What is AdTech? Ad­vert­ising tech­no­logy in a nutshell

Ad­vert­ising tech­no­logy, or AdTech for short, refers to tech­no­lo­gies that can be used to plan and analyze marketing and ad­vert­ising campaigns. AdTech solutions include analytics and ad­vert­ising tools that help with everything from pur­chas­ing ad space to analysing target group data. When im­ple­men­ted properly, ad tech­no­logy can improve the scalab­il­ity, auto­ma­tion and prof­it­ab­il­ity of your ad campaigns.

The term `AdTech´ is used to refer to the fields of digital ad­vert­ising and ad­vert­ising tech­no­logy. Ad tech­no­logy refers to a wide range of tools, software and services that are designed to optimize ad campaigns in the context of di­git­al­iz­a­tion. It’s the found­a­tion of suc­cess­ful online ad campaigns.

Before we take a closer look at AdTech, let’s take a minute to dis­tin­guish it from marketing tech­no­logy or MarTech for short. While there are some areas of overlap, there is a clear dif­fer­ence between ad­vert­ising and marketing. The most important dis­tinc­tion is that marketing refers to the strategies that a company uses to position its products and services on the market, set itself apart from the com­pet­i­tion and build customer loyalty. Ad­vert­ising, on the other hand, serves to con­sol­id­ate a business’s market position, generate vis­ib­il­ity, reach customers and specific target groups and create efficient ads.

Here’s a summary of the most important dif­fer­ences between AdTech and MarTech:

Ideally, ad­vert­ising will emerge from a marketing strategy and provide data on customers and per­form­ance, which can then be used to optimise the marketing strategy. The holy grail of marketing strategies is a har­mo­ni­ous con­nec­tion between AdTech and MarTech, in which they build on each other. Sep­ar­at­ing the two too much can lead to problems with the ef­fi­ciency and flex­ib­il­ity of data, ad­vert­ising, and marketing campaigns.

The range of ad­vert­ising tech­no­lo­gies that fall under AdTech is huge. Some of the most important elements of it include tech­no­logy and software such as:

• Pro­gram­mat­ic ad­vert­ising
• Demand-side platforms
• Supply-side platforms
• Agency trading desks

They are often offered as services or managed services by agencies. Let’s take a look at each of these found­a­tion­al elements in detail.

Pro­gram­mat­ic ad­vert­ising (PA) is used for the automated buying and selling of digital ads and ad space across platforms and devices. Some of the ad­vant­ages of PA are flexible scalab­il­ity and plannable reach for ad campaigns, real-time ads, and trans­par­ent, target-group ori­ent­ated measures of success.

The idea behind PA is simple. Every time suitable ad inventory becomes available, companies can use pro­gram­mat­ic buying and real-time bidding (RTB) to auto­mat­ic­ally buy ad space and then use real-time ad­vert­ising (RTA) to display ads. Al­gorithms, machine learning, data mining and automated workflows are thus used to ef­fect­ively implement ad campaigns and auto­mat­ic­ally adjust them for target groups and pur­chas­ing behaviour.

Demand-side platforms are software solutions that busi­nesses can use to buy ad inventory such as video ads, display ads, and mobile ads. They work pro­gram­mat­ic­ally using real-time bidding. In order to satisfy the demand for ad space, ad­vert­isers turn to networks, inventory, and ad exchanges for online ad­vert­ising. DSP software and direct in­teg­ra­tion make it possible for ads to be published based on their target group and how lucrative the ad space is, and displayed on several websites at once. The most important thing for ad­vert­isers is to buy the right ad space for their target group while staying within budget. Some of the biggest DSP players are Amazon DSP, Google AdWords, Adform and The Trade Desk.

Supply-side platforms (SSP), on the other hand, provide software tools for the supply side, i.e. pub­lish­ers that offer automated digital ad inventory. So we’re talking about the pro­gram­mat­ic sale of ad inventory. Pub­lish­ers and SSP can spe­cial­ise in certain types of ads and in­vent­or­ies or offer a diverse selection to ad­vert­isers. Pub­lish­ers use SSP software to network with ad exchanges and make offers available for auction. The bids coming from DSP then determine which ad­vert­iser gets the ad space. Thanks to SSP, pub­lish­ers can reach more ad­vert­isers. Ad­vert­isers, on the other hand, can use their budget ef­fi­ciently thanks to bid ranges and versatile ad inventory.

Agency trading desks (ATD) are tools and services that are closely connected to the demand side platform. An ATD has to do with the planning and purchase of ads using a DSP. Important com­pon­ents include the in­teg­ra­tion of inventory sources, ad networks and ad exchanges, as well as measuring the success of ads. The ATD is used to plan, prepare, implement and optimise ad strategies and campaigns with in­teg­rated DSP. The aim is to use your ad­vert­ising budget as ef­fi­ciently as possible and place ads on different channels as suc­cess­fully as possible.

Ad servers are closely connected to ATD. They’re used by ad­vert­isers, pub­lish­ers and agencies to save ad in­vent­or­ies and ads, and determine where and how an ad is displayed. Ad servers can also be used to evaluate the success of an ad campaign.

AdTech covers a wide range of tools and platforms, including these other forms of ad­vert­ising tech­no­logy:

Ad exchanges are online mar­ket­places for buying and selling ads. They connect pub­lish­ers and ad­vert­isers on ad exchange networks and servers, where pub­lish­ers can offer ad inventory and ad­vert­isers can set a budget for real-time bidding.

Data man­age­ment platforms are used to collect and manage data related to, for example, ad inventory and the sale of ads. Using DMP, complex data sets can be collected, processed and evaluated with stat­ist­ics and analyses. Well-organised data man­age­ment combined with data mining tools can be used to generate buyer personas, omni-channel marketing and pre­dict­ive analytics, and thus achieve more efficient ad campaigns.

Stra­tegic­ally placed keywords will often determine whether an ad is seen, a target group is reached and a product is bought. Search engine marketing (SEM) makes it possible to acquire ad space in con­nec­tion with valuable or popular keywords and thus to reach new target groups or increase reach. SEM can also be im­ple­men­ted in con­nec­tion with search engine ad­vert­ising (SEA) and search engine op­tim­isa­tion (SEO). To learn more, check out our SEO glossary.

Tag man­age­ment systems manage, organise and update marketing and ad tags using auto­ma­tion and container logic. They ensure the whole source code does not have to be adapted when new ad campaigns are launched or a website is re­designed.

Native ad platforms aren’t so much a tool as a measure for in­teg­rat­ing ad content or­gan­ic­ally into web content, e.g. as re­com­mend­a­tions, tips and in-feed ads.

Ad fore­cast­ing software enables you to optimize the use of your ad­vert­ising budget. It evaluates the pur­chas­ing and usage behavior of customers, gives you an overview of expected costs for ad inventory and ad placement and offers budget op­tim­iz­a­tion using projected goals and expected costs.

The money that companies spend on online ad campaigns shows how important online ad­vert­ising strategies are. But the world of e-commerce is becoming more and more complex. Im­ple­ment­ing ads in an effective and cost-efficient way requires flexible, high-per­form­ing struc­tures. AdTech tools enable you to master the com­plex­it­ies of e-commerce, identify and engage target groups on various channels and prof­it­ably place your ads. Ef­fi­ciency, cost savings, scalab­il­ity, and net­work­ing are thus the biggest ad­vant­ages that AdTech has to offer.