What is ad tech industry:

Ten years ago, the ad tech industry was very different from what it is today. Publishers and advertisers no longer have to talk about where ads will go. Ad tech lets big companies like Google and Facebook make billions of dollars, and it also lets online publishers and developers make money from their digital properties. But what is ad tech, and how does it change the way media is traded?

Ad Tech in a Nutshell

is an umbrella term for all the technologies used in advertising. It refers to the stack of software and tools that advertisers, agencies, publishers, and other industry players use to plan and manage their advertising and monetization strategies.

Changes in the ad tech business

Before ad tech, buying media and advertising was a complicated, manual process that took a lot of time and work. Then, in the 1990s, e-commerce grew quickly, and advertising agencies had to help their clients choose websites to put their ads on. This meant doing research, looking at metrics, and figuring out which website would give advertisers the best return on investment (ROI).

When the first ad server was made, that was the first big change. The revolution in automated advertising began when the software was made that could automatically serve ads. The Google Ad Manager grew out of this first ad server.

From there, things moved quickly, and soon the needs of the market led to the development of other technologies. Some of them are Google AdWords, ad exchanges, and real-time bidding.

Demand-side platforms were made because there was a need to improve how ads were targeted and where they were placed. On the other hand, publishers needed to have more control over the prices of their ad impressions and make sure that their ad space was seen by the higher-paying advertisers who wanted it. This gave rise to supply-side platforms. Other solutions, such as data management platforms, data analysis tools, etc., that use user data to make this whole ecosystem work have also come out.

In numbers, here is how Ad Tech will look in 2021:

The ad tech market is worth $134 billion, according to eMarketer.
Splitting up the market:

Google is the biggest single player in the market, but there are other companies that want to join, either with their own technology, like Apple or with other plans.

Since 2020, U.S. companies have spent more on programmatic advertising.

In 2019, e-marketers said that by 2020, 83.9% of the money spent on digital display ads will be digital. The reality was better than expected, and as of May 2021, 86% of the goal had been reached.

This could happen because of the 2020 crisis, which has caused more companies to adopt automated solutions and go through digital transformation. The market will keep growing, and they thought that companies would spend 91% of their advertising budgets on digital display ads and programmatic advertising.

In 2020, companies will spend $129 billion on programmatic ads.

In 2021, this number should reach $155 billion. (Statista)

So, what exactly is ad tech, and why do we need it?

The tools, resources, and software platforms that the demand side and the supply side use to talk to each other, buy and sell ads, and improve advertising efforts are all part of the ad tech industry.

Ad tech platforms help publishers improve how they make money through advertising.
Ad tech is used by organizations to plan and carry out things like media buying and advertising optimization.
Ad tech is how advertisers get their ads in front of people who might be interested in them.

Programmatic advertising wouldn’t be possible without adtech. Ad tech makes it possible to send ads that are very well-targeted and to use omnichannel marketing strategies, among other things.

Think about how advertising was done before the adtech industry was created, and you’ll see why we need it. The goal of publishing ads was to reach as many people as possible without making them feel like they were written just for them.

Brand awareness can be helped by ads that reach a lot of people, but individual viewers don’t care as much about this type of ad. Adtech makes it possible for ads to be shown to the right people at the right time and in the right place. This saves marketers time, money, and work. On the other hand, publishers can make money off of their digital assets while giving end users the best offer for their searches.

CodeFuel’s ad tech solutions

CodeFuel is an ad tech company that helps publishers and app developers find ways to make money. Our solutions include:

Seek out Mediation.

CodeFuel offers optimized landing pages that help publishers make as much money as possible. No matter where you buy your media, our solution can help you bring in more money. The page for making money is completely made for your business and the buying platform you use.

Then, media traders can make money off of search and make more money by using the mediation platform.

Making money from a website

CodeFuel monetization solutions are designed to transform intent into revenue.

With user-intent-based search, you can put contextual ads on your website to make money. By putting the right ad in front of the right audience, you can improve the user experience and make more money.

Search queries

When you do a search, you get a customized search results page (SERP) that is hosted on your website and has paid text ads that have been optimized by search technology.

Shopping ads

When you set up your website with CodeFuel, your users will see ads that are relevant to what they are looking for. For example, if a user clicks on an ad for a new cell phone, the system sends them to a page with ads for this particular model of a cell phone.

Newsfeed

Your website can also have a news feed. It is run by MSN and has more than a thousand high-quality news publishers. This makes your users more interested by making them want to stay on your site longer. In the end, this will lead to more conversions.

App Monetization

CodeFuel uses intent-based search to monetize your mobile app or browser extension. Add search capabilities to your application, which returns a customized SERP with relevant text and shopping ads.

Key features of CodeFuel solutions

Simple integration: easy installation and integration with search engines and ad networks.
HUB Analytics: get the information you need to improve your performance with the analytics hub.
End to End Support: complete account management with strong business intelligence.

Ad Tech Basics

Advertising technology analyzes, manages, and delivers advertisements according to the requirements of the advertiser and target audience. Campaigns look to maximize the effect of ads, ultimately increasing ad revenue.

Who are the actors in AdTech?

The ad tech ecosystem consists of Advertisers, demand-side platforms, ad exchanges, ad networks, supply-side platforms, and publishers.

Publishers make their impressions and ad space available through supply-side platforms and ad networks at ad exchanges. Demand-side platforms bid on those ads through real-time bidding, selecting the most relevant ad types and placements for the target audience. Thanks to tech, this supply-demand loop takes place in seconds, in the time that takes a page to load.

The role of user data

This loop of supply and demand generates revenue thanks to a key component: user data.

Understanding the user behavior and activity on a particular platform is the core of the effectiveness of programmatic advertising. User data is what makes it possible, via sophisticated software algorithms, to deliver the right ad to the right person at the right time.

You can buy user data or you can gather it on your own. But, the goal is to gather actual data from actual people (behaviors, interests, attitudes, and attributes) to be accurate in your targeting. The more you can refine ad targeting to the user, the better your bottom line will look. Why? Because the more the user relates to the ad, the more inclined they will be to click on it. That’s simple.

For publishers, the more your website, application, or extension marketing efforts apply to your target audience, the higher the value of your digital real estate for advertisers.

Advertising Technology for advertisers

Advertisers conform to the demand side of ad technology. Solutions geared for them aim to reach the target audience in the most efficient way and for the lowest possible price. These solutions help advertisers to run and optimize personalized programmatic campaigns, targeting and retargeting potential customers.

The advertiser’s ad tech stack may comprise some or all these types of tools:

A remarketing/ retargeting tool

The fast pace of digital communications and the short attention span of customers means that sometimes a consumer will have interest in an ad but not follow through. Later, the consumer cannot find the ad or recall the name of the company (didn’t happen to us all?). Therefore, retargeting is essential for marketers to push consumers down the funnel.

Prospecting tools

Expanding their customer base is a priority for most companies. Thus, machine-learning-powered prospecting tools help companies find their target audience in ad networks and ad exchanges. The more marketers use the tool, the more the system learns and refines the prospecting process.

Data management platforms

As we mentioned above, leveraging user data is a basic concept of programmatic advertising. Gathering, processing, and analyzing consumer behavior and transactional information makes it possible for companies to pinpoint the ads to the users to the dot.

Demand-side platforms

This is the technology that facilitates finding, bidding, and placing the ads at the right placement automatically. The system works automatically, serving the ads according to relevance for the end-user, the budget, and the criteria specified by the advertiser. Some of the top demand-side platforms are:

Facebook
Rocket Fuel
Amazon
AppNexus

Advertising Technology for publishers

Ad tech for publishers aims to achieve the highest price for the ad placement or impression from the most relevant buyers.

The right supply-side platform, like CodeFuel, can maximize the revenue of your digital property, whether is a website, an application, or an extension by delivering the most relevant ads to high-intent users. It uses contextualization and intent-based technology to ensure the right ad gets to the user most likely to click on it.

This enhances the user experience, increasing the value of the website or app for advertisers, thus ensuring higher bids.

Elements of the Ad Technology Ecosystem

Ad exchange

This solution works as an intermediary in the real-time bidding process. Ad tech providers use ad exchanges to connect DSP to SSP. Publishers and advertisers don’t usually have access to the information shared in the ad exchange. However, their traffic and inventory pass through the ad exchange on the way to the advertiser or publisher, respectively.

Ad networks often buy both traffic and inventory from ad exchanges to sell on their own.

Ad network

Content delivery network

A CDN is a distributed network of servers deployed in multiple data centers. The goal of a content delivery network is to serve content to end-users with minimal latency and load times. CDNS are used in adtech to host ads so they are served to users from the closest server, minimizing the time to load the ads.

Ad server

These were among the first ad tech developments, used to host and store ads, then serve them on the publisher’s website. Nowadays, ad servers are full ad tech platforms for launching and managing ad campaigns, and connecting publishers and advertisers.

Ad servers also collect data on ad performance to optimize campaigns. This technology is what makes it possible for media buying automation.

Agency Trading Desk (ATD)

Is a set of tools used by media agencies to plan, buy and manage to advertise. Organizations that are not yet ready to install a DSP or justify an in-house team use ATD services. The downside of using an agency trading desk is that advertisers don’t have direct access to the inventory.

Demand-side Platform (DSP)

Is a platform that allows users to buy inventory from various ad exchanges and supply-side platforms (SSP). Unlike an ad server, with DSP advertisers don’t need to negotiate prices with publishers. They set their CPM (Cost per Mille), and target preferences, and can launch the campaign. A DSP also lets you set bidding rules and optimization tools that help run your media buying without having to be on top of it.

Supply-side Platform (SSP)

Is the publisher’s side of a DSP. This ad software enables publishers to make available, manage, sell and optimize inventory on their websites and applications. SSP also works based on real-time bidding. That means you don’t need to negotiate rates with advertisers. You only need to embed an ad tag and or a header to the website, which will allow the browser to request an ad for that place in the website. The tag is forwarded to the SSP, which automatically selects a suitable ad from the DSP according to the publisher’s data.

Data Management Platform (DMP)

A data management platform enables advertisers to understand in-depth their audience’s behavior. The DMP collects data from different sources, hashtags, mobile apps, cookies, APIs, etc. The platform uses third-party cookies to define the user profile and develop behavioral targeting in a DSP or ad server.

Customer Data Platform (CDP)

Customer Data Platforms go a bit further than DMP. Not only collects third-party data but also personally identifiable information (PII). Thus a CDP can create a complete profile with a name, company email, and other data, gathered under consent, from analytics tools, Customer Relation Management tools, subscriptions, newsletter signups, transactional systems, etc. This technology will probably be very popular once third-party cookies are phased out by Google in 2022.

Inventory and Ad Quality Scanning Tools

These tools are critical to prevent ad fraud, which affects around 37% of ads. Inventory and ad quality scanning tools help prevent traffic bots, malvertising, and ad fraud by scanning the ads before being served on the website.

How Ad Tech simplifies media trading

Without ad tech, programmatic advertising wouldn’t exist. Automating the media trading process takes the negotiation out of the hands of publishers and buyers, simplifying the process. Ad tech enables advertisers to bid on the most relevant ad placements for their campaign without having to check site by site. Simply input the requirements and budget and the platform will find, bid, and acquire the best ad placements at the best possible price, then serve the ads immediately.

On the supply side, ad tech helps publishers to sell ad space without having to find and negotiate with advertisers. It also makes it possible to sell impressions and inventory in seconds. Thus, ad tech is taking the hassle out of media trading.

The current trends in the Ad Tech Industry

Where is Ad Tech going in the next few years? The industry has grown by leaps and bounds over the last 20 years and is not willing to stop evolving. Here are the top trends that are shaping the ad tech industry:

Artificial Intelligence and Machine Learning

These two technologies help advertisers analyze massive amounts of user data, incorporating behavior analysis to predict the actions of a user online. This data is processed and correlated to serve the right ad according to the user intent at this moment.

Post cookies optimization

Google’s phasing out third-party cookies by 2022 is causing major upheaval in the programmatic industry. Some markets report significant drops in buyer’s bid rates as a consequence. In Germany, buyer’s bid rates decreased by 40%.

Companies are trying to find a viable user identity alternative that doesn’t affect them so much. Some alternatives may include storing data without using cookies by opt-in forms, universal ids, and data pools, among others.

Programmatic everything

When Netflix and Amazon Prime changed the way we consume multimedia content from cable to digital, advertisers needed to transition with them. Now, programmatic advertising is making its way to television, audio, and podcasts to take advantage of the power of data for this segment of the market.

Ad Tech or MarTech?

While often confused, adtech and martech are two different industries. Is true, they intersect in some features and functions but each one has a different approach. Putting it simply is the same difference between marketing and advertising.

Advertising implies using paid media and content for promoting products and services. Marketing is a broad approach to promotion, and inside the marketing mix of activities is advertising.

Make the most of your media trading with CodeFuel

CodeFuel ML and AI capabilities facilitate media buying while improving the revenue for publishers. Getting the right monetization solution is critical for success. Leverage user intent in your digital property by using search, shopping, and news to engage users and improve their experience, serving them ads matched precisely with their queries.

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