Why AdTech Still Feels Hard — Even After 6 Years in the Industry
Following the last piece on splash ads, this time I want to write about adtech as a whole. But when I actually sat down to write, I felt a strange anxiety — where do I even start, and is it okay for me to share my own take on this market? Even after working across roles at a Korean ad network, a global retargeting company, and global media companies, and now sitting at Adrop trying to build the Web3 ad market.
So why this hesitation? Yes, I'm naturally cautious. But when I thought about it more, I realized the industry itself makes it hard to know it end-to-end. If you've read enough articles trying to understand adtech, I think you'll relate. Adtech doesn't have one fixed, definitive shape. Ha. It shifts daily; the same word means different things to different people; understanding varies by person, by company, and by side of the table (demand vs. supply). You're not the only one who finds adtech concepts confusing after reading several articles. So why is that? Here are four reasons I'd narrow it down to.
Here are four reasons the adtech market is so hard to understand — and what to do about each.
1. A Complex Distribution Chain
The simple version: the adtech industry grew by expanding its distribution chain.
Originally, the digital ad market was very simple. Two players — advertisers and digital publishers — exchanged traffic and ad spend.
- Advertisers: companies that want to buy ads.
- Publishers: people or companies that run the websites and apps where ads appear.
As the number of advertisers and publishers grew, intermediary platforms emerged to connect them — and then even bigger platforms popped up, promising to connect those intermediaries more efficiently with their own tech.
With this pattern repeating, intermediaries multiplied and the market's distribution chain became increasingly complex. Familiar examples include ad agencies, ad networks, DSPs, SSPs, ad exchanges, mediation platforms, DMPs, and MMPs. Today, with so many stakeholders in the mix, the industry has even started talking about Supply Path Optimization (SPO) — trimming the distribution chain back down for efficiency.
2. Programmatic Advertising and Real-Time Bidding (RTB)
Programmatic advertising, which makes up most of digital advertising today, refers to buying and selling ads through automated software. These transactions happen via Real-Time Bidding (RTB), with each deal closing in under a second — which requires sophisticated algorithms and data analysis.
On top of the data passed for each auction, both supply and demand sides collect and analyze massive amounts of their own data to optimize performance — making the system even more complex.
(References: ADTACK Creative, Times Internet: Everything. Everyday.)
3. The Diversity of Ad Campaigns
Advertisers run a wide variety of campaigns to match their goals and budgets. Each campaign has different objectives, targeting methods, and ad formats. Managing and optimizing all those moving parts means relying on numerous ad platforms and tools — which adds complexity. A campaign aimed at a specific audience, for example, might only work effectively on certain platforms, so advertisers end up using several platforms in parallel.
And new ad media and formats keep emerging. Just as you start to get comfortable with one campaign type or platform, something new pops up to learn. That's adtech.
(Reference: MarTech)
4. Shifting Tech and Regulations
Like other parts of the IT industry, adtech faces a rapidly shifting tech and regulatory landscape. New technologies keep emerging, and data privacy regulations keep tightening. As I'll cover in a future post, the death of the cookie also began with data privacy concerns.
Because of this, adtech companies have had to adapt — essentially overnight (though, to be fair, the runway has been several years long) — to a completely new paradigm. It's a far more technically complex world than one with a shared identifier like the cookie. Even Google has delayed its deprecation multiple times. So getting a concrete personal understanding of every algorithm and technology will only get harder.
Wrap-Up (Tips for AdTech Beginners)
If you've made it this far, you might be wondering:
“Okay… so what should I do about it?”
Here's my take:
“Master the foundational concepts of the market and its players — and accept that understanding of specific terms and technologies will vary from person to person.”
In other words, if someone tells you something a little different from what you know, it doesn't necessarily mean that you (or they) are wrong about adtech. (The scope of adtech is enormous!) That said, if you meet someone whose definitions and explanations are very different from the fundamentals you know, explain which sector of adtech you're in, then share the terms and tech you work with. Being honest with each other about what you each know will only broaden your view of the industry.
If you want to go deeper, check out these resources :D