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Ad Technology: What It Is and Why It Matters to Marketers

Ad technology, or ad tech, is an umbrella term that houses all systems related to internet ads, comprising ad networks, ad exchange, ad servers, and more.

While some aspects of ad tech are purely focused on direct sales, others are aimed at improving an advertiser’s marketing efficiency. Owing to its broad nature, it is often difficult to explain ad tech in a few words — which might explain why most advertisers heard of it without knowing what it truly means.

 

In this article, we will explain the important aspects of ad tech, i.e., what it is, how it evolved, its types, and its applications. We’ll also look at ad tech on a micro-level, touching on the risks associated with it and how to counter them. 

 

What Is Ad Technology?

Ad technology is the loosely coined, often-misunderstood name given to software, hardware, and services that facilitate tracking online marketing campaigns and analyzing the behavior of users on websites. These systems aim to improve the efficiency of online advertising by studying the performance of different ads for varying audiences in large public advertising spaces.

Most advertising technology deals with collecting and analyzing data about the activities of users on the web.  This remains the foundation for the improvement of ad creation, ad delivery, and more. Thanks to advancements in ad technology, we can manipulate the same data to deliver personalized ads to users, which was not as in-depth a few years back. Not to mention that it provides advertisers and media platforms with tools that increase their profit, hence making ad tech indispensable to today’s web advertising. 
 

A Brief History of Ad Technology

When internet ads started popping up in 1994, banner ads and text-based ads were generally only placed at the top of web pages. It was a simpler process: advertisers would buy media for needed time slots, and their ads would run for specified timeframes. If you wanted to run an ad from 10–15th October, for example, all you had to do was buy an ad space for five days.

Even so, the process of purchasing those spaces was inefficient. Advertisers couldn’t put up ads quickly, losing out on opportunities, and the complications of running ads grew as the internet became more populous. To resolve these and many other problems, ad technology was born. Real-time bidding (RTB), for instance, made it possible for websites to run bid-based ads, rather than on time slots. Instead of selling media piecemeal, publishers would sell ads based on the attention span and engagement of the viewers.
 

Types of Ad Technology

① Media-related Ad Technology

② Advertiser-related Ad Technology

③ User-related Ad Technology (Target Analysis)
 

Media-related Ad Technology

Media-related ad technology is a collection of software, hardware, and services that allow media companies — and, by extension, advertisers — to place ads on user social feeds, websites, and other channels based on demographics and personal preferences.

Ad Network

An Ad network is a company that uses multiple media channels — websites, social networking sites, apps, etc. — to deliver ads. Members of an advertising network can receive media in batches, eliminating the need to make separate contracts and delivery settings for each ad space. While individual media traffic — or the number of clicks each ad generated — can be little, one can still expect immense results because of the wide range of media platforms involved.

Ad Exchange

An ad exchange is a marketplace that oversees the exchange activities between advertisers and publishers regarding ad space inventories. Often confused with ad networks - which manage multiple media, ad exchange manages multiple ad networks at a time. An ad exchange also allows advertisers to pay fixed prices per impression in an ad space, which allows them to better conserve their ad delivery budget.

SSP

SSPs (Supply-side Platforms) are systems created to help publishers manage thousands of ad spaces at once. Also called sell-side platforms, they optimize ad delivery for networks that pay the highest prices, allowing publishers to maximize ad revenue. 
 

Advertiser-related Ad Technology

Advertiser-related ad tech includes software tools used by advertisers in social media marketing, targeting, customer acquisition, and many other functions.

DSP

DSP (Demand-side Platform) is to advertisers, whereas SSP is to publishers. The automation systems maximize ad cost-effectiveness by optimizing the distribution of advertising at the lowest price possible. Examples include Amazon Advertising Platform and Facebook Ad Manager.

RTB

RTB (Real-time Bidding) is a method in which publishers auction advertising spaces in real-time, with the highest bidder getting the spot. During this process, advertisers bid for ad spaces based on the number of impressions/clicks a particular spot is expected to generate.

Retargeting

Retargeting, also known as re-marketing, is an ad system that allows advertisers to display ads to users who have previously visited the advertiser’s site. Advertisers can even customize their ads based on these users' past browsing habits. 
 

User-related Ad Technology (Target Analysis)

User-related ad tech deals with data-driven advertising. User-generated data, in combination with statistical algorithms, are used to optimize ads based on certain demographics. 

DMP

DMP (Data Management Platform) is an optimization tool that collects and analyzes data from third parties and in-house marketing systems. It packages and segments details about users, feeding an advertiser with customer profiles, each suited for a particular campaign. With the DMP depository, you can, for example, target customers who have previously purchased products from your site.
 

Risks Associated with Using Ad Technology

Technology brings about a rapid digitalization of advertising, improving efficiency in ad delivery. With such digitalization, however, newer problems arise.  The most prominent of which is ad fraud. Ad fraud refers to any illegal act used to manipulate and increase the clicks/impressions of an ad, and fraudsters deploy automatic programs to increase ad costs for advertisers.

Another issue to worry about is the potential damages to one’s brand image if any of their ads land on an unsolicited website. For marketers, one method that proved effective in counteracting these risks is ad verification.
 

The Importance of Using Ad Verification Tools

Ad verification tools help analyze and monitor the actions taken on ads. With these tools, advertisers gain better control over their ad deliveries by checking whether their ads are being displayed in the proper spaces — or, more importantly, if the ads are viewable or hidden. The tools also allow advertisers to better understand which media channels are more effective for their ads, aiding in smoother ad operations.  And of course, helps detect and identify malicious behaviors such as competitor clicks, bots or invalid traffic, and more. 

Verification tools have been around for a long time but gained wide adoption only recently. They now play a pivotal role in removing challenges faced by advertisers in setting ad budgets, ad placements and quality, and the risk of ad fraud. The tools revolutionized the digital advertising industry and paved the way for a whole new realm of opportunities for marketers.
 

Conclusion

The technology behind digital advertising birthed many innovative solutions troubling marketers everywhere, which is good news. However, ad tech also comes with unwanted problems — ad fraud and other adverse consequences on brand image.

Ad fraud is a problem that the advertising industry has been fighting. With the evolution of ad tech, the issue has become even more complex. Understanding the digital ad market is challenging as there are lots of technologies to navigate. Nonetheless, businesses must be sure to implement a thorough ad verification strategy if they are invested in advertising in today’s digital channels.

To ensure your ad clicks and conversions are coming from real potential paying customers (⚠️ not bots or invalid users), you can try out our ad fraud prevention tool, Spider AF. Sign up for our one month free trial and experience the difference when your ads are clean of ad fraud.