What is AdTech? Advertising technology in a nutshell
Advertising technology, or AdTech for short, refers to technologies that can be used to plan and analyze marketing and advertising campaigns. AdTech solutions include analytics and advertising tools that help with everything from purchasing ad space to analyzing target group data. When implemented properly, ad technology can improve the scalability, automation and profitability of your ad campaigns.
The term “AdTech” is used to refer to the fields of digital advertising and advertising technology. Ad technology refers to a wide range of tools, software and services that are designed to optimize ad campaigns in the context of digitalization. It’s the foundation of successful online ad campaigns.
- Difference between AdTech and MarTech
- The basics of AdTech
- Other kinds of AdTech
- Summary of the advantages of AdTech for companies
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Difference between AdTech and MarTech
Before we take a closer look at AdTech, let’s take a minute to distinguish it from marketing technology or MarTech for short. While there are some areas of overlap, there is a clear difference between advertising and marketing. The most important distinction is that marketing refers to the strategies that a company uses to position its products and services on the market, set itself apart from the competition and build customer loyalty. Advertising, on the other hand, serves to consolidate a business’s market position, generate visibility, reach customers and specific target groups and create efficient ads.
Here’s a summary of the most important differences between AdTech and MarTech:
Mostly automated, IT-heavy campaigns (see also programmatic advertising) based on the one-to-many principle. Meant to reach large groups of customers with methods like display marketing.
In addition to automated marketing campaigns, MarTech also uses tools for personalized marketing, email marketing and direct contact with the customer. Based on one-to-one principle.
Often offered by external agencies as a service.
Can usually be implemented in-house using CRM and content/marketing management systems.
Frequently uses targeted advertising (e.g. using cookies and data mining).
Also uses personally identifiable information (PII) to strengthen customer loyalty.
Ideally, advertising will emerge from a marketing strategy and provide data on customers and performance, which can then be used to optimize the marketing strategy. The holy grail of marketing strategies is a harmonious connection between AdTech and MarTech, in which they build on each other. Separating the two too much can lead to problems with the efficiency and flexibility of data, advertising, and marketing campaigns.
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The basics of AdTech
The range of advertising technologies that fall under AdTech is huge. Some of the most important elements of it include technology and software such as:
- Programmatic advertising
- Demand-side platforms
- Supply-side platforms
- Agency trading desks
They are often offered as services or managed services by agencies. Let’s take a look at each of these foundational elements in detail.
Programmatic advertising (PA) is used for the automated buying and selling of digital ads and ad space across platforms and devices. Some of the advantages of PA are flexible scalability and planable reach for ad campaigns, real-time ads, and transparent, target-group oriented measures of success.
The idea behind PA is simple. Every time suitable ad inventory becomes available, companies can use programmatic buying and real-time bidding (RTB) to automatically buy ad space and then use real-time advertising (RTA) to display ads. Algorithms, machine learning, data mining and automated workflows are thus used to effectively implement ad campaigns and automatically adjust them for target groups and purchasing behavior.
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Demand-side platforms (DSP)
Demand-side platforms are software solutions that businesses can use to buy ad inventory such as video ads, display ads, and mobile ads. They work programmatically using real-time bidding. In order to satisfy the demand for ad space, advertisers turn to networks, inventory, and ad exchanges for online advertising. DSP software and direct integration make it possible for ads to be published based on their target group and how lucrative the ad space is, and displayed on several websites at once. The most important thing for advertisers is to buy the right ad space for their target group while staying within budget. Some of the biggest DSP players are Amazon DSP, Google AdWords, Adform and The Trade Desk.
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Supply-side platforms (SSP)
Supply-side platforms (SSP), on the other hand, provide software tools for the supply side, i.e. publishers that offer automated digital ad inventory. So we’re talking about the programmatic sale of ad inventory. Publishers and SSP can specialize in certain types of ads and inventories or offer a diverse selection to advertisers. Publishers use SSP software to network with ad exchanges and make offers available for auction. The bids coming from DSP then determine which advertiser gets the ad space. Thanks to SSP, publishers can reach more advertisers. Advertisers, on the other hand, can use their budget efficiently thanks to bid ranges and versatile ad inventory.
Agency trading desks (ATD)
Agency trading desks (ATD) are tools and services that are closely connected to the demand side platform. An ATD has to do with the planning and purchase of ads using a DSP. Important components include the integration of inventory sources, ad networks and ad exchanges, as well as measuring the success of ads. The ATD is used to plan, prepare, implement and optimize ad strategies and campaigns with integrated DSP. The aim is to use your advertising budget as efficiently as possible and place ads on different channels as successfully as possible.
Ad servers are closely connected to ATD. They’re used by advertisers, publishers and agencies to save ad inventories and ads, and determine where and how an ad is displayed. Ad servers can also be used to evaluate the success of an ad campaign.
Other kinds of AdTech
AdTech covers a wide range of tools and platforms, including these other forms of advertising technology:
Ad exchanges are online marketplaces for buying and selling ads. They connect publishers and advertisers on ad exchange networks and servers, where publishers can offer ad inventory and advertisers can set a budget for real-time bidding.
Data management platforms (DMP)
Data management platforms are used to collect and manage data related to, for example, ad inventory and the sale of ads. Using DMP, complex data sets can be collected, processed and evaluated with statistics and analyses. Well-organized data management combined with data mining tools can be used to generate buyer personas, omni-channel marketing and predictive analytics, and thus achieve more efficient ad campaigns.
Search engine marketing (SEM)
Strategically placed keywords will often determine whether an ad is seen, a target group is reached and a product is bought. Search engine marketing (SEM) makes it possible to acquire ad space in connection with valuable or popular keywords and thus to reach new target groups or increase reach. SEM can also be implemented in connection with search engine advertising (SEA) and search engine optimization (SEO). To learn more, check out our SEO glossary.
Tag management system
Tag management systems manage, organize and update marketing and ad tags using automation and container logic. They ensure the whole source code does not have to be adapted when new ad campaigns are launched or a website is redesigned.
Native ad platforms
Native ad platforms aren’t so much a tool as a measure for integrating ad content organically into web content, e.g. as recommendations, tips and in-feed ads.
Ad forecasting software
Ad forecasting software enables you to optimize the use of your advertising budget. It evaluates the purchasing and usage behavior of customers, gives you an overview of expected costs for ad inventory and ad placement and offers budget optimization using projected goals and expected costs.
Summary of the advantages of AdTech for companies
The money that companies spend on online ad campaigns shows how important online advertising strategies are. But the world of e-commerce is becoming more and more complex. Implementing ads in an effective and cost-efficient way requires flexible, high-performing structures. AdTech tools enable you to master the complexities of e-commerce, identify and engage target groups on various channels and profitably place your ads. Efficiency, cost savings, scalability, and networking are thus the biggest advantages that AdTech has to offer.