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Knowledgebase > IAB > How does Advertising Technology (AdTech) work?

How does Advertising Technology (AdTech) work?

Last Updated: March 26, 2020

01The Adtech Ecosystem

The ecosystem consists of each component necessary to manage digital advertising campaigns for demand and supply-side platforms.  

02Media Agency

The media agency is responsible for allocating the advertiser’s budget and purchasing media for their clients. They only handle the purchasing of the media, not the creative process behind the campaigns.  

03Agency Trade Desk

Agency Trade Desks (ATD) buy ad inventory and connect their clients with publishers. Trade desks are smaller scale than DSPs and allow for smaller brands who don’t want to invest in a large in-house team to handle their campaigns.   

04Ad Exchange

Ad exchanges are the platforms that connect advertisers with publishers. It is the tool that allows for the actual transaction of the ad inventory. Exchanges also allow publishers to set up private, restricted marketplaces for media. 

05Demand Side Platform

Demand-side platforms (DSP) are tools that advertisers use to communicate with ad exchanges and networks to bid on ad spaces. It allows advertisers to make bids on ad inventory that networks and publishers put up for sale.  

06Data Management Platform

Data management platforms (DMP) are tools used to combine data from web and offline sources to create audience segments for ad demographic targeting, campaign tracking, and connecting with ad exchanges to buy ads and analyze data on the success of ad campaigns.    

07Advertising Networks

Ad networks bring together large amounts of ad inventories from multiple publishers to give advertisers the ability to place ads with multiple publishers, enhancing their reach across a multitude of websites. Inventories can be accessed beyond the traditional one-on-one relationship of the past. 

08Ad Server

Ad servers are used by advertisers to create and analyze advertising campaigns across multiple publishers. They help automate the process of placing ads in the selected ad space when the website visitor loads a page. The ad server is responsible for automatically placing and measuring the success of the ad, including clicks and impressions.   

09Supply Side Platform

These platforms are used by publishers to quickly sell ad inventory that can then be sold and maintained during Real-Time Bidding. The platform is a tool that allows for accepting bids and communicating the results with the Demand-Side Platform. The tool also collects details about the website visitors to determine if the ad should be displayed to that user based on the advertisers’ target demographic.  

Content Delivery Network

The Content Delivery Network (CDN) is responsible for hosting the ad creativesBecause the creative doesn’t have to load directly on the website immediately, the CDN allows the site to load instantly when the browser receives the ad markup from the ad server. This enables programmatic ads to load faster to create a better user experience.   

The adtech ecosystem allows the automation of ads to happen seamlessly and far easier than ever before. Advertisers and publishers can easily exchange ads and ad space instantaneously. Advertising in the digital space has evolved from publishers and advertisers convening in the same room to being able to craft advertising campaigns digitally. Advertisers can get targeted advertising and analytics to better target the demographic audience that will lead to more conversions.  

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