What Is Adtech and Why Is It Important?

Modern internet marketing services must use a comprehensive set of practices and digital tools that enable marketers to launch increasingly effective ad campaigns to generate leads faster and cheaper and convert them into real customers. Without them, companies risk wasting huge sums of their budget; moreover, the realization of this ineffectiveness may come too late, causing these companies to miss out on opportunities to better promote their products and/or services. 

So, what digital tools are we talking about? Formally, they’re united by one generic term: adtech. The growing demand for such solutions leaves no doubt: according to Grand View Research, the global adtech market size reached 886.19 billion USD in 2022 and is expected to expand at a compound annual growth rate of 13.7% from 2023 to 2030. And this trend is not surprising, given the growing popularity of omnichannel marketing and some other types of digital marketing, the implementation of which without adtech tools would be impossible (to be more precise, they would be so resource-intensive that it would not pay off).

Therefore, we suggest you talk below about what adtech is and whether you need it.

A few years ago, without advanced tools, advertisements were versatile and were shown to wide audiences through various communication channels. This was convenient for achieving certain marketing goals—for example, increasing brand awareness. Along with this, in view of the lack of sharpening of such advertising for a specific user, such priorities as personalization weren’t taken into account. Thus, this approach was far from cost-effective, requiring serious investments and not always paying off in terms of winning sales.

This is how advertising technology, or adtech, appeared to ensure the relevance of advertising to the audience that sees it. With its help, marketers no longer randomly select platforms for placing ads but automate this process but ensure they are displayed to the right users.

In general, maximizing ROI across the board is one of the primary goals for any business, and marketing is no exception. Therefore, in a global sense, adtech not only simplifies the work of marketers but also opens up new prospects for companies to optimize their expenses (and hence opportunities to invest in their development).

How Does it Differ from Martech?

If you’re interested in incorporating Adtech into your marketing department workflows, you have probably also come across the term marketing technologies, or martech. Therefore, it’s necessary to understand the difference between them so you won’t be misled.

While advertising technology is about reaching new audiences, including the analysis of buyer behavioral patterns and evaluation of the performance of ad campaigns and their optimization, martech focuses on free promotion channels like social media networks, emails, SEO, and strategies that allow companies to deal with already-existing customer bases.

Martech implies the use of tools for email marketing, digital marketing analytics, customer data collection, social media management, marketing automation, content marketing, customer relationship management, and so on. As for Adtech, it uses advanced digital technologies to make advertising cheaper and more cost-effective. This can be achievable through the use of data management platforms, ad exchanges, ad servers, programmatic advertising tools, etc. (all of them will be described in detail in the next paragraph).

Thus, we can say that adtech and martech are not interchangeable, but complementary concepts that can be used to solve different problems of marketers and marketing agencies. By the way, you can also learn more about how to choose a digital marketing agency here.

Key Players in Adtech

The Adtech concept implies two interested parties and, accordingly, tools for these parties: 

• The demand side: advertisers who need to find and rent the most relevant and cost-effective platforms for placing their ads
• The supply side: represented by platforms providing digital space for the advertisement

Thus, all tools representing the concept of adtech are aimed either at unifying and simplifying the interaction between these parties or at optimizing the tasks specific to one of these parties.

Common Methods of Adtech

The digital marketing methods that show the most effectiveness when used in conjunction with adtech are:

• Programmatic advertising. The first method is responsible for choosing the most suitable places, times, user audiences, and other parameters for displaying advertisements. It’s implemented with the help of automation solutions and guarantees that the financial and time resources spent on it will pay off as much as possible.
• Targeted advertising. Adtech is also actively used in targeted advertising, which requires the selection of target audience segments by demographics, location, communication channel, and so on. Thus, the maximum relevance of advertisements for users who see them is achieved.
• Omnichannel marketing. As for omnichannel marketing, here adtech creates a seamless customer experience by synchronizing the digital footprint that a specific user leaves behind, regardless of the type of device they use at a particular moment. This method is extremely effective as users often change their personal devices as they move up the sales funnel (for example, a brand experience may first occur on a PC, but a purchase will be made through a smartphone).

There are also some well-established marketing techniques that can be significantly improved with the help of adtech. These are direct response marketing, which involves prompting users to take immediate action after viewing an advertisement, and performance advertising, which is based on optimizing existing advertising strategies based on data on their previous performance.

9 Types of Adtech Tools

The adtech concept can be implemented in nine highly-specialized types of software, which are intended to simplify the interaction between the key roles of adtech (described above) and optimize the tasks assigned to these parties. Let’s look at each of them in detail.

Demand Side Platforms 

A demand-side platform (DSP) is a software solution that connects advertisers (buy-side) and web resource owners (sell-side) interested in providing their web properties for advertising. Here, advertisers can rent ad spaces and optimize ad placement through proper user segmentation and KPIs that determine the effectiveness of these ad campaigns. Also, such platforms simplify the simultaneous advertising on several digital platforms at once, significantly saving the time of marketing department specialists.

As for the principles of work, these are real-time bidding auctions, where advertisers can, according to the given parameters, choose the offers of website owners and media at the lowest price. 

Supply Side Platforms

Supply Side platforms are designed to sell digital ad space based on predefined parameters and help website owners with their monetization. In particular, to buy views of specific advertisements on a specific website, the advertiser’s side takes part in a real-time bidding auction.

Ad Exchanges

Ad exchanges are digital marketplaces that bring together advertisers and website owners to buy and sell ad space. In particular, as soon as a user enters a web platform where advertising can be placed, such an exchange immediately launches an auction. At the same time, the advertiser’s side instantly compiles analytics about this user to determine the optimal bid for this auction. If this bid wins, the user will see an ad from this specific advertiser.

Ad Networks

An ad network is a set of advertising platforms, united by a single system of advertising. This network helps those who have unused resources or advertising platforms and those who want to monetize their offerings. Advertising networks aggregate these resources, packaging them and selling them to advertisers.

Ad Servers

An ad server is a software that automates the placement of advertisements on websites, excluding the participation of third parties in this process. In particular, such servers are responsible for loading advertisements on websites, focusing on their subject and the number of impressions, clicks, and other data important to ensure maximum return. Also, such platforms collect analytical information about the ads already placed to provide advertisers with analytics that help evaluate the effectiveness of a particular advertising campaign.

Search Engine Marketing (SEM) Platforms

Search engine marketing platforms are used to purchase ads, helping websites appear in search results. Usually, such solutions function without intermediaries. Here, brands can place their ads, which will be displayed when a user performs web surfing. The most famous platform of this type is Google Ads. 

Ad Forecasting Software

With the help of such software, companies get the opportunity to strategically plan their marketing expenses, including the purchase of advertising. In particular, this software provides comprehensive information about the behavioral characteristics of the target audience and their consumption habits and needs—thus, companies can accurately and efficiently budget for ad purchasing.

Data Management Platforms

These platforms collect and integrate first-, second-, and third-party data from multiple disparate sources to make it usable and actionable for advertisers’ marketing campaigns. Both publishers and advertisers can use it for creating audience segments for further content personalization.

Native Advertising Platforms

This type of platform is designed for advertisers to unobtrusively place their content. These ads are very similar to traditional digital ads but imply a more natural presentation to potentially interested users. In particular, it can be advertising in the social media feed or recommendations based on the previous request history of a particular user.

Adtech Benefits

Adtech can significantly optimize the creation and launch of digital advertising campaigns, regardless of the complexity of the chosen strategy and the number of communication channels through which data about the target audience is received. However, along with this global advantage, we can also highlight more specific ones. Let’s find out about them below.

Ad Cost Optimization

The first and probably main advantage of implementing adtech is the more accurate delivery of relevant advertising content to people who may be really interested in it. Content resonates with the audience and is shown in the right time and place. With this set of technologies and tools, companies gain more control over campaigns and more valuable insights about their audiences in comparison with traditional media buying. In this way, companies can save their money and significantly increase their ROI.

Boosting Campaign Efficiency

Thanks to adtech, companies get a powerful tool to evaluate the effectiveness and payback of their advertising campaigns. For example, ad forecasting software provides end-to-end analytics about the intentions and desires of the target audience, while ad server platforms provide advertisers with an outside view of how their ads work and where and when they are displayed. Thus, companies spend less time on the implementation of resource-intensive marketing tasks and gain better results on their campaigns.

Improving Campaign Monitoring

Advertising technology gives companies the ability to plan and measure the effectiveness of their advertising campaigns in ways that were previously unavailable. In particular, the use of ad servers provides them with real-time data about their ads. Thus, media buying becomes more cost-effective, and business processes are focused on maximum return.

Getting Unobvious Insights from Marketing Funnels

Adtech is not about advertising for wide audiences. On the contrary—the tools that embody this technological concept allow companies to personalize their offers. These solutions also provide unobvious insights into user behavior patterns at each stage of the sales funnel, helping marketers come up with strategies that push them more smoothly to make a purchase and return to the brand.

Better Targeting and Segmentation

With adtech tools, brands can greatly optimize the targeting and segmentation of their audience. In particular, because brand consumers may be at different stages of the sales funnel, retaining them and moving them further down the funnel may require different techniques. This allows companies to move away from the outdated approach of launching one-size-fits-all campaigns, as well as achieve better and more accurate results in providing attractive offers to the audience.

NIX Case: ML System for Real-time Bidding

The client owns a mobile app retargeting product and data management platform for global brands. The product provides a comprehensive marketing funnel for retention, retargeting and reengagement of mobile app users, improving conversion rates and delivering a personalized customer experience.

Our task was to implement an ML-powered, real-time bidding system that could process huge amounts of data simultaneously. Moreover, we also needed to streamline data management as well as improve the bidding process and automatic report generation. 

Thus, the NIX team’s scope included the following activities: 

• Data aggregation. To achieve better efficiency in the bid request processing, we aggregated the data into datasets using Athena, and then transferred it to MySQL, DynamoDB, and Redis databases.
• Data monitoring. We used Kibana for data log monitoring and Apache Druid for boosting the performance of systems for data tracking (both new and historical).
• Automated reporting. Our team implemented a reporting tool and added support for some external APIs for sending them via email or Slack.
• Development of a custom module for handling errors. We built a custom Scala-based module for handling business logic errors and preventing financial losses.
• Bidding process improvement. Our experts optimized the core logic of the bidding process with the help of Python, Athena, and MySQL.

You can find out more about our ML system for real-time bidding here.

Also, you can learn about our success stories in digital marketing and advertising here.

How to Know if You Need Adtech for Your Business

With the growth of user data, which can be useful in planning, creating, and launching marketing strategies, adtech solutions have become indispensable for the vast majority of businesses who promote their products and/or services.

On the other hand, incorporating advertising tech can be costly and may be questionable for some companies, especially when it comes to digital marketing for small businesses. So let’s see if you should implement adtech in your company.

In general, the main goal of the emergence of Adtech tools and technologies was a clear distribution of responsibilities between the parties involved in the implementation of digital advertising. The first side is advertisers, that is, companies that want to promote their products through advertising. The second side is the owners of digital platforms for placing this advertisement. And finally, the third side is intermediaries who act as a link between the first two parties. They ensure the smart and cost-effective selection of ad placements.

In general, advertising technologies can be especially useful for the following standard marketing tasks.

Evaluating the Effectiveness of Marketing Efforts

The times when marketers were guided solely by their intuition when launching an advertising campaign are long gone, and today, for this, they have multiple confirmations of effectiveness of their marketing activities. In particular, these can be KPIs like cost per impression (CPI), cost per action (CPA), cost per click(CPC), and so on. These numbers will show whether your ad efforts need enhancement or not. In turn, demand-side advertising tech platforms provide marketers with up-to-date numbers that they can use for comparison and analysis.

Launching Targeted Ads

Advertising technologies can ensure that ads are delivered directly to the target audience according to pre-planned schedules and context. This minimizes the number of manual tasks that a marketer must perform and reduces the risks associated with the human factor.

Getting Valuable Insights about Users on Various Types of Devices

User promotion through the sales funnel often occurs with the participation of different user devices. Thus, without specialized tools for collecting user data, it would be quite difficult to cope with the tasks of its synchronization, analysis, and ad targeting. Adtech platforms solve this problem very quickly and efficiently by synchronizing user-specific data between devices.

Reducing the Cost of Launching Digital Ads

Even if, at some point, the placement of your advertisement on a particular web resource brought high traffic to your website, this doesn’t mean that they remain the same to this day. At the same time, manually monitoring each ad is a very time-consuming procedure that marketers often neglect to the detriment of the company. To avoid these risks, you can use ad technology. This will help you increase the return on your advertising investment and thereby open up new opportunities for planning the financial and time resources of your marketing department. It will also help reach new segments of the target audience without the risk of increasing the cost of discovering them and personalizing ads.

Implementation of Multichannel and Omnichannel Marketing

These relatively new types of digital marketing have become available precisely because of the development of tools that would allow marketers to instantly process huge amounts of disparate user data coming from different digital channels. In particular, adtech tools can ensure invaluable assistance in providing a seamless client experience that would be available on all channels of communication with the client. Moreover, due to the large volumes of information, it’s impossible to synchronize manually. In turn, thanks to multiple points of contact with the client at the right time and through different but relevant channels, companies using adtech manage to achieve the best results of their marketing strategies with minimal expenses.

Final Thoughts

As you can see, the introduction of ad technology allows companies to establish a stronger connection through their advertisements, spend less time and physical and resources on their implementation, and get better results on their ad marketing campaigns in general. 

At the same time, the vast majority of companies cannot use ready-made tools available on the market due to their lack of customization for their individual workflows in marketing departments. This provokes some trouble associated with the need to turn to custom development. If you are interested in creating a custom adtech solution, feel free to contact us. We will integrate advanced technologies into your product to help you achieve your marketing goals faster and more efficiently than ever before.