How ad-tech industry is overtaking traditional media

Ad-tech is the latest buzzword in the advertising industry and has been experiencing stellar growth in the recent years. Due to many new age technologies, the ad-tech industry is evolving continuously. Technologies like Blockchain, Cloud Computing, Big Data and AI are playing a major role in shaping this industry. Companies all across the globe are adopting these new technologies, and are gradually forming a part of the broader ad-tech industry. Traditional advertising is now becoming a thing of the past, as companies are getting tech savvy.

What is ad-tech?

Before understanding why there is such hype around ad-tech, let us try to understand what exactly ad-tech is. Ad-tech, as the name suggests, is the confluence of advertising and technology. Ad-tech is an umbrella term for the different technologies used in advertising. These may include technologies like AI and machine learning, back-end servers, data collection and processing technologies like Big Data, different analytics systems, and marketing platforms. These have made way for an array of innovative advertising solutions like programmatic advertising, mobile & video advertising, which are a part of the broader concept of digital advertising. The cutting-edge technologies are now offering advantages one could have only hoped for earlier!

Why are the ad-tech budgets surging?

As discussed earlier, ad-tech includes a wide-range of technologies. Companies across the globe are investing heavily in these technologies because they add tremendous value to their marketing strategies. Investing in ad-tech means greater ROAS (Return On Ad Spend). Employing data to power decisions lies at the crux of the ad-tech industry. Thus, by investing in ad-tech, brands can make better-informed decisions, that yield better results. As a result, many top-level executives are opting for ad-tech, and are investing increasing parts of their budgets in ad-tech. Thus, the ad-tech budgets are experiencing a constant surge. 

Ad-tech v/s. Traditional Media:

The ad-tech industry is slowly overtaking traditional media. As per a report by Accenture in 2016, the digital and mobile ad spends accounted for 41% of the overall ad budgets. This was almost comparable to spends on TV ads. As per a more recent data released by Gartner, nearly 67% of the Chief Marketing Officers (CMOs) plan to increase their ad-tech budgets in 2018. This clearly indicates that ad-tech is the next big thing to watch out for. Thus, those who have not embraced ad-tech yet will do better to hop on the ad-tech bandwagon sooner, rather than later. 

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The Technological Advantage:

Ad-tech provides the technological advantage. It brings with it a host of benefits like cutting-edge technologies, the impact of automation, the power of data, the precision of algorithms, and a global outreach, to mention a few. Ad-tech reduces human errors, increases efficiency all the while cutting down on time and efforts. Owing to such advantages, ad-tech has become a crucial component of the global economy. In 2016, the US ad-tech spends stood at $68 billion, exceeding TV ads, which stood at $66 billion. This growth majorly was driven by the digital and programmatic platforms. Ad-tech has made advertising faster, easier and more effective. 

Programmatic Advertising is leading the way

As per eMarketer, programmatic advertising had a 79% share in UK’s digital display ad spends in 2017. By 2019, the figure is expected to reach 84.5%. Programmatic advertising brings in the advantage of RTB (Real-Time Bidding). Advertisements are shown only to the relevant users, without badgering the others. Cross-device targeting enables the brands to get their message across consistently. Brands can employ techniques like DCO (Dynamic Creative Optimization) to deliver highly personalized ads dynamically. With such innovative advertising techniques, programmatic is quite an attractive option for brands globally. It is no surprise that the global programmatic ad spending grew from $5 billion in 2012 to $39 billion in 2016. As per a KPMG report, programmatic buying presently has a small share in the pie but will capture major chunks in the future. It is the future of advertising and has taken the industry by storm.

Mobile Devices:

Mobile devices like smartphones, phablets, tablets, and laptops are the major players in the ad-tech industry. Growth in these devices is a major factor contributing to the overall growth in the ad-tech industry. As per a recent survey, mobile ad spends in India grew at a rate of over 80% in 2017. With smartphones penetrating to semi-urban and rural areas, mobile ad spends are experiencing a rapid pace in India. Other factors that played a major role are the introduction of 4G technology and the falling costs of data consumption. As mobile technology grows, so does the ad-tech industry.

Ad-tech budgets have seen a steady rise and will continue to do so. Ad-tech and programmatic are riding on the back of the new age technologies like Big Data, AI & machine learning, Virtual Reality, Cloud Computing and so on. As these technologies gradually make their way into our daily lives, ad-tech will be the new normal.

(Ashish Shah is the Founder and CEO  at Vertoz. Vertoz is an Online Ingenious Ad network offering Innovative Contextual Advertising On DISPLAY for Page Ads, Margin Ads, Footer Ads & Text Ads, On MOBILE for WAP Website Ads & Mobile Applications Ads and On SEARCH (XML) for Domain Parking Ads, Toolbar Ads & Search Box Ads for Advertisers on Various Inventories of Publishers.)

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