What Is AdTech?

And why is it so important?

October 12, 2022
10 mins to read

Good luck trying to run any kind of modern advertising campaign without AdTech.

AdTech has now become utterly ubiquitous to the modern marketer but… it’s still a little understood phrase, with a lot more included (and not included) than people realize.

It’s vital for anyone creating a digital advertising campaign as well as anyone looking to buy, manage and/or measure all of an organisation’s digital efforts and data.

And wow does it generate a lot of data on your audiences!

Why Is AdTech So Important?

AdTech has been designed specifically to make it easier for brands and advertisers to reach the most amount of people, in the most efficient manner, for the highest levels of ROI.

In recent years the buying and selling of ads and ad space has become exponentially more complicated, with many AdTech solutions being released to help streamline the processes.

Most, if not all, AdTech tools allow an advertiser to control precisely who see’s their ads and when. Take a billboard for instance. An advertiser pays to place their ad but has no control over who sees it… including many people who likely won’t be interested in the slightest.

AdTech allows for hyper-specific and targeted advertising, offering advertisers huge savings in both cost and efficiency.

It lets organizations buy impressions to targeted audiences across multiple different sites and platforms. It also allows marketers to integrate their campaigns, connecting social posts, to email campaigns to website visits to lead gen and ultimately to conversions.

It’s biggest benefit however is in allowing advertisers to maximize their budgets by only showing ads to engaged audiences likely to respond positively.

What’s The ‘Tech’ In AdTech?

It’s a good question as there’s a lot of tech included in AdTech.

Tech, tools, platforms, demand-side platforms, supply-side platforms, software, agency trading desks, ad servers, ad networks, display networks and a whole host more.

  • Programmatic Advertising: This is a type of AdTech used for the buying and selling of digital ads.

It’s an automated process that allows advertisers and marketers to buy digital ad space across the internet, mobiles, apps, videos and social media.

It utilizes a lot of ML (Machine Learning) and workflow automations in order to deliver the most relevant to audiences and ROI to the advertiser.

  • DSP: DSP stands for demand-side platforms and is a type of software used by marketers and advertisers to buy video, display and mobile ads through real-time bidding auctions.

Think of DSP software as a single, highly organized marketplace where advertisers can connect with a vast array of publishers' content and inventory through something called SSPs (supply-side platforms… but more on those in a minute!).

As you can probably guess from the name, the use of DSP revolves around demand. Demand from advertisers seeking inventory that will allow them to more efficiently connect with their target audience, at the right time, within a set budget.

  • SSP: SSP, the flip-side to DSP, stands for supply-side platforms and allows publishers to sell ads programmatically. SSP’s offer buyers access to a plethora of formats, connecting to an ad exchange which will showcase a publisher’s inventory and allow it to be bid on via a DSP.

Without any manual intervention, the SPP can then select the highest bid and send through the creatives (banners, video etc) to a publisher.

  • Ad Exchanges: Sitting in the middle of DSP’s and SSP’s, Ad Exchanges are marketplaces in which the buying and selling of digital advertising spots are automated.

They’re ran as real-time auctions (much as google ads are) but allow for both the buying and selling of digital adverts and the space to host them, across all device types.

  • SEM Platforms: Probably the best known Search Engine Marketing Platform (SEM Platforms) is Google but other search engines like Bing also operate in the same way.

They allow advertisers to purchase ad space based on highly specific and audience relevant keywords.

  • DMP: DMP’s (or Data Management Platforms) are a piece of tech used in both AdTech and MarTech (there’s often a lot of overlap between the two).

They act as a place to collect, store and analyze audience data from any and all sources.

That data can then be used to segment audiences into a variety of cohorts according to pre-defined behavior patterns.

  • ATD: An ATD, or an Agency Trading Desk, is a tool or a collection of related software used for media planning and buying by, as you probably guessed… agencies.

ATD’s almost always act as an additional layer of software over a DSP that enables agencies to efficiently manage their clients programmatic purchases across various channels, with analytics on the different ad-buys that may occur through specific campaigns.

  • Ad Server: Finally, an Ad Server is the tool that serves ads to websites or apps and then reports back on their performance.

Ad Servers host the creative assets used in ads and optimize which ad is placed where and when using what creative through automation.

What’s The Difference Between AdTech And MarTech?

As discussed in our previous MarTech article, MarTech (or Marketing Technology) focuses on reaching audiences via organic (unpaid) or owned channels belonging to an organization such as social media, apps or their website whilst AdTech focuses more specifically on reaching potential customers through various paid channels on third party platforms.

The Benefits Of AdTech

AdTech’s ‘core’ function is to make life easier for advertisers by simplifying, optimizing and improving the buying and selling of digital ad campaigns.

Becoming more and more complicated all the time, ML (Machine Learning) now plays a major part in most AdTech, processing enormous swathes of data to further optimize campaigns for their respective audiences.

Breaking it down further, AdTech:

  • Better Utilizes Ad Spend: It does this by allowing advertisers to target hyper-specific (i.e. more relevant) audiences with content tailored to them, based on both first and third-party insights. That means there’s less ‘waste’ of advertising budgets compared to more traditional advertising methods.

  • Improves Operational Efficiency: AdTech empowers advertisers to better plan and measure all their activities, assigning specific and exact ROI to each. It does this by providing a birds eye view of the entire gamut of their activities, allowing them to adjust and optimize their processes and thus saving both budget and resource.

  • Provides Granular Insights To The Marketing Funnel: As we’ve already mentioned, AdTech does away with the one-size-fits-all approach to advertising, allowing organizations to tailor their message to very specific audiences within their marketing funnel. That granular ability to reach people at varying stages of their buying cycle means people can be targeted, retargeted and engaged at all steps in a discrete and personalized way, allowing lead conversion to soar.

Summarizing then, AdTech is a powerful tool that allows organizations to reach specific audiences incredibly quickly, with targeted messaging, whilst collating huge amounts of data on what works and what doesn’t, often using ML to optimize on-going efforts.