All You Need to Know About AdTech in 2021

“Innovation is the only way to Win”- Steve Jobs.

Over the past couple of decades, personalities like Steve Jobs have been harping about innovation being the only way. Technology and innovation are the mantras for the success and growth of any organization, and we can see the deep roots they have taken in almost all industries, AdTechs included.

Today, technology is no more about just innovation. It is also critical to reinvent to remain relevant and even stay ahead of the competition. Like all industries, the landscape in advertising and marketing industries has seen a drastic change.

While there have been many changes that this industry has witnessed over the years, it wouldn’t be wrong to state that tech software development is by far the most significant and essential change seen by the industry to date. To understand this better, let us start with the basics and understand what AdTech is first. This will help us understand the future of AdTech in 2021.

Understanding AdTech

AdTech is a term coined by combining Ad from advertisement and Tech from technology. In simple terms, AdTech refers to the use of various technologies, tools, and software used by advertisers, publishers, ad agencies, and various other industry players for managing their advertisements across multiple channels. AdTech technology helps control advertisements across channels, but these tools also help strategize, plan, and monetize activity.

Automation of digital advertisements and their optimization are some of the boons of AdTech advertising. Adroll, Tapad, MediaMath, Oomph, etc., are some famous AdTech examples. In a nutshell, AdTech helps increase the effectiveness of advertisements, thus helping to reach a larger target audience within the ever-decreasing budgets.

The World of Programmatic

One of the most significant solutions under the AdTech ecosystem is programmatic advertising. It uses automated technology to allow publishers and advertisers to automate their buying and selling of; so significant has been the impact of Programmatic AdTech that whenever someone thinks of a technical advertisement of AdTech, they think of Programmatic AdTech. Thanks to the advent of programmatic AdTech, the advertisers or agencies do not need to sit through endless meetings to discuss ad size, volumes, rates, etc.

With the help of programmatic AdTech, advertisers can automate the selection of their target audience. These audiences, too, are selected using specific metrics obtained by passing data through certain algorithms.

In simple words, advertisers are today able to reduce their cost and risk by purchasing digital impressions targeting a specific audience across various sites instead of just betting on one side, as was the case traditionally. This brings us to the next question.

What is Programmatic Ad Buying?

In simple words, the use of automation for buying traffic online and of digital advertising space by the advertisers are called Programmatic ad buying. Using data insights and algorithms to deliver suitable advertisements to the right audience at the right time is the critical feature of programmatic ad buying. Programmatic ad buying can broadly be classified into three categories:

Real-Time Bidding (RTB)

As the name itself suggests, this type of programmatic ad buying involves deciding on the inventory prices through a real-item auction of digital impressions. This ad-buying system is open to all advertisers and publishers to participate and is considered the most cost-effective way to buy media impressions.

Private Marketplace (PMP)

In this form of programmatic ad buying, the prices of the inventory of digital impressions are determined by a real-time auction. However, the audience that is allowed to bid for the impressions is usually restricted, and participation is generally on an invite-only basis. In other words, it is still a marketplace for bidding of digital traffic; however, not open to all.

Programmatic Direct

Here, the publisher avoids the whole process of the auction of the media inventory and instead sells the merchandise directly to an advertiser or multiple advertisers at a fixed cost
per mille (CPM).

What is The AdTech Ecosystem?

Like all ecosystems, the AdTech ecosystem is a complex amalgamation of various tech solutions and specialized systems that assist with today’s tech advertising. With the development and growth of technology, the advent of AI and automation, the ecosystem is highly complex and sophisticated.

Broadly, the entire AdTech ecosystem can be classified under five major heads:

Demand-Side Platforms (DSP)

Using DSP, advertisers can automate their ad buying process using a single interface. It allows advertisers to purchase impressions from multiple sources within milliseconds.

Supply-Side Platforms (SSP)

Publishers use a tool to sell ad impressions to various DSPs, ad exchanges, and ad networks through the integration of multiple technologies.

An Ad Exchange

These are digital marketplaces for buying and selling unsold ad impressions to publishers and advertisers. This platform works on a real-time bidding system for determining the price of the digital impressions and is usually automated.

Data Management Platforms (DMP)

DMP’s help the users store and analyze the data about the various ad campaigns and their audiences to help media buyers and publishers take more calculated data-oriented decisions.

Customer Data Platforms (CDP)

A CDP helps data from other systems and helps build profiles of the customers for targeted advertising.

AdTech Trends to Watch Out For

Over the past few years, we have already seen a lot of changes in the industry. With the government and various browsers adopting stricter privacy regulations and the global pandemic situation, the changes are happening faster too. Given these circumstances, here are some of the AdTech trends of 2021.

Large scale consolidation

With the growing demand for integrated solutions and ever-increasing competition, the market could witness a large-scale consolidation in the AdTech space.

The rise of connected TVs

The global lockdowns due to the pandemic have drastically altered consumer behavior leading to increased CTV usage and advertisement spending.

AI leading the way, all the way

With the data war on the rise and the need to get to know the consumers better and faster, marketers’ dependence on AI is already increasing and will increase further, especially in areas like strategy and creativity.

Change is the only constant in life. AdTech is no exception here, and with the growth, this industry is witnessing, more chances are likely to happen. With technology changing so rapidly, AdTech is a space to keep a keen eye on.

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