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.

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:

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.

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.

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.

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) 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.

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 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.

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 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 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 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.

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.