What are AdTech and Programmatic Advertising?

Programmatic advertising is becoming increasingly popular in the digital marketing community. According to Statista, the programmatic advertising industry was worth $418 billion in 2021 and is continuing to rise quickly. Knowing how AdTech runs the show behind the scenes is extremely valuable to help with advertising decisions. Additionally, understanding AdTech will help you stay on top of current trends in an ever-changing industry.

Programmatic Advertising VS AdTech

Programmatic advertising is the automated buying, delivery, and measuring of ads using AdTech. What makes programmatic advertising unique is the focus on automation. Previously, buying ads used to be done manually. Think of how an old company would have called the New York Times to put an ad in its magazine versus how a new company will set up parameters on who Meta will display a digital ad to. This is what programmatic advertising excels at: easily delivering targeted digital ads.

AdTech is the overall technology being used to serve digital ads. It is the intermediary between a website publisher and an advertiser. The phrase AdTech is an umbrella term that covers most of the utilized software in the industry.

SSP VS DSP

SSP stands for supply side platform and is useful to the publishers of a site. It allows a site publisher to sell ad space on their website through different AdTech platforms through real-time auctions. This is how publishers monetize their content through ads.

DSP stands for demand side platform and is useful to advertisers who want to pay for ad space. It allows ad creators to set criteria and track how well their campaign is doing.

In essence, a DSP provides ads, and SSP serves those ads.

How does AdTech benefit a publisher?

Generally, publishers want one thing: money. Sure they may be doing it for fun, but monetization is always at the back of their mind. Selling ad space is the best way to do that, but can be extremely complicated if done manually. This is how programmatic advertising helps publishers. Acting as a broker between publishers and advertisers, it allows for maximizing efficiency and revenue while saving time for everyone involved. Automating systems that once required a lot of time and effort makes everything run smoother. It also allows SSPs to individually target users with certain characteristics, creating more valuable ad space.

Challenges with programmatic advertising:

This study from B2B market research firm London Research delved into the problems that come with programmatic advertising. Differences in how AdTech companies measure and report data were among the biggest concerns along with a lack of transparency. As both publishers and advertisers want the best deals to save money, it can result in using different platforms that use different metrics. This makes data handling much more difficult.

The other big concern is about fake clicks through bots. Bots who click on an ad are wasting the advertiser's resources without generating a possible return. While a single bot click may only cost a little bit, when you have millions of clicks on your ads it can get expensive quickly. Solving this issue is difficult and is still being worked on today. In the future, technology will hopefully be better able to detect these bots.

AdTech is a confusing subject. There are many moving parts that affect the end result. Understanding how AdTech and programmatic advertising work is a great way to stay ahead of changes by looking at the bigger picture. Programmatic advertising is being used now more than ever before and will continue to grow in the coming years.