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Ad Tech: The Future of Advertising is Here

Ad Tech-The Future of Advertising is Here

ICT | Apr, 2021

According to IAB Internet Advertising Revenue Report, digital ads in US accounted for more than USD100 billion in 2018 and UK advertising market is worth £13.44billion, majority of which comes from smartphone advertising. In the era of big data and social media, ad agencies are investigating innovative ways to interact with relevant users and make a lasting impression. With internet presenting an ultimate field of opportunities and monetization frenzy hitting the fever pitch high right now, Ad Tech has taken the centre stage. Ad Tech is short for advertisement technology, which intends to make advertisements faster, quicker, and efficient. Driven by powerful algorithms and data points, Ad Tech provides a streamlined and cohesive approach to maximize the efficacy of campaigns across all points of the funnel.

What is Ad Tech?

Ad Tech broadly refers to the digital tools and analytics system used for delivering, controlling, targeting, campaign design, bid-management, optimization, and automation of digital advertising. Ad Tech tools and technologies not only helps advertisers to reach the potential target audience and widen brand reach, but also provide marketers to see a broader picture regarding their campaigns and amplify its impact. Data retrieved from consumers using their social media sites, browsing activities, and engagements and search history is analogous to insights on consumer interests and needs. There are two methods of getting data important for Ad Tech.

·         Third-party: Buy from somebody else

·         First-party: Gather actual data from actual people (with values, behaviours, attitudes, and attributed)

Companies like Google, Facebook and LinkedIn are owners of such data, and act as Ad Tech companies to monetize those insights to enable brands and marketers create targeting strategies for better customer acquisition and retention. Proctor & Gamble, General Motors, AT&T, Ford Motor Company, Charter Communications are some of the reputed brands that spend the most on Ad Tech. E-commerce companies have enormous advantage in the Ad Tech space as they can combine partnerships and product placements to work together and maximize revenue from their visitors even if they do not opt to buy anything.

Nowadays, around 74% of marketers choose to work with agencies whose area of expertise involves leveraging the full potential of advertising technology. With Ad Tech, modern advertisements are directed at the most relevant audiences at the perfect timing with suitable context thus personalizing marketing techniques help to enhance ad performance, and save a lot of time, money, and effort.

According to TechSci Research report,Global Ad Tech Market By Type (Cloud-Based, On Premises), By Organization Size (Large Enterprises & SMEs), By Pricing Type (Fixed Monthly Fee, Ad Spend Commission, Hidden Bid Markups), By End User (In-House Media Buyers, Ad Agencies, Website Owners, App Developers, Ad Networks), By Channel Type (Display advertising, video advertising, PPC, social media advertising, CTV, DOOH), By Company, By Region, Forecast & Opportunities, 2026”, the global AD tech market is projected to grow at double digit CAGR on account of increased investment by key players operating in the market to improve the quality and response from customers.

 

Marketing Techniques Introduced by the Ad Tech Industry

·         Programmatic Advertising

Programmatic advertising has transformed the way marketers communicate with their customers. Automating the media trading process between advertisers and publishers, programmatic advertising allows the demand-side to bid on the most relevant ad placements. Leveraging Ad Tech, space on the publishers’ digital assets can be sold for the best price within a matter of seconds. With the use of software and algorithms, programmatic advertising does not only make the whole process of buying ads efficient but also more effective, as opposed to the traditional process of RFPs, human negotiations, and manual inventory orders. Real-time bidding and open exchanges enable buyers to bid on the inventory of publishers and target ads to specific users rather than merely relying on the publishers’ information about their audience. In 2012, only 10.4% of global digital spend was programmatic, but by 2021, 72% of digital media will be programmatic and global digital display ad spend is projected to reach USD2024 billion.

·         Targeted Advertising

Tracking real-time visitors on web portals, identifying their demography settings, and checking their buying history and digital behaviours, brands can deliver their messages to certain demographic or people with specific interest to ensure ad relevance for the user. Serving helpful content at the right place and right time is an ideal way to reduce wasteful spending and increase ad performance. Some types of targeted advertising used online include Social Media Ads, Search Engine Ads, Behavioural Ads, among others.

·         Omnichannel Programmatic

Omnichannel pragmatic refers to the practice of digitally sequencing advertising across various channels that are connected, relevant, and consistent with the customer’s stage in their lifecycle to offer personalized recommendations across interactions providing a truly seamless omnichannel experience. Adopting omnichannel programmatic can help marketers achieve the following outcomes.

·         Reduce gap between customer interaction and their persona for enhanced customers experience to help identify the customers across channels and throughout their buying journey.

·         Increase the adoption of APIs digitally across media to deliver authentic brand experience at the right moments and measure customer behaviour connecting all touch points.

·         Collect critical data from touch points programmatically to optimize interaction with customers, move them towards the next stage of their journey and ultimately towards a purchase.

Ad Tech Ecosystem


Ad Tech Ecosystem refers to the collective name of the realm that encompasses all ad tech solutions and connections between them.

·         Media agencies purchase media on behalf of advertisers with the intent of placing their messages to the right audiences at the best prices.

·         Agency Trading Desk is an extension of media agency that purchase ads across multiple platforms programmatically.

·         Demand-Side Platforms (DSPs) are independent platforms that allows media buyers to run ad campaigns and buy inventory from various ad exchanges and SSPs utilizing data from data management platforms and data brokers.

·         Data Management Platform (DMP) is a centralized hub designed to gather data from all platforms to gain an in-depth insight about the consumer. In simple words, DMP is a software that takes on the role of a data warehouse that sorts and assembles detailed customer information, then sends out to publishers, marketers, and businesses. DMP will consolidate both first- and third-party data from various channels for audience creation and optimization for both current and future use.

·         Ad Network is a technology platform that serves as a broker between advertisers and publishers. Collecting unsold ad inventory from multiple publishers and offering pool of impressions to advertisers, ad networks transact media buys between advertisers and publishers. The different types of ad networks include Premium ad networks, Vertical ad networks, Specialized or Inventory-specific ad networks, and Performance and affiliate ad networks.

·         Ad Exchange refers to the dynamic technological platform that facilitates buying and selling online advertising inventories between advertisers and publishers.

·         Supply Side Platforms (SSPs) are independent advertising platforms that aggregate inventory from publishers, funnel it into an automated auction to coordinate and manage their supply and distribution.

·         Ad Server, also known as “ad tracking system” or “campaign management platform” is a technological system responsible for hosting, optimizing, and distributing advertising content across different media channels such as websites, social media platforms, and mobile applications.

How Artificial Intelligence can be leveraged in the Ad Tech Industry?

Listed below are the ten ways AI can help the Ad Tech industry to find better solutions in various areas.

·         AI in Ads Positioning

Employing machine learning algorithms studying historical data of consumers can help to find relevant ads for the targeted user group, which eliminates the need to sit and determine where to place ads to drive maximum revenue.

·         AI in Ad Audience Targeting

Making demographic and budget adjustment to ads utilizing audience management tools allow one to increase their ROI. Leveraging AI for audience segmentation to support better ad targeting is a pragmatic way to use the technology.

·         AI for Automated Analytics

AI-driven automated analytics enable businesses to adjust to new information that help brands recognize a broad array of patterns and surfacing relevant insights. AI-driven analytics can analyse millions of data combinations and send an alert when something instrumental happens, such as spike in PPC activity where you are not advertising, etc.

·         AI in Predictive Bidding

Predictive bidding evaluates data arrays and offers right bid at the right moment during programmatic auction, which ultimately reduce the cost per ad impression. Also, the algorithm analyses user purchase history to accurately determine which offer will most likely lead to conversion.

·         AI for Dynamic Creative Optimization

Using AI tools and techniques, brands can create personalized ads that adapt according to the design, colour, and layout for each individual user as per their tastes and preferences in real-time.

·         AI in Product Recommendations

AI determine the purchasing intent taking into consideration user purchasing history, most popular products, previous actions, as well as actions of other customers with similar characteristics and then adds recommended products to the advertising that user sees on a webpage.

Ad Tech Industry Trends

Here are some of the Ad Tech industry latest trends shaping online advertising.

·         Ad Tech Consolidation for More End-to-End Advertising Solutions

As the demand for ease and efficiency is growing, advertisers can expect media platforms to consolidate for providing customers with more addressable solutions. The combined data of DMPs, DSPs and measurement platforms can help to boost ROAs with personalized targeting that reaches every step of consumer’s journey. Since integrating multiple platforms means less coordination and reduces the possibility of bidding against oneself, Ad Tech consolidation open ecosystem where brands have a greater choice and more control.

·         Improved Focus on Measurement and Inventory

Advertisers and brands are demanding more standardized ways of measuring the effectiveness of ads as the Ad Tech is maturing and opening standards where no single governing body regulates the marketplace. Viewability has become a key metric for both publishers and advertisers as it tracks ad impressions that appear “in-view” on a screen as opposed to impressions served. Selling inventory based on viewability can enable publishers to offer high-quality inventory at a competitive cost. On the demand side, advertisers are stressing upon cross-platform measurement standards for ad serving decisions.

·         Privacy Laws to Prevent Ad Frauds

Thanks to the concentrated efforts of publishers to implement brand safety measures like ads. text and brand controls, the financial losses from ad frauds have hit a slowdown. Ad Tech players are making moves to combine user privacy and authorized inventory to avoid privacy-related violations. With more built-in tools and solutions, privacy compliance is also driving a shift in AdTech capabilities focused on brand safety to support more accountable and effective advertising efforts.

Conclusion

The introduction of ad tech solutions has been instrumental in shaping the advertising industry in the digital age. As Ad Tech will continue to evolve, the media agencies will gain significant advantage of the opportunities that attributed Ad Tech such as integrating platforms, data sharing, extending reach across various channels, and so on. 

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