategies that go into an adtech-driven approach. Below are just a few subtypes of adtech that often contribute to the success of digital campaigns.  

Customer Data Platform

A customer data platform is a centralized location where a company can find all customer data points. The software compiles first-party data from interactions between a company and customer, whether through social posts, emails or website pages. It then organizes the data into a customer profile, which can inform decisions on what ad content and media formats to use when reaching out to a specific customer. 

Data Management Platform

While similar to a customer data platform, a data management platform is more suited for collecting third-party data on larger audiences. The platform stores large sets of data that it can organize into anonymized audience segments. Brands may find this information most useful when they want to target more general demographic groups, as opposed to smaller groups or individual users. 

Demand-Side and Supply-Side Platforms

Advertisers need to purchase ad space from media organizations. Media organizations need a place to sell their open inventory. Demand-side platforms (DSP) allow advertisers to bid on open ad slots on a per impression basis. Supply-side platforms (SSP) allow sellers to list their inventory on a multitude of exchanges in an automated and efficient manner.

Ad Exchange

Brands looking to buy or sell advertising spaces go to an ad exchange, which serves as a marketplace for DSPs and SSPs. Ad exchanges often take the form of a real-time auction, allowing businesses to buy and sell ad space quickly. Any kind of ad space is available through an ad exchange, ranging from written content to video advertising. 

Search Engine Marketing Platforms

Search engines, like Google, allow for advertisers to purchase ad space for certain keywords that they think will draw in new customers. For instance, a plumbing company might use their advertisement budget to place their ads in the search results for “leaky faucet” or a restaurant in New York City might want to purchase ad space for a term like “best restaurants NYC.” The ability to gain search exposure helps brands drive awareness and find more potential customers.

Ad Forecasting Software

Instead of arbitrarily throwing money at expensive ad space, teams can now accurately and efficiently budget for ad buying. Ad forecasting software allows companies to gain insights into consumer media consumption habits and approximate costs of ad space. They then optimize for company goals in order to stretch the company’s dollar further and more efficiently.

Programmatic Ads

When it comes to buying ad space, companies don’t want to waste choosing a time slot and hoping that the right people see their content. Programmatic ads center around certain audiences based on demographics, so brands are guaranteed to reach audience segments that fit their customer profile. Companies can purchase and sell these ads through DSPs and SSPs.  

Ad Servers

Ad servers decide which ads to promote on a website and then send the appropriate ads to the site. This tool also sends back reports on the performance of each ad, so teams can make adjustments the next time they serve an ad to a site. The automated nature of ad servers speeds up ad distribution and takes the weight of content management off of a team’s shoulders.  

Adtech vs Martech

While adtech often gets confused with martech (marketing technology), it’s important to note that the two are very different. Adtech uses paid media to target audiences who haven’t interacted with a brand before. Martech depends on unpaid media, such as social media posts, to reach audiences who are already familiar with the brand. 

The two disciplines also apply separate technologies for achieving their goals. Adtech includes SSPs and DSPs to facilitate the buying and selling of ad slots. Meanwhile, martech might involve a customer relationship management (CRM) platform to help a marketing team keep track of their current customers. 

These disciplines cover varying scopes and purposes. It’s no surprise then that each features a unique ecosystem with its own set of major players and popular technologies.

Adtech Fields and Companies

The adtech ecosystem consists of many players, including big-name tech companies, creative agencies and media startups. While there are countless moving pieces to keep track of, the industry can be broken down into several main categories.  

Publishers

Publishers are the producers of creative content that serve as ad spaces and own those ad spaces. Traditional formats include magazines like The Atlantic. However, digital formats have led to even more diverse options. Podcast companies like Spotify and video content companies like YouTube and Vimeo all provide crucial spaces for brands to place their ads. 

Advertisers

Advertisers are the entities that buy and sell advertising spaces. While this category includes anyone who is trying to showcase a product or service, consumers may be more familiar with bigger brands in this group. Google, Meta and Amazon are more common examples of companies that have bought sizable chunks of ad space. 

Ad Agencies

Ad agencies work with companies to plan advertisements and see them through to completion. Coordinating an ad strategy, developing creative elements and distributing ads are all duties that ad agencies oversee in addition to general marketing services. Some of the more globally renowned ad agencies include Dentsu, BBDO and Publicis Groupe.   

Ad Networks

Ad networks compile unsold ads from various publishers and sell those ads to advertisers, often organizing similar ads together to be sold as bundles. These groups often display business relationships with publishers and serve as a crucial bridge between publishers and advertisers. Examples include Google Adsense, Amazon Affiliates and Adcash.  

Adtech Companies

Adtech companies come up with tech-based solutions to address the various challenges within the adtech ecosystem. From creating high-quality software platforms to ensuring faster transactions between publishers and advertisers, adtech companies constantly find ways to improve processes. VideoAmp, Integrate and Postclick are examples of adtech companies. 

Adtech Technologies in a Company Tech Stack

To navigate and thrive within the adtech ecosystem, companies need to round out their tech stacks with all the necessary tools. The most successful businesses within the adtech sphere equip themselves with the technologies to compile data, buy ad space, produce content and distribute their content to those ad spaces. 

Gathering Data

Before creating ads, companies collect customer data to inform the type of content they make and where they distribute that content. Companies need to determine the size of their target audience before deciding whether a CDP or DMP is right for them.  

Selecting Ad Space

Data produces insights that lead companies to pursue specific digital ad spaces. The fastest way to buy and sell ads is by accessing an ad exchange through a DSP or SSP. However, companies can narrow their focus through programmatic ads and SEM platforms. The ultimate goal for a company is to target the mediums and social channels most frequented by its target audience. 

Producing Content 

After the ad space is chosen, advertising teams select the appropriate content types. For example, a video ad may be more appropriate for an ad on YouTube while succinctly written content may suffice for an ad on Facebook. Businesses should choose a content application or platform that works for them to prepare ads for a variety of digital formats and platforms. 

Distributing Content

Once these stages are finalized, companies distribute content to an ad space. Teams can perform this process manually, but businesses often choose to streamline steps with an ad server. Automation greatly reduces the time spent on sharing ads across multiple channels, allowing teams to allocate their resources elsewhere. 

Adtech Market Size

Advertising has proven to be a promising sector for many businesses, and the industry shows no signs of slowing down. Adtech reached a valuation of $438 billion in 2021, and it’s expected to experience a compound annual growth rate of nine percent from 2021 to 2030. 

However, not everyone will reap the rewards of the thriving adtech sector. According to Axios, the five largest tech companies in the world own 53 percent of global ad revenues, and 25 companies are responsible for almost 75 percent of all global ad spending. Brands like Meta, Amazon and Google are likely to continue to flex a strong grip on the industry.  

While there’s plenty of upside to adtech, those who own huge chunks of the sector’s resources are set to benefit the most from advertising’s rising influence. 

Types of Adtech and Examples

The expansion of media has left adtech companies with more ways than ever to reach out to audiences. At the same time, it’s easy to get caught up in adtech types while forgetting about the purpose of a company’s adtech strategy. 

Whether it’s attracting the attention of potential customers or maintaining contact with loyal buyers, different adtech formats are designed for varying situations. Businesses should define their goals for their adtech and pick a type that helps them best meet those goals. 

Online Adtech

Online adtech refers to advertisements placed on websites. Web ads are designed to catch the eye of consumers when they’re already searching for a related product or service. For example, IBM may find a technology-related article in The Atlantic and then buy out ad space on the article page, encouraging readers to learn more about its solutions in a related tech field. 

Mobile Adtech

Besides mobile-friendly sites and apps, mobile adtech also encompasses SMS messages. If a team is trying to reach prospective customers, it may decide to buy ad space on sites and apps that its target audience frequents. But a company wanting to offer deals to current customers may choose SMS messages as a convenient way to spread the word. Start.io and AppLovin have established themselves as key players in this niche.

Email Adtech

Email has been around a while, but it’s still a useful medium for reaching both prospective and current customers. Email marketing platforms allow advertisers to track metrics like the number of people who open an email and which links they click on, providing insights into how to improve their content. Mailchimp and eBay are examples of adtech companies that have fine-tuned the email marketing process.  

Social Media Adtech

Social media ads are how some brands may choose to get their names out to new audience members. Companies can leverage customer data to home in on specific demographics, selecting the social media channels most popular among target audience members. Facebook Ads and LinkedIn Ads are examples of social media adtech, where businesses pay to place ads on platforms and measure the number of clicks each ad receives. 

Broadcast and Podcast Adtech

Media has come to include more audial formats in addition to visual formats, and companies are exploiting both older and newer mediums. While TV and radio station ads are commonplace, podcast adtech is gaining in popularity. Spotify and Pandora are two of the most renowned names in the podcast sector, offering breaks in between shows and playlists for companies to buy ad space. Company leaders can also agree to go on podcasts as a way to spread their brand.