February 28, 2024
|
7 mins

What is ad tech?

Understanding the ad tech ecosystem, and how to harness its power.
Media

What Is Ad Tech?

“Back in my day, we could only use billboards, flyers, and the guys who spin signs outside of a phone shop to get the word out about our product!” an elder marketer exclaimed to me during happy hour one day. 

Younger me, freshly graduated from college, rolled my eyes: “I’m sure you had to walk uphill both ways in the snow to school too,” I thought to myself, taking another sip as he regaled us about his glory days. How naive I was.  

I’d come to learn he was right: The avenues for marketers and advertisers to sell their wares have erupted in the last almost 30 years when the first-ever ad server by Foca Link Communications Inc. hit the market. Since then, ad tech has evolved from simple tools for digital ad placement to highly sophisticated systems that offer unprecedented targeting, efficiency, and analysis. 

2023’s global programmatic ad spend is expected to exceed $557 billion–and that’s just one facet of ad tech! 

Over the years, the ad tech landscape has continued to evolve with more and more personalization becoming the need for advertisers.
- Adam Holt, SVP at Comscore

"With those demands comes an ever changing landscape from a tech and vendor landscape, which has ultimately led to money flooding into the ad tech world,” noted Comscore SVP Adam Holt when I sat down to pick his brain. He is, after all, an ad tech veteran of the last two decades. 

Holt, as per usual, is right. Ad tech’s valuation is a reflection of personalization technology that drives huge value for companies across a wide variety of industries. With its complex algorithms, ad tech has transformed the way marketers and advertisers connect with their audiences. Gone are the days of broad, untargeted advertising: In its place, ad tech has introduced a world where personalization reigns supreme, and marketers are able to efficiently reach target audiences with just a few keystrokes. And this technological revolution has not only expanded the tools available to advertisers but also opened up a multitude of avenues for creative and strategic advertising.

Which begs the question: How does ad tech work? What makes up its complex ecosystem? And how can one harness its power to empower creatives? 

Understanding the ad tech landscape: key components and players

The ad tech landscape is a dynamic and intricate system, consisting of various key players and components that work together to streamline digital advertising. Each of these elements plays a critical role in the delivery, management, and optimization of ads. “[All of these components] help advertisers serve relevant advertisements to relevant audiences,” Holt notes, as we parse through the ecosystem, one I’m hoping the list below will help illuminate for you, as it did for me. 

Demand Side Platforms (DSPs)

Demand Side Platforms are sophisticated software platforms used by advertisers and agencies to purchase advertising in an automated way. DSPs facilitate the buying of ad inventory from multiple ad sources simultaneously. They allow advertisers to manage multiple ad exchange and data exchange accounts through a single interface. By doing this, DSPs enable advertisers to optimize their campaigns and target specific audiences with precision, leveraging real-time bidding (RTB) for efficient ad purchases.

Supply Side Platforms (SSPs)

On the other side of DSPs sits Supply Side Platforms, which are used by publishers to manage and sell their ad inventory. SSPs enable publishers to connect their inventory to multiple ad exchanges, DSPs, and networks, with the goal of maximizing their revenue potential. These platforms use automated selling techniques, often leveraging real-time bidding, to ensure the highest possible prices for the publisher's ad space.

Ad Exchanges

Ad Exchanges sit in between DSPs and SSPs and are digital marketplaces that facilitate the buying and selling of ad inventory from multiple ad networks. The exchange connects advertisers (via DSPs) with publishers (via SSPs), allowing for real-time bidding on ad inventory. This process ensures that publishers get the highest possible rates for their ad space, while advertisers can target their ads more efficiently and effectively.

Data Management Platforms (DMPs)

Data Management Platforms collect, store, and analyze large sets of data, helping advertisers and publishers make more informed decisions. DMPs consolidate data from multiple sources, including first-party data (collected from their own platforms), third-party data (acquired from external sources like DSPs, SSPs, and Ad Exchanges), and even offline data. This comprehensive view of data enables more targeted and effective advertising campaigns.

The role of programmatic advertising

So once an ad has been bought, what is the process by which it’s served up to consumers? 

Programmatic advertising. 

Programmatic advertising is the automated process behind buying and selling online advertising. It uses artificial intelligence and real-time bidding to automate the decision-making process of where ads are placed, and then optimizes the effectiveness and efficiency of the advertising. Programmatic advertising fits into the ad tech landscape as a critical component, leveraging the capabilities of DSPs, SSPs, ad exchanges, and DMPs to create a seamless, efficient, and highly effective advertising ecosystem.

Through programmatic advertising, marketers and advertisers can purchase ad inventory in real-time, targeting specific audiences based on extensive data analysis. This approach to advertising not only increases the relevance and effectiveness of ads but also enhances the overall efficiency of the ad spend.

The future of ad tech and creativity 

All we’ve discussed thus far is a marketing operations analyst’s dream—but how can creative marketing professionals harness this technology for their work? And what other burgeoning technologies will contribute to the advancement, as well as the need, for more personalization? 

“Advertisers are pushing for the ability to have the right ad served to the right person at the right time–and ad tech companies are allowing this to happen. With advancements in things like AI, the path towards highly tailored creative content creates better ROI on marketing spend,” Holt explains in our discussion about why ad tech is really a huge win for creatives. 

He explains the fusion of advanced technology with advertising has already begun reshaping the role of creativity in marketing for the better, as it means the creative will be seen by the intended audience. “Ad tech can help inform decisions and then optimize the execution, which ultimately reduces waste and improves the business economics in a world where margins are key.”

Holt isn’t the only leader in the space worried about wastage. Lindsay Hong, CEO and co-founder of SmartAssets, is a huge proponent of using ad and creative technology to improve outcomes and cut down on unnecessary waste. “We need to be cognizant of not just budget wastage but also production wastage,” she told Digiday.

Why does nobody care about all those DCO (dynamic creative optimization) versions not being used?
- Lindsay Hong, CEO at SmartAssets

Leveraging tools that support creative optimization and pulling in data from ad platforms helps to minimize the time and money spent on discarded creative.

Let’s delve into some up and coming technologies creative marketing professionals should consider as they’re looking towards the future, how they will interact with the preexisting ad tech stack, and why this could create win after win for creatives. 

AI and machine learning: precision meets creativity

The integration of artificial intelligence (AI) and machine learning in advertising technology is a game-changer, especially for DSPs, SSPs, and Ad Exchanges. AI's ability to analyze vast amounts of data and predict consumer behavior enhances the efficiency of DSPs in targeting ads and SSPs in optimizing inventory value. In ad exchanges, AI-driven insights can refine real-time bidding processes, making them more effective. For creative marketers, this means the ability to harness AI for crafting hyper-personalized campaigns and generating creative content that resonates with specific audience segments, thereby maximizing the impact of their advertising efforts.

There’s also work being done to make media mix modeling (MMM)—a process that assesses media spend and helps marketers optimize it across channels and creative—more accessible using machine learning. While MMM has historically been extremely expensive and challenging to conduct, models built using ML can now ingest historical data and offer suggestions based on that model. This is what tools like Activate do for marketers. 

Augmented and virtual reality: the immersive frontier

Augmented Reality (AR) and Virtual Reality (VR) are transforming the advertising world by offering immersive experiences for consumers. When integrated with data from traditional ad tech, AR and VR can deliver highly personalized content tailored to individual preferences. Creative marketers can utilize AR and VR to craft engaging, interactive experiences that transcend traditional advertising, offering a new level of engagement and resonance with consumers.

And there’s a lot to look forward to in this space. Products like ARound have worked with sports teams like the NFL’s Los Angeles Rams and the MLB’s Minnesota Twins to turn audience spectators into active participants through localized, stadium-centric AR content. 

“Brands can leverage AR to create interactive experiences that engage fans and offer more touch points throughout a game or event,” says Josh Beatty, CEO of ARound.

Getting started with ad tech as a creative marketer

Embracing ad tech as a creative marketer can seem daunting given its complexity and technical nature. However, understanding and utilizing ad tech is crucial in today’s digital advertising landscape. Here’s a guide on how to get started:

1. Build a strong foundation of knowledge

• Understand the Basics: Begin by familiarizing yourself with the key components of ad tech: DSPs, SSPs, Ad Exchanges, DMPs, and the principles of programmatic advertising. Understanding how these elements interact will give you a solid foundation.

• Stay Informed: The ad tech industry is rapidly evolving. Keeping abreast of the latest trends, technologies, and best practices is crucial. Subscribe to industry blogs, attend webinars, and participate in relevant forums and discussions.

2. Explore data management platforms (DMPs)

• Leverage Data in Support of Creativity: DMPs are crucial for understanding audience segmentation. Use insights from these platforms to create more targeted and relevant content that resonates with your audience.

• Experiment with Segmentation: Try different segmentation strategies to see what works best for your campaigns. Testing and learning will help refine your approach to targeting and personalization.

3. Utilize demand side platforms (DSPs) effectively

• Experiment with Targeting Options: DSPs offer a range of targeting options. Experiment with these to find the most effective ways to reach your intended audience.

• Monitor and Optimize Campaigns: Use the data and analytics from DSPs to continuously monitor and optimize your campaigns for better performance.

4. Integrate emerging technologies

• Experiment with AR and VR: Explore how augmented and virtual reality can be integrated into your campaigns for more immersive experiences.

• Harness AI for Creative Decisions: Utilize AI tools for market analysis, content creation, and predictive analytics to enhance your creative ideation strategies.

5. Focus on ethical advertising and data privacy

• Prioritize Consent and Transparency: In your campaigns, ensure that you adhere to data privacy laws and ethical advertising standards. Transparency and consent should be at the forefront of your data collection and usage practices.

• Educate Yourself on Regulations: Stay updated on regulations like GDPR and CCPA. Understanding these will help you navigate the legal aspects of ad tech responsibly.

6. Collaborate and network

• Engage with a Community of Professionals: Networking with other marketers, advertisers, and tech professionals can provide valuable insights and collaborative opportunities.

• Seek Partnerships and Collaborations: Consider partnerships with tech providers or other creative agencies to expand your capabilities and learn from their expertise.

7. Continuous learning and adaptation

• Embrace a Learning Mindset: The ad tech field is dynamic, so a commitment to lifelong learning is essential. Attend workshops, take online courses, and read extensively.

• Adapt to Changes: Be ready to adapt your strategies and approaches as new technologies and platforms emerge.

8. Start small and scale up

• Begin with Pilot Projects: Start with small-scale projects to test the waters. This approach allows you to learn and adjust without significant risk.

• Scale Gradually: As you gain confidence and experience, gradually scale your use of ad tech in more extensive campaigns.

Getting started with ad tech as a creative marketer involves building a strong knowledge base, experimenting with different ad tech tools, staying informed about emerging technologies, focusing on ethical advertising practices, and continuously adapting to new developments. By taking these steps, you can effectively harness the power of ad tech to create innovative, impactful advertising campaigns. And, you’ll make your CMO and CFO happy.  

Alicia Marie Beatty

Take five minutes to elevate your marketing POV
Twice monthly, get the latest from Into the Cloud in your inbox.
We’ll be in touch!
Someone from our sales team will reach out within 24 hours.
In the meantime, you can learn more about our product groups.
Oops! Something went wrong while submitting the form.
Related articles
2023 Gave Us Reasons To Be Optimistic About the Film Industry
The data shows that streaming isn’t killing off the IRL theater experience just yet
Media
A quick guide to getting started with AI, for marketers
In the heart of today's tech-savvy world, artificial intelligence beats louder than ever.
MarTech
How to incorporate market research into your marketing strategy
Insight into how market research can be used to better understand your customers, track competitors, and find gaps in the market.
Research