Ad tech is perhaps the most crucial development in the advertising industry over the last three decades. Ad tech, and its role in monetizing websites and apps, have driven Google and Facebook to 10-figure revenues and enabled thousands of brands to become household names.
This article covers everything publishers need to know about ad tech, from the history to the main types of software available in their journey to creating revenue from their sites.
Exactly What is Ad Tech?
Ad technology, or ad tech for short, is the umbrella term encompassing all the software, platforms, and emerging technologies used by agencies, advertisers, and publishers in the strategic roll-out of their digital advertising campaigns.
It includes tools that allow brands to target, deliver, and analyze their marketing efforts.
Digital advertising can be a complex and costly endeavor, particularly for those new to monetization efforts. For publishers to ensure they roll out advertising campaigns that are cost-effective, they should be looking to partner with ad tech providers that have the required technical and logistical expertise to ensure maximum return on their advertising investment.
History of Advertising Technology
Since the first digital advertising campaign appeared online in 1994 on wired.com, there have been several advancements in the online advertising space, not least in the introduction of ad tech, which has revolutionized the ad serving process.
The ad tech revolution began in 1995 when FocaLink Media Services developed the first-ever ad server. This was followed by the success of Doubleclick, a combined ad network and ad server which would grow up to be Google Ad Manager.
Early ad exchanges begin to appear in the mid-2000s, with DSPs, DMPs, SSPs joining the eco-system more recently.
These advancements have given publishers the ability to automate, optimize and maximize ROI on their advertising dollar.
Programmatic Advertising in Ad Tech
Programmatic Advertising, the process of automatically buying and selling digital advertising space, has been a game-changer when it comes to ad tech solutions.
Before the introduction of programmatic advertising, advertising, ordering, setting up, and reporting on ads all had to be carried out manually.
Programmatic advertising offers the following benefits:
- Ability to scale. Programmatic advertising allows advertisers to reach a large audience by purchasing ad space from any ad inventory available, rather than being limited as they might have been before.
- Real-time flexibility. Advertisers can make real-time adjustments to ads based on their impressions, and they can take advantage of a broad range of targeting criteria.
- Targeting capabilities. With superior targeting, an advertiser's budget can be put to better use and spent more efficiently.
- Efficiency. The process is more streamlined, and more relevant ads are served through targeting. Access to a large pool of publishers means advertisers can get a better return on their investment, while publishers can maximize their revenue too.
To learn more about how Publift leverages ad tech to grow our client’s revenue, check out our case studies.
Ad Tech vs. MarTech
Ad tech is often mistaken to be the same as marketing technology, and while the two intersect, there are distinct differences between the ad tech and mar tech industries. While most people consider advertising to fall under the larger banner of marketing, others see them as separate but interconnected specializations.
Below are some of the significant differences between ad tech and mar tech.
Types of Ad Tech Software
The ad tech landscape consists of all the players in the ad tech ecosystem interconnected through an intricate web. Connecting the leading industry players of advertisers and publishers are the ad tech solutions needed for these agents to deliver their digital marketing efforts.
To achieve their specific goals, they use different tools and platforms.
In the past, ad servers were used to host and store ads and serve them on publisher’s sites. Today, ad servers have evolved as platforms that combine several services; they launch ad campaigns, manage website placements, and match publishers and advertisers.
Ad servers also work to collect key ad data metrics to enable publishers to optimize their campaigns successfully.
Ad servers enable the entire media buying and selling process to occur with the need to change the HTML code of web pages.
There are two types of ad servers; first-party ad servers that publishers use to sell inventory, and third-party servers that are used by advertisers to launch, manage and optimize their digital advertising campaigns.
Demand-Side Platform (DSP)
Demand-Side Platforms are an interface allowing users to buy ad inventory from various ad exchanges and supply-side platforms (SSPs). They play an integral role in real-time bidding (RTB), where they are the receiver of the browser’s request for ad serving.
This ad tech tool offers more automation options than ad servers. Advertisers can set their targeting preferences, CPM, and launch their campaign without having to negotiate prices with the publishers directly.
Furthermore, DSPs offer bidding rules, multipliers, and other optimization tools that allow advertisers to automatically optimize their campaigns
There are two choices when it comes to DSPs:
- Self-Serve DSPs: Self-serve DSPs are typically offered by ad tech providers and are the quickest way for advertisers to get started in trading ads programmatically. Self-serve DSPs allow advertisers to trade ads and optimize campaigns independently without any assistance from third-party professionals in the ad tech industry.
- White Label DSPs: White Label DSPs are a SaaS platform that can be customized and branded as the advertisers own. Unlike Self-serve DSPs, the white label solution allows integration with custom SSPs, giving advertisers complete control over their campaigns, including where their traffic comes from, and access to all data transmitted from publishers.
Supply-side Platform (SSP)
Supply-side platforms sit on the other side of the demand-side platform exchange. SSPs are ad tech software leveraged by publishers to manage, sell, and optimize inventory on their websites and mobile apps.
As with DSPs, SSPs work on an RTB protocol, whereby publishers include an ad tag or a header on their web pages, so each time someone visits their website, an ad request is sent.
The tag is sent to the SSP, which processes the publisher’s data and then sends it on the DSP to request a suitable ad.
The DSP matches the publisher’s audience with the advertiser’s targeting, selecting the highest bidder in the process.
Agency Trading Desk (ATD)
An agency trading desk (ATD) is a simplified form of a DSP for users that may not be ready to invest in a DSP or in-house ad tech team.
An ATD comprises a whole toolset provided by media agencies for planning, buying, and managing omnichannel marketing campaigns. An ATD employs staff that acts in place of an in-house media buying team. This means, however, that advertisers using an ATD don’t have direct access to the ad inventory.
When online advertising exploded on the internet in the late 90s and early 2000s, websites began to sell an increasing amount of ad space to advertisers. Before publishers knew it, they were dealing with millions of impressions and thousands of ad agencies. From this demand, ad networks were born; companies that aggregate websites with comparable inventory into bundles, essentially centralizing the ad purchase process. The development of this advertising technology allowed advertisers to buy a large number of ads and meet their impression targets.
Ad Exchanges are the conduit between DSPs and SSPs and are generally leveraged by large ad tech companies in the ad serving process. While advertisers and publishers will rarely access the ad exchange, their inventory will generally pass through this platform on its journey to the ad space.
Data Management Platform (DMP)
Data Management Platforms (DMPs) are a form of technology that allows a company to understand its consumers’ behaviors. Generally, a data management platform will allow for the collection of consumer data from several sources:
- Tags on websites
- Tags on mobile apps
- S2S integrations
This data is the essential information available to marketers; it allows them to optimize their advertising to deliver highly relevant content to their consumers. Specifically, data in ad tech can be used for:
- Campaign optimizations
Customer Data Platform
The CDP Institute defines a Customer Data Platform as ‘packaged software that creates a persistent, unified customer database that is accessible to other systems.’ Essentially a CDP is a single system that centralizes user data for use in ad tech campaigns. CDPs collect both third-party data and first-party data obtained by consent.
With Google phasing out third-party cookies in 2022, CDPs will likely see increased adoption as ad tech vendors and networks will have to rely on first-party data collection to obtain user data.
Inventory and Ad Quality Scanning Tools
Despite increased industry awareness and Google penalties, ad fraud is still prevalent in the ad tech business, with certain studies showing that around 37% of ads are impacted by ad fraud.
Malicious advertising- or malvertising-spreads viruses and compromises systems, while some traffic sources are almost entirely driven by bots.
Inventory and ad quality scanning tools help combat these threats by verifying the ad- and traffic- legitimacy before it is served to a website.
Ad Tech Industry Trend
The use of ad tech has skyrocketed over the past few years and shows no sign of slowing down. As the industry continues to expand, media agencies will be able to take advantage of increased and cleaner integrations, more data sharing, and extended reach across all advertising channels.
Publift makes programmatic advertising easy for publishers with our Fuse platform. Whether you are looking to monetize a single site or a significant publishing network, we can help lift your revenue with our next-level ad tech solutions. With an average 55% growth in net revenue within six months of using Fuse, we help our clients get results.