At first glance, Adtech might seem like little more than just another meaningless tech word. But adtech, or “Advertising Technologies” have had a tremendous impact on the way companies promote their products and reach out to customers.
Adtech resonates with the new challenges born from the rise of online advertising. These technologies offer never seen before opportunities for businesses. They meet the new expectations of customers, whose buying behaviours have adapted to rapid technological advances.
What does atech mean exactly? What are the technological breakthroughs associated with the adtech ecosystem? This article will tell you how adtech can reinvent advertising as we know it.
What does adtech mean?
Adtech is an umbrella term which refers to the ensemble of technologies, strategies and actors related to online advertising. It is closely associated with martech, meaning all the technologies related to marketing at large.
Why you should know about adtech
The rise of online advertising can be seen as the answer to new emerging challenges. Today, traditional marketing can’t provide adequate answers to changing customer habits. Marketing channels have multiplied and evolved. Businesses have had to rethink the way they communicate with customers.
With adtech, companies aim to:
- automate and programme the purchase and diffusion of ad spaces
- collect and process customer data: data related to browsing behaviours and reactions to the ad can be used to target the right people, with the right message
Adtech in numbers
According to Statista, about 80% of UK residents have used ecommerce websites. The rise of online shopping and ever-growing access to the internet means that targeting people online is essential for companies worldwide.
Today, more than 3.5 billion people are regular Internet users. So it makes sense that, on a global level, 40.2% of total ad spend is now going to digital.
Understanding how adtech works and being familiar with its technologies and jargon is an essential part of modern marketers’ skillset.
Technologies used in adtech
Adtech technologies essentially serve as intermediaries between advertisers and the website on which the ad space will be displayed.
The infographic below outlines the main technologies used in adtech.
This raw data can then be analysed by business intelligence tools to obtain meaningful statistics. These can in turn be used to increase the ROI (Return on Investment) of programmatic (digital) marketing campaigns.
RTB stands for Real-Time Bidding. RTB systems facilitate the process of selling ad spaces with a bidding system.
With this technology, each ad space is sold at auction on a marketplace whenever a person visits the webpage where the ad space is located.
The auction takes place in less than a second. As a rule, the highest bidder will be awarded the right to use the ad space to display their ads.
SSP stands for Sell Side Platform, or Supply Side Platform.
This tool allows publishers to monetise their inventory. This means selling the programmatic (automated) ad spaces available. SSPs offer ad spaces to potential buyers automatically each time an impression is recorded. An impression is a visit on the web page containing the ad space to be sold.
Modern SSPs use real-time processing algorithms to automatically present the visitor with the most relevant ad according to their profile.
DSP means Demand Side Platform. It is the equivalent of SSPs for buyers.
Using these tools, advertisers can buy ad spaces automatically. They input segmentation and targeting criteria to optimise the ROI of their marketing campaigns.
Advanced DSPs allow for on the fly adjustments to be made to the campaign to maximise ROI. The platform can select the most efficient marketing channels and targeting criteria automatically over the course of the campaign.
Ad-exchanges can be compared to an online marketplace for ad spaces. These platforms facilitate the buying and selling of digital ad inventories coming from different ad space networks. It is a place for publishers and advertisers to meet and make deals.
Ad-exchanges aim to automate the selling process. If there is no need for buyers and sellers to communicate, ads can be displayed more quickly to the most relevant profiles.
RTB systems (see above) are usually used to conclude transactions.
☝️ There are many types of transactions offered by ad-exchanges. The two most common are:
- Open auctions, which allow all buyers to compete for the available inventory
- Private auctions, through which publishers can restrict the right to make a bid to approved buyers
Trading desks manage the process of buying ad spaces on behalf of advertisers.
The objective of these private agencies is to provide the best ROI for their clients. It is usually accomplished by the extensive use of data and performance analysis.
Overview of adtech companies
Adtech is dominated by giants. Google enjoys an unmatched position with Google Adwords. Selling ad spaces within its search results (Search Engine Marketing) proves to be a lucrative business. Google is also a key actor in ad tech with services such as Google Ads.
Facebook is also unrivalled in the social media sphere. Most ad campaigns would have to use its services if they want to leverage the power of social media marketing to promote their content.
But programmatic marketing features a wide range of diverse actors. Advertising engines offer different unique selling points to target specific audiences, and UK-based startups are rising stars in adtech.
- Ogury hails from Islington, and prides itself on being an advertising engine driver by the choice of users. This SaaS includes data gathered from websites even outside their own network to better understand customer behaviour.
- Qubit is based in Westminster, and can use users’ browsing history to deliver tailored ads and increase conversion rates.
Conclusion: the future of adtech
Adtech ushered in a new era for advertisers and publishers. These new technologies have made possible a brand-new way of advertising, suited to trends such as online shopping and multichannel marketing. These new ads rely on data and personalisation to deliver better return on investment for advertisers.
However, these advances have also brought their own interrogations about user consent and privacy protection.
In the UK, warnings have been issued by the Information Commissioner’s Office (ICO), urging the adtech sector to ensure compliance with privacy laws such as the GDPR.
These calls could reshape this already very dynamic space. Nonetheless, it is expected to keep growing at fast rates, as users turn more and more to digital services and ecommerce.