The term “AdTech” refers to a combination of advertising technologies through which brands and advertisers can connect with their target audience and exploit the value of their data. Over the past few years, terminology surrounding AdTech has grown outside of just the advertising realm, to a term that is now broadly used as we become increasingly familiar with cookies, data privacy and data management. In an already heavy tech industry, it is unsurprising that the digital advertising industry is experiencing a period of boom. With people spending more time than ever on various digital media platforms, advertising is becoming smarter and more focused. It all comes down to a click.
How does AdTech work?
The basics of advertising are to attract consumers. AdTech takes this a step further by increasing effectiveness and growing activity. The combination of advertisers, ad exchanges, supply-side platforms, publishers and demand-side platforms create a loop which allow for generation of more revenue – all achieved by the collection and processing of information based on user activity. This comes in two formats: personalised and contextualised. On the one hand, data is collected based on user behaviour and traits, on the other it is based on activity. Real data, from real people allows ads to be directed accurately, not approximately, if done correctly.
AdTech is already disrupting the commerce and industry sector due to its ability to track customer behaviour and personal preferences, through customised cookies and online tracking tools. This allows for substantial growth to take place compared to the “offline world.” If you combine this with the growth in AI, there is a potential to boost AdTech towards substantial levels of growth over the next few years. Where AdTech really stands out, is its ability to retarget. It ensures that consumers are returning to sites after they have left. This not only allows for better monitoring of activity and preferences, but increases the chances of the consumer engaging with that ad.
However, whilst the market has seen unrestricted growth over the past decade, this has been notably down to the fact that the industry has grown unregulated. Both legal and ethical questions are raised, in particular issues around competition, privacy, fair, lawful and transparent data processing, consent and GDPR. Cookies allow for the browsing history of users to be tracked and this results in the subsequent display of targeted online advertising that we have all been a victim of at some point. The draft ePrivacy Regulation will reinforce existing provisions relating to online consent (which also applies to cookies), to offer consistency with GDPR. Therefore, AdTech providers will have to adapt and change their processes to adhere to GDPR and other ePrivacy Regulations to achieve compliance with legislation moving forwards. This highlights that the growth of the AdTech market will come down to their ability to address fundamental flaws, and changes in regulation and legislation.
AdTech: moving forwards
Big Tech is increasingly becoming politicised, particularly in the past decade, with many advocating for greater regulation, in particular for the Big Four. There is greater scrutiny on fake news, misinformation, anti-trust, data privacy and ownership, which raises some concern of over-regulation in AdTech which could threaten innovation. Whilst evolving privacy legislation will bring change to the likes of Facebook and Google, effective advertising does not need to come at the cost of privacy or performance. Moving forwards, 2021 is the time for advertisers to re-think and re-consider how they find, build, and target their audiences.
The magic of AdTech really comes down to user clicking and the ability to use data in the best way possible. Whilst the uncertainty of its regulated growth remains in question, the ever-increasing intelligence of technology and data tracking will inevitably saturate the advertising world.
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