AdTech Evolution: How Technology Shaped Our Advertising Today

From the ancient Egyptians’ steel carvings in 2000 BC to the first legal commercial popping up on TV screens in 1941, advertisements in the pre-Internet days had their little shine on our lives. It was only when the internet exploded in 1992 that the digital universe and advertising intertwined, never breaking free. The first digital ad ever was AT&T which had a staggering click-through rate of 44 percent! (yes, you read that correctly.) 

The remarkable results couldn't be hidden for long and soon enough, a vivid opportunity for increasing sales gleamed for every marketer on the planet at that time. There was one problem.

The internet has just started booming and this "digital ad" thing was difficult to scale. Hundreds of hungry solo publishers displayed their vacancies and overwhelmed all the advertisers. These potential clients were burdened and the publishers suffered many unsold ad spaces.

See the problem here? Enter Ad Networks

Ad Networks like AdRoll were companies that acted as middlemen to bridge the connection between those selling ad space (the individual publishers) and those buying it (the advertisers). Ad Networks essentially aggregated unsold ad inventory and resold it in packages to the advertisers. Lack of transparency and intense competition created new problems for the publishers and advertisers. Everyone wanted to see and view the “action” part; the detailed numbers and even the site of the advertisement couldn’t be assessed due to the limited access. This gap led to the evolution of two types of services, working in tandem with each other: Ad Exchange technologies and demand-side platform (DSP).

New York Advertisement 

Ad exchanges (like Google Ad and AppNexus) came to life. While ad networks were companies that collected, packaged, and resold ad space, ad exchanges were technologies that utilized an auction-like framework. It created a marketplace for the transparent sale of individual impressions between the buyers and sellers. Whenever an ad impression was up for sale on the seller site, an “auction” is created. The seller (aka the publisher) provides specific data about itself and the anonymous matching client. The exchange technology then sends out the data provided by the publisher with the specific targeting and bidding. This bidding request is received by the DSP.

The DSP (like Facebook Ads manager) is a platform that allows advertisers to automatically bid on and ad buys on the offers available. Imagine this: billions of ad bids are sent every day by ad exchanges to advertisers all over the world. Without similar software like DSP, it would be impossible to sift through the billions of offers available and select the best match. The DSPs instantly solve these dilemmas in a matter of mere milliseconds to filter out billions of ads into few perfect matches. Other popular examples include Adobe Advertising Cloud DSP, Amazon Advertising, and Google’s DV360.

Facebook Ads Manager

DSPs are still leading the advertisement frameworks. Advertisers’ demands increase over time and the DSPs evolved to include advanced tools like tagless trafficking and ad serving, which are essentially technologies that accurately measure and assess the effectiveness of the ad buy. The sky is not even a limit to which the advertisement technology can transcend next.

   Nowadays, digital advertising is integrating innovative technologies and sophisticated tools. The involvement of Flash and Java took the graphics display onto a whole new level as well. Smartphones stepped into the zone and shifted the advertising tide towards in-app mobile advertising instead of the old-fashioned mobile web browser advertisements. Virtual voice assistants like Alexa and Siri served a vital role as well in the magnitude of this shift. A report by IAB UK proved that mobile traffic outshone web traffic, with a total spend of £4.8 billion in 2015 alone!

   The next frontiers in advertising were extended by the Internet of Things (IoT) in 2012. Due to the involvement of pretty much every smart machine on the planet, the pool of data grew and keeps growing exponentially at an unprecedented rate. In the next few decades, it is expected that user mobility will decrease as the full experience of an advertisement can be transmitted without any physical involvement. Imagine having a smart device that produces a hologram to find your perfect shoe size!

Augmented Reality Ads

In the last 5 years, Real-Time marketing hit the charts. After witnessing the Pokemon Go sensation in 2016 with 45 million users, advertisers acknowledged the viability of the augmented-reality model on mobile devices. Consequently, the two tech tycoons Apple and Google launched AR Kit and AR core, respectively, for mobile AR apps and advertising the following year.

As much as these technological advancements scream evolution, the convolutions in digital advertising are running out of control. Tom Hespos, founder of Underscore Marketing and one of the prominent voices of the field, stated, “For many, digital advertising has become a black box where they dump money and hope for the best.” As we stated in the beginning, the moment technology and advertisements intersected paths, a chain of reactions took place that never ceased but only evolved to more and more intricate forms.

Projecting historical data onto our current decade, the advertisement industry will most probably keep swinging towards the machines and anything AI-related. Currently, human involvement remains mandatory as, at the end of the day, advertising is essentially not about robots selling to robots, but about humans selling products to humans. Who knows, maybe we are dwelling in confirmation bias while the machines are sweeping the need for our involvement in the first place.

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