Adtech (advertising technology) is disrupting traditional advertising by offering new, data-driven and targeted advertising methods. Adtech companies use advanced technology such as Artificial Intelligence, Machine Learning and Big Data analytics to gather vast amounts of data on consumer behavior, preferences and buying patterns. This allows them to deliver highly personalized and effective advertisements to the right target audience at the right time, increasing the chances of conversion.
Adtech is also enabling real-time bidding and programmatic advertising, allowing advertisers to automate the buying and placement of online advertisements, streamlining the ad buying process and making it more efficient. Products such as demand-side platforms (DSPs), ad exchanges, data management platforms (DMPs), supply-side platforms (SSPs), and more, help advertisers target their ads to the right audiences, optimize their ad spending, and measure the performance of their campaigns. These advancements have led to a shift from traditional mass media advertising to more data-driven, cost-effective and efficient digital advertising solutions.
Some of its intrusiveness can be a little unnerving. For example, one evening I emailed a plumber about servicing a boiler he had installed years earlier, because it had begun to leak. When I woke up the next morning I had received emails from other boiler repair firms I had never heard of. Everything we do is tracked and monitored, and our data is up for sale!
Current adtech market size
The exact current market size for adtech is difficult to quantify as it is constantly changing and evolving, with varying definitions of what and what not to include. A Market Analysis Report published by Grand View Research estimates the global adtech market was worth $886.2 billion in 2022, and is expected to expand at a compound annual growth rate (CAGR) of 13.7% from 2023 to 2030. This growth rate would bring the market size to $2,475 billion.
A different report by eMarketer reckoned that just the US digital advertising market was projected to reach a level of $129.34 billion in 2022, with adtech accounting for a significant portion of this amount.
In terms of specific adtech segments, programmatic advertising is expected to account for the majority of digital display ad spending in the US, with 86.2% of all digital display ad spending allocated toward programmatic in 2022. Additionally, spending on digital video advertising is also growing rapidly, and video ad spending was expected to have reached $35.05 billion in 2022.
Recent adtech examples
Here are some examples of adtech companies disrupting traditional advertising:
- Programmatic advertising platforms: Companies such as The Trade Desk, AppNexus, and Google Ads allow advertisers to automate the buying and placement of online advertisements in real time.
- Ad Networks: Companies like Criteo, Taboola, and Outbrain use data and machine learning algorithms to deliver highly targeted display and native advertising to the right users at the right time.
- Data Management Platforms (DMPs): DMPs such as Tealium, Segment, and Treasure Data provide a centralized repository for consumer data, enabling advertisers to gain a deeper understanding of their target audience and improve the targeting and measurement of their advertising campaigns.
- Ad Verification and Fraud Detection: Companies such as DoubleVerify, IAS, and White Ops provide advertisers with tools to verify the authenticity and effectiveness of their digital advertising campaigns, reducing the risk of fraud and ensuring their ads reach the intended audience.
- Advertising Analytics: Companies such as Google Analytics, Adobe Analytics, and Mixpanel provide advertisers with detailed insights into the performance of their advertising campaigns, enabling them to make data-driven decisions and optimize their campaigns in real time.
Overall, the adtech market continues to grow as advertisers increasingly turn to data-driven, targeted and efficient digital advertising solutions to reach their target audience. The emergence of larger middle classes in emerging economies will particularly accelerate the adtech growth rate and market value