The Future of AdTech: Key Market Insights into the Transformative Digital Advertising Space

Trailblazing advertising technologies and data-driven strategies are dominating the digital ad space, revolutionising the traditional approach to how we consume information. Stay on top of AdTech market trends with our insightful guide to the technology shaping the future of digital advertising.

As our screens become smaller, digital advertisements are rapidly evolving to keep up, the industry growing significantly at the same time. But despite an ever-increasing amount of online ads that are constantly running, only a few are making an impact.

The ongoing pandemic has also influenced the rise of electronic advertising, as an increasing number of people shift from single screens to multiple interconnected devices. Advertising technologies have opened a new scope for the industry’s growth, facilitating the transition from traditional ads to modern integrative digital displays.

Global digital advertising spending rose to US$521.02 billion in 2021, and is forecasted to increase in the coming years to reach US$876 billion by 2026.

The digital age has revolutionised access to information for modern day consumers, and its pivotal role has not only contributed to the rise of innovation and adoption of Advertising Technology (AdTech), but also has essentially transformed the way brands produce and distribute advertisements. It is estimated that a person encounters around 6,000 to 10,000 ads in a single day, most of which are often overlooked due to insignificant placement.

That being said, companies and marketing strategists are deeply invested in creating value-driven campaigns targeting their niche to maintain relevance and ensure impact. In order to achieve this, brands are integrating big data analytics and advertising technologies to gather insightful market forecasts, developing strategic deliverables, while strengthening their outreach through synchronising different mediums.

What is AdTech?

Advertising technology encompasses a broad range of software and tools utilised by marketers and advertisers which are key to strategising, executing, delivering, and the overall management of digital ads. These technologies are designed to streamline the process of communicating information from the source directly to the consumer.

It consists of a variety of tools, including digital banners, data management platforms, along with ad exchanges, networks, and other servers. AdTech primarily functions as a demand side platform (DSP) – which allows advertisers to purchase mobile, search, video, and other advertising inventory from a marketplace, and supply side platform (SSP) – where publishers can earn additional revenue by selling advertising spaces on their website to fellow marketers.

With increasing competition in the field, companies are pouring large sums of capital in digital advertising, making AdTech a valuable market for both buyers and sellers. In this guide, we will dive into the key AdTech market trends that are essential to digital advertising, and its future.

Transparency is Fundamental

2021 was a significant year for the advertising industry, as brands, executives, and marketing strategists faced new regulations regarding consumers’ security and data privacy rights. As modern day consumers now spend more time surfing the internet, they are pivoting towards value-driven content. Hence it has become increasingly important for ad publishers and brands to abide by best practices and provide customers with targeted content without breaching privacy laws.

Moreover, consumers respond best to ads that are not misleading or exaggerated, and are written in simple and clear language without room for misinterpretation. This puts publishers under the spotlight, as they are required to rethink their customer relationship management and strategise new solutions to maintain both profitability and exposure, as well as cultivate brand trust in the process.

Transparency has become fundamental for brands and publishers to generate good returns on ads.

Growing Influence of the Digital Native Generation

Essentially in the new age of social media, the generations before, as well as those coming of age have developed separate experiences and online behaviours. Up to 61% of millennials primarily use social media platforms as means to connect and communicate with their family, friends, and acquaintances, whilst Gen X had a similar adoption pattern to their succeeding generation, but with increased usage in recent years.

Gen Z, also known as “Zoomers,” were the highest group among digitally native generations, having experienced a strong social media presence for almost or more than half of their lives, with 66% of them deeming their online presence an essential part of their lives.

Future of AdTech_Digital Native Generation

In many ways, Gen Zs are the driving force behind new and innovative trends arising across social media and the digital landscape. Companies and marketers are quick to catch transformative behaviours across the demographic, and are reforming their advertising strategies to gain better traction and reach with tech-savvy Gen Zs.

TikTok-style indirect promotional ads and influencer marketing are among some of the growing advertising trends observed in recent times, as young consumers value and trust an influential figure closer to their age whom they can connect and relate to most.

Brands that capture a sense of individuality and empowerment in their marketing and ad strategies are more impactful and favoured among young consumers, which explains the rise of all-inclusive and dialogue-driven content on social media platforms.

Integrating AI with Digital Marketing

Artificial Intelligence (AI) plays an integral role in the digital ad world and beyond, as its groundbreaking technologies have triggered one of the most crucial digital transformations for humankind, contributing to the rise of modern tech such as software-as-service (SaaS), robotics, Internet of Things (IoT), virtual reality (VR), and more.

These revolutionary AI-driven technologies were quick to be adopted by market leaders in the AdTech industry, and continue to make waves in the space.

Integrating AI tech allows brands and marketers to develop analytical models and gain important insight into market trends which enable them to modify their strategies accordingly, in order to maintain, and even grow, their target reach. Such models are effective in improving customer reach, saving unnecessary market research costs, and generating quality leads, hence boosting return on investment (ROI).

Companies need to prioritise and invest in understanding their target customer base to develop solutions that best meet their needs. By leveraging AI, they can make the required improvements, better predictions, and enhanced strategic verdicts.

Pivoting Towards a Cookieless Future

As mentioned earlier, there have been growing concerns over consumer privacy, coupled with increased pressure from regulatory watchdogs. This has made it possible for consumers and companies alike to reimagine a cookieless future, where customer data remains secure and inaccessible to third-parties.

Leading by example, Safari and Firefox are among the top internet browsers and pioneers to introduce cookieless browsing to prevent tracking and better protection of data for their users. In addition, Google announced its plan to phase out the use of third-party cookies in Chrome by 2024. Other tech giants, as a result, have begun to rethink their platforms and discontinuing such practices to allow users more transparency and control over their data.

While this may at first seem to put many companies and marketers at a distinct disadvantage, it opens new possibilities to strategise and acquire consumer insights in an ethical and sustainable manner.