What is AdTech? A Comprehensive Guide to Advertising Technology

AdTech is a general term that refers to any technology that can be used to facilitate the buying and selling of ad spaces. AdTech is responsible for:

• Finding the right audience for the advertiser;
• Maximizing the performance of the ad through segmentation;
• Improving the returns on investment.

Of course, there’s more than one AdTech technology behind these functions. The main solutions are DSPs, SSPs, ad exchanges and DMPs, and you’ll learn more about them in this text.

AdTech can be involved in every stage of the advertising process. These are the most crucial functions.

• Connecting advertisers with publishers: Having both parties in one “place” widens the options, providing more opportunities to boost ad campaign outcomes and ROI.
• Automating the process: Through programmatic advertising, AdTech completely removes the need for one-on-one negotiations.
• Ad performance optimization: By giving advertisers and publishers access to reports and insights, they can refine their requirements to improve ROI.

ROAS, or Return on Advertising Spend, is calculated by dividing the ad revenue by the ad spend. What you get is a multiplier that represents the returns. The bigger the number, the more effective your campaign has been.

However, did you know that we can only get this metric because of AdTech? AdTech makes it possible to track every dollar earned from your advertising efforts. However, the ROAS shouldn’t be taken as a lone statistic. To have a better sense of how effective your campaign really is, compare your result with the standard ROAS for your industry.

AdTech is essential for the following three groups.

• Advertisers: They want to promote a brand, product or service and are looking to get their message to the right audience.
• Publishers: Publishers content that’s designed to attract a certain audience. They also sell ad spaces to advertisers.
• Platforms: Platforms are used by both advertisers and publishers to get the best deal. With AdTech, the entire process happens instantly.

Technologically speaking, platforms serve to do the heavy lifting that was once left to advertisers and publishers.

Overview of Programmatic Advertising

Programmatic advertising is the automation of buying and selling ad spaces and is made possible by AdTech. This replaces the traditional method of conducting such transactions, which involved many hours spent on negotiations and time-consuming deal closures. Instead, programmatic advertising uses various tech advertising solutions such as artificial intelligence, machine learning and data analytics to streamline the entire process. Apart from introducing a higher level of expediency to the process, it also ensures a better match for every advertisement created.

Real-Time Bidding (RTB) and Ad Auctions

AdTech also facilitates real-time bidding, which goes something like this:

1. An advertiser visits the publisher’s site.
2. The publisher makes it known that it has ad space for sale.
3. Advertisers place their bids to start an ad auction.
4. An ad (considering its quality and relevance) wins the bid and gets placed.

That’s it! And with AdTech, all this happens in a matter of milliseconds. The cycle repeats itself every time a user visits the site.

We’ve touched on what it takes to implement programmatic advertising. However, this speedy process could never work without the ad-tech industry and its solutions. All of which serve a crucial role in streamlining the ad-buying process, achieving accurate targeting and positively impacting your bottom line.

Demand-Side Platforms (DSPs): Connecting Advertisers with Inventory

To access the ad spaces available, advertisers need a demand-side platform. It is responsible for:

• Campaign management, providing you with access to tools so that you can customize your campaign, changing things like your budget and target audience;
• Real-time bidding, allowing you to initiate multiple automated budding processes across different AdTech exchanges;
• Monitoring and evaluation, allowing you to further customize your campaign to improve your results.

With this AdTech, not only will you have better control of your campaign, but you’ll also get the best ad inventory for your budget.

Supply-Side Platforms (SSPs): Managing Publisher Ad Space

SSPs are AdTech services used by publishers to help you get the best returns from your ad inventory. Their primary functions are:

• Managing your ad inventory, including categorizing the ad types that you want to make available;
• Removing low-quality ads, which also considers the relevance of the ad to the site’s content;
• Serving the highest bidder, allowing you to display the ad on your platform right away.

SSPs also create reports and analytics so that you can come up with a new strategy if required.

Ad Exchanges: Facilitating Transactions Between DSPs and SSPs

You can think of an ad exchange as a virtual marketplace where the DSP and SSP — the representatives of advertisers and publishers, respectively — meet. These AdTech tools examine the requirements of each advertiser, including audience demographics, interests and other targeting characteristics. Then, based on the available ad supply, the AdTech exchange identifies the best match. Real-time bidding occurs at this stage.

Data Management Platforms (DMPs): Leveraging Information for Targeting

What is ad tech able to accomplish in terms of accurate targeting? How does it determine the best match for content? The DMP facilitates accurate audience targeting through the following AdTech functions:

• Integrating data from both the DSP and SSP;
• Collecting data from advertising and publishing partners as well as external sources;
• Segmenting the audience based on specific parameters, such as demographics and psychographics.

For this AdTech solution, the focus is on pooling the information in one place and using it for segmentation.

New technologies have always introduced efficiencies into laborious tasks and processes, reducing the manual work required. The same applies to AdTech. It has improved many aspects of online advertising and the purchasing process. If you want to learn more about how AdTech can positively impact your marketing efforts, refer to the following subsections. These are just the main perks! Compared to the traditional way of buying ad space, AdTech is an improvement in every way.

Improved Efficiency Throughout the Process

One of the main advantages of AdTech is efficiency. It helps you:

• Save time: There’s no need to wait to launch a campaign.
• Eliminate human error: Since AdTech takes over most parts of the process, there’s limited room for any human error to occur.
• Reduce the human labor required: You don’t have to go through time-consuming processes or talk to publishers to have your ads land in the right space for your target market.

So, if there’s only one AdTech meaning, it definitely is going to be: efficiency!

Improved Returns on the Investment

Both advertisers and publishers can improve their returns. With the optimization capabilities that AdTech makes possible, advertisers can more effectively convert leads into paying customers. Since publishers can deliver better results through their ad space, the demand for it is higher. AdTech facilitates real-time bidding, which can drive up the price of ad space. Of course, making the right decisions will still determine the profitability of the campaign. AdTech simply makes an effective campaign even more successful.

Cross-Channel and Cross-Device Reach

No matter where your target market is hanging out, your ads can be there, too. AdTech can facilitate this through ad exchanges. Since many publishers are active in these spaces, most advertisers can find a match based on their ad content and target audience. AdTech helps ensure that your brand and/or product remain visible to your intended viewers. These days, people are constantly active on both their mobile and desktop devices, so you shouldn’t just choose one platform for your marketing efforts.

Easily Scalable Campaigns

Whether you want to start out small or go with a bigger budget, AdTech can adjust to your needs. Since you don’t actually have to talk to anyone to buy ad space, you can easily expand your campaign efforts. So, whether you represent a small business or a major enterprise, you can use the same AdTech tools. The effect of any adjustment you make will also be reflected in your data, allowing you to monitor your campaign progress.

Data-Driven Insights

AdTech has limited room for guesswork. And with the data already coming to you, it can be easier to conduct tests and perform analysis. You’re also able to perform advanced analytics while doing almost no work if you incorporate AI into the process. With AdTech, you always have a clear idea of what your next step should be. If you’re still a little bit lost, just remember that the entire MGID team is happy to help!

We’ve talked about DSPs, SSPs, ad exchanges, and DMPs. However, what do those things look like in real life? If you’ve run a digital marketing campaign in the past, we guarantee that you’ve already encountered at least one of these elements. AdTech is simply a part of online advertising. Of course, there are many tools to choose from. However, we believe the ones we’ve described will be the most useful for you.

MGID

MGID is a native advertising AdTech platform that caters to both the supply side and demand side of the media buying process. We specialize in using contextual advertising and programmatic advertising to display non-intrusive ads. These increase the odds that the user will interact with the content. To improve the returns that you get from our AdTech, our platform also features fraud detection and AI-driven targeting. Our services are available in over 200 countries, ensuring that you can reach your target audience no matter where they are.

Google Ads Manager

Google Ads Manager is easily the most widely known AdTech supply-side platform due to Google’s dominance in the sector. Many advertisers use Google services to display ads on Google partner sites. If you’re a publisher, you’ll love the fact that you can manage inventory across an unlimited number of websites on just one AdTech platform. There’s also a special bidding feature for the header, which is the first ad that a user will be exposed to when they open a page. This allows you to improve your yield from selling ad inventory.

Google Display and Video 360

If you’re a publisher, you’ll likely use Google Display and Video 360. This demand-side platform allows you to automate media buying across many ad formats, including display, video, audio and connected TV. If you want to follow your target audience around the web, this AdTech DSP supports cross-platform management. It also provides audience insights, which can serve as your guide in setting the direction of your campaign.

There’s no doubt that AdTech has allowed both advertisers and publishers to vastly improve the media buying process. However, that doesn’t mean that it is not without its challenges. Many people in the industry can face challenges associated with these tools, technologies and platforms. That doesn’t mean that you should do away with AdTech and go back to the old-school way of doing things. Instead, you should use the information here to prepare yourself for these obstacles so that you can overcome them.

Ad Fraud

Ad fraud continues to be a huge problem in the industry. When running a campaign, an advertiser may receive a lot of bot clicks and traffic. So, although indirectly, AdTech can contribute to budget wastage. Now, your challenge is to make sure that your money is reaching your legitimate target market. The tendency for ad fraud in the AdTech industry has led to the use of fraud detection algorithms that flag suspicious transactions. Be sure to incorporate the use of these systems into your strategy if they’re not readily available in your chosen platform.

Data Privacy and Compliance

The world’s largest markets have strict laws regarding user privacy. For example, the General Data Protection Regulation (GDPR) applies to the entire European Union. So, catering to those markets means potentially limiting the kind of data that you can draw from your target audience. So, make sure that any AdTech that you use adheres to these regulations to avoid incurring fines or damaging your reputation. As a marketer, it is also your duty to keep yourself updated on any changes related to guidelines and regulations on data handling.

AdTech Transparency

Many of these technologies act like a black box of sorts. You only see the input and the output. So, most of the time, you don’t know where exactly your budget is going and which platforms your ads are being displayed on. That’s why you should only use reputable AdTech platforms and technologies to ensure that your funds are being allocated efficiently and to relevant markets. We also encourage you to talk to the developer’s customer support team or explore the help center before committing. This way, you’ll feel more confident about using their services.

Technologies are advancing at a pace that we’ve never seen before. We expect the same to happen to AdTech. It will continue to evolve and adapt. In fact, you can see some of these trends right now. If you want to stay in the advertising game for a long time, make sure that you’re aware of them. This way, you can recalibrate your approach to take into account the various shifts that may affect the effectiveness of your ad campaigns.

First-Party Data Strategies

Both Safari and Firefox phased out third-party cookies in 2023. Even though Google Chrome has backed out of its plan to follow suit, failing to incorporate other data-collecting strategies may mean missing out on certain markets. That’s why we’re seeing many experts in the industry use a workaround to third-party data collection. They’re now leveraging first-party data and AI-driven analytics to continue to deliver personalized ad content. We predict that internet-specific data privacy laws will be created in other jurisdictions, eventually forcing AdTech users to embrace more privacy-friendly strategies.

###Contextual Advertising

Contextual advertising is on the rise. If you ask us, it is caused by two things:

• Strict data privacy laws: As we discussed, this means using first-party data to create personalized recommendations.
• Growing popularity of native advertising: To create a seamless experience, the ad content must reflect what the platform is about.

AdTech platforms like MGID support contextual advertising and ensure the compatibility of your strategy across different jurisdictions. They also help future-proof your strategy because you don’t have to rely on third-party data.

Programmatic Audio Advertising

With devices for cloud-based assistants like Alexa and Google Nest gaining popularity, there’s now another exciting way to connect with your target market. Audio advertising gives you an opportunity to reach your target market even if they’re not using a device directly. This is a very new space in AdTech, but it’s worth exploring if it means it’ll work for your target audience.

Maximizing the benefits of advertising technologies doesn’t have to be complicated. The simplest thing you can do to leverage AdTech is simply to use it. After all, you can only access the benefits when you’ve already incorporated the tools into your advertising strategies. However, you have to be proactive to fully benefit from everything AdTech has to offer. So, as you enjoy the seamless and instant media buying process, we encourage you to do the following.

Invest in Technical Expertise

Especially if you’re running a one-person team, you’ll need technical expertise to make sure that your AdTech is doing what you want it to. This way, you can easily troubleshoot and optimize, ensuring that you’re getting the most value out of your budget. You can do this by taking advantage of any guides that the developer has. We also recommend hands-on learning, meaning you should continue exploring the AdTech platform and the tools you’re already using. This allows you to discover new things, potentially opening new avenues by which you can improve the outcome of the campaigns you’re running.

Keep Up with the Trends

AdTech and the environment in which you use it are changing all the time. If you want to ensure you’re maximizing its value, keep up with the latest trends. Staying informed ensures that you’re:

• Maximizing your ad performance;
• Staying compliant with data privacy laws;
• Maintaining your edge against the competition.

We regularly publish updates on our blog. However, there are other resources that you can use to stay updated.

Engage in Continuous Monitoring and Evaluation

Contrary to popular belief, any AdTech isn’t a set-it-and-forget-it kind of deal. If anything, it’s the opposite. You need to constantly monitor the performance of your campaigns and evaluate the results to make the necessary tweaks. By staying on top of things, you’ll quickly spot opportunities for improvement. And if there are any issues, you can address them before they become worse. Your chosen AdTech platform will already have monitoring and evaluation features, so we recommend starting there. If you want to integrate an entirely different tool, you’re always free to do so.

We are very confident that the use of tools and platforms related to AdTech will be around for a long time. However, they will continue to evolve. So, even as new ways to advertise online crop up, we expect AdTech to maintain an important role. As we expect data protection rules to become stricter, good advertising tech software and tools will have a more proactive role in promoting privacy. Blockchain technology in AdTech may also bring a higher level of data security. Since blockchain transactions can’t be reversed, you don’t have to worry about unfairness or data tampering.

AdTech solutions are behind many of digital advertising’s advantages over traditional advertising. For this reason, advertisers can launch campaigns quickly, while publishers can continuously profit from their ad spaces. As the biggest native advertising platform in the world, MGID efficiently applies AdTech at both ends of the transaction. If you want to benefit from these advantages, sign up on MGID today. With advanced tools, a personal manager and creative specialists, you can leverage AdTech to achieve better results from your campaigns.