Below is a comprehensive guide about What is Ad Tech, ad tech basics and details on how they benefit both publishers and advertisers.

 It is estimated that ad tech industries are set to grow from $438bn in 2021 to $1 trillion in 2030, forecasts GlobalData, a leading data and analytics company

While Ad tech industry is growing rapidly, many young ad agencies, publishers, and content creators are still trying to figure out what exactly ad tech is – and how they can best use it to their benefit.

In this article, we’ll deep dive into what is ad tech and how ad tech works for publishers and advertisers:

What is Ad Tech?

Ad tech or advertising technology is an umbrella term for the tools and software that help brands target, deliver, and analyze their digital advertising efforts.

 

It eliminates the need for publishers and advertisers to be present physically for the ad bidding by employing digital tools such as programmatic advertising, DSP, SSP, Ad servers, ad inventory and so on.

 

Not only does ad tech streamline the execution of ad campaigns, but it also optimises the websites (including user experience and ad strategies) for maximising ROIs.

Fundamentals of Ad Tech:

Advertising technology includes various digital tools to make selling and buying of ads easier, of which the most important is programmatic advertising. 

 

While Ad tech industry is growing rapidly, many young ad agencies, publishers, and content creators are still trying to figure out what exactly ad tech is – and how they can best use it to their benefit.

The ad tech companies are in charge of:

•  managing the digital advertising
•  keeping track of CTRs
• Designing ad campaigns as per the trends and demands
• Executing the ad strategies
• Analysing performance and making improvements

What is Programmatic Advertising in Ad Tech?

As the name suggests, programmatic advertising, also referred to as the programmatic display, is a set of algorithms that automatically purchases and sells digital ad inventory.

It manages a range of functions, from setting the floor price and designing ad format to generating reports on performance and creating a bidding proposal to facilitate real-time bidding (RTB). It eliminates the need for any middleman or ad fraud as the whole processing is automated.

 

Benefits of programmatic advertising:

• Elimination of manual selling and buying of ads
• Automated processing makes buying or selling fast and efficient
• Easy segmentation of the audience is beneficial in targeting and retargeting
• Access to a wide range of suppliers and advertisers 
• Access to comprehensive performance reports 

 

It is imperative to note that RTB is not the only programmatic advertising tool. To know more, click here!

Ad Tech vs. MarTech: The Difference

Adtech, a buzzword in the digital world, is a term that surrounds the technologies like ad networks, ad exchanges, ad servers, header bidding and so on, all focused on optimising ad revenue and ad delivery for better website viewability and brand recognition. It also acts as a weapon against digital media world challenges of privacy, ad fraud and ad block.

Ad tech companies reach customers via paid channels utilising user insights.

 

Martech or marketing technology is the strong contender that reaches the audience using unpaid channels or the brand’s first-party data. Its main aim is the smooth execution of marketing strategies to manage marketing campaigns through emails and social media accounts. 

 

Read the impact of martech in the digital industry!

How does Ad Tech work for advertisers and publishers?

Ad tech includes various technologies to assist advertisers, media agencies, and publishers successfully running advertising campaigns. It includes:

 

1. DSP: demand-side platforms:

Demand side platforms are usually designed for advertisers to bid on ad space or inventory available on the websites of a variety of publishers. It programmatically connects the advertiser to the right kind of users at the right time by placing their ads on the websites, which will drive massive traffic or the highest impressions.

 

It deploys real-time bidding technology and can provide advertisers access to the integrated inventory of publishers. It is essential for DSPs to know which channel to focus on; it can be mobile or desktop. 

 

To know how to evaluate DSP, read this!

 

2. SSP: supply side platforms:

Simultaneously working with DSPs are supply-side platforms, also known as sell-side or yield optimisation platforms. Publishers use these platforms to offer up the ad inventory to the advertisers and ad networks at the highest possible bid for an ad impression.

 

It follows the simple fundamentals of economics of demand and supply; whereas demand for ad space increases, the value of suppliers’ or publishers’ ad inventory also increases.

 

Note: DSP and SSP work simultaneously without any intrusion of intermediary, further reducing the cost and the risk of ad fraud. DSP allows advertisers to assess the ad inventory of suppliers or publishers to bid on the digital real estate offered by publishers for the lowest price, while SSP connects the publishers to advertisers with the highest bid. 

 

 

Read more: Top supply side networks

 

3. Ad exchange: 

Apart from the Demand side and supply side platforms, the vestibule between publishers and advertisers is ad exchange which facilitates the easy and real-time ad space auction. 

Types of ad exchange:

Ad exchange can be bifurcated into two different categories:

 

• Open ad exchange:

The open ad exchange is a platform that is open to all sellers and buyers.

 

• Private ad exchange:

The private ad exchange is a marketplace which requires invites for selected buyers and sellers who connect for the private programmatic auctions.

 

Note: Ad exchange is not to be confused with an ad network. Contrary to the ad network that connects the advertisers to various websites for fixed-price ad space, ad exchange determines the price in real-time bidding.

 

4. Ad server technology:

Besides the major players (DSP, SSP), another one in the world of advertising is ad server technology which is a reservoir of ad creatives using particular software to place ads on websites as and when required.

 

With its ability to optimise the ads post analysing the massive amount of data collected from first parties and third parties, it displays ads as per the user’s relevance.

 

The publishers and advertisers filter the ads served based on the target audience, ad format, and demographic attributes. Ad servers also keep account of the frequency of the ad shown to the particular user.

 

There are two types of ad servers used both by publishers and advertisers. Publishers employ first-party data ad servers while advertisers use third-party ad servers. 

 

How does it work?

1. The first step is always landing on the website. While the website loads, the ad tags start loading as well.
2. A user’s visit to a website enables an ad publisher’s server to analyse user data and immediately send the ad request to publishers.
3. This process is followed by an ad server sending requests to ad exchange which connects the buyers to bid for ad space relevant to users.
4. Since the ad server measures the frequency of the ad displayed, if the particular ad is displayed too many times, it runs the risk of being turned down.
5. The buyers’ requests are processed in less than a blink’s time, and the selection of the best bid takes place. 
6. Finally, after the fetching of ad creative, it is downloaded onto the website. 

 

Note: This process is performed in under one second to register high viewability.

 

5. Ad networks:

Another most used technology is an ad network. It is a system that integrates ad inventories of suppliers or publishers to be offered to match the buyer’s demand.

 

Ad networks act as intermediaries between the demand side and supply side platforms. Ad networks make the monetary negotiations less cumbersome as prices for the inventory are mostly decided. Also, it helps in managing the ad campaigns executed by the advertisers.

 

6. Agency trade desk:

ATD is software including services related to media planning and buying provided by the media agencies. Working in hand with DSPs, ATD provides assistance to advertisers bidding and ad space purchase. It typically employs a team of software developers, data analysts and account managers on behalf of clients.

 

7. Content delivery network:

Content delivery networks are the around-the-corner copy ad servers that transfer ads from one place to other to provide higher availability and performance to end-users. These networks are distributed geographically. In other words, they provide content from locations nearby to the user to reduce the bandwidth time, accelerate performance, and give users a better user experience, further reducing site abandonment.

To know how they benefit the publishers, read this! 

Ad tech industry trends:

2002 is marked by significant changes, followed by even more extensive modifications introduced in the digital advertising industry.

 

With many technologies such as third-party cookies becoming obsolete or phased out, the emerging shifts will change how the content on mobiles and tv audio video is consumed. Below are the five game-changing trends to be witnessed around 2023:

 

1. Virtual and augmented reality:

What before was fantasy is now in its infancy. Virtual reality and augmented reality are the most awaited technologies rendering marketers even more imaginative and creating an interactive experience to acquire and engage users worldwide. These technologies can advertise a product by providing a virtual hotel tour before booking or to real estate for property showcases.

Although still in its evolution stage in India, these technologies have been successfully incorporated by brands such as TOMS shoes, Oreo, and IKEA for marketing their products.

2. Substitute targeting solutions:

Publishers have to brainstorm ways to track customers in the cookieless digital world. This has already shifted publishers to contextual targeting and analysing more first-party data, considering the users’ privacy concerns. 

• Geotargeting:

Also called Out of home targeting, advertisers and publishers use programmatic geolocation signals to connect with users online and offline.

• Vernacularism:

With the proliferation of internet users and the emergence of multiple websites, providing content in the user’s mother tongue has improved the response rate and maximised user traffic.

3. Integrated consumer journeys:

Keeping track of customers’ every move renders advertisers to provide more personalised content. Ad technologies have now evolved to integrate consumers’ journeys both online and offline, to drive user interactions with the right content at the right time.

4. The emergence of programmatic audio and video marketing:

This is the era of Instagram reels, TikTok and short youtube videos. With its ability to capture user attention and higher user interactions, video marketing makes for a promising technology to be incorporated by advertisers and publishers. Another powerful advertising medium can be mobile audio marketing, which results in higher targeting. 

5. Ingame mobile advertising:

According to Adjust data insights, gaming accounts for 50% of total industry ad spend. With rising games in recent years and the number of gamers jumping to 3.24 billion, it is no surprise that these ad spaces have been morphed into effective advertising platforms. To exemplify:

Trackmania Multiplayer Session World Premiere @Gamevention #DIGI1 2020 

How to Choose the Right Ad Tech Solution for Your Business?

The right stack is imperative for publishers and advertisers to monetise their websites and increase brand recognition.

 

•  If you’re a publisher:

1.  SSP: built explicitly for publishers, SSP is an important technology to eliminate the hassle of finding buyers for the ad space.

2. Ad server: The ad server can facilitate the publishers to instantly serve ads to fill the purchased ad spots and manage multiple demand users. This further reduces the page loading time.

 

• If you’re an advertiser :

1. DSP: DSP offers advertisers the ability to assess the publishers’ ad inventory and purchase a spot that will give them high ad viewability. With its real-time bidding technology, advertisers can connect with multiple suppliers at once and get the ad space for as low a cost as possible.

2. Ad server: An ad server is especially beneficial for agencies and advertisers if they directly connect with publishers and their websites. The instant ad can be displayed on the website, enhancing brand interaction.

3. CDP:  An alternative to DMP, content delivery platforms are the proxy ad servers that analyse the users’ data(geographical attributes especially) when any user logs in to the website and serves the ad from the reservoir of content creatives relevant to the user. 

Ad tech: Key takeaways

• Ad tech companies allow for successful management and optimisation of advertising campaigns.

• Ad tech basics include ad networks, ad exchanges, demand and supply platforms, and ad servers which form the core of ad tech industries.

• Programmatic advertising is the automated form of advertising that facilitates ad inventory’s sale and purchase.

• An ad server is especially beneficial for agencies and advertisers if they directly connect with publishers and their websites.

 

AdTech FAQs

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