As the entire world became plagued by the global pandemic, every corner of life underwent seismic shifts in adapting to the new normal. The impact to the AdTech industry, like that of the technology industry at large, started as quite favorable. The time for AdTech’s clement season has run its course, however, and it is preparing for a harsh, but – ZEFR Senior Product Manager Bharat Manglani predicts – temporary winter.
Rise and Fall
As COVID forced humanity to quarantine and close its doors to real-life gatherings, the tech industry adapted to a surge in demand fueled by our natural desires to connect with one another. Face-to-face visits became screen-to-screen get togethers. Furthermore, we spent more time online to support all aspects of our lives. This includes everything from shopping for groceries to powering our home offices. This environment served as fertile soil for the trees of the AdTech industry to grow strong. After all, the more time consumers spend online the more opportunity there is to expose them to advertisements.
The AdTech industry grew fast to support the ever-increasing number of ad impressions. Organizations scaled up their infrastructure and increased headcount. These efforts helped AdTech companies meet the growing demands and capitalize on this unprecedented revenue opportunity. Meanwhile, the pandemic abated. This in turn reduced the surge in consumer time spent online – as well as the industry’s revenue growth. This combined with the forces of rising interest rates and far reaching implications of Apple’s App Tracking Transparency initiative, as Ben Thompson eloquently outlines, caused the industry’s trees to shed their leaves and bear down for winter. Although currently in a correction period, the industry has a positive, forward-looking trajectory. As Insider Intelligence states:
“Digital ad spending growth has slowed, but it will increase to 10.5% in 2023 and stay in the double digits over the coming years.”
Renewed Focus on Efficiency
The current season of AdTech requires heightened attention around efficiency.
“With this economic crisis, we see budgets going down at the same time that inflation is rising. Advertisers are much more cost-conscious, and the focus is on ROI — tracking, measurement and actual proof of the impact of their investments.” – Jochen Schlosser, CTO Adform
This priority has led to the industry pursuing cost cutting measures and seeking innovative ways to efficiently achieve advertising performance targets. This includes the utilization of artificial intelligence to execute optimal campaigns. One example is Google’s Performance Max, which automatically creates advertising creatives based upon assets that advertisers upload into the system. The solution will generate permutations of the creative to build top performing combinations. It also guides advertisers to choose the targeting audiences that are most likely to engage with their ads and ultimately consume their products. This is just one of the game-changing products enabling advertisers to run high performing, efficient campaigns.
Does this mean that artificial intelligence will inevitably replace the industry’s subject matter experts overseeing ad campaigns? Future Social recently posed this inquiry to the acclaimed ChatGPT. In its own words:
“ChatGPT can assist in generating content, but it cannot replace the creativity and strategic thinking that goes into creating an effective social media campaign.”
It will be exciting to see how the AdTech industry complements its offerings with innovative AI solutions such as these to adapt to the current seasonal changes.
The Path to Spring
The AdTech industry has innovated to adapt to today’s market landscape. As more time was spent immersed in digital environments during the pandemic, organizations developed new types of content that captivated audiences. Insider Intelligence reports that “Alibaba, Amazon, and ByteDance are now megaplayers with ad businesses that exceed the ad spending totals of most countries.” This has led to healthy competition amongst the world’s leading AdTech platforms. It also further increased advertiser challenges of measuring attribution across the end-to-end consumer journey. And understanding how exactly their ad dollars were spent given the disparate and opaque nature of the AdTech ecosystem.
The next generation of AdTech platforms must innovate to provide advertisers with objective transparency across the fragmented market while protecting consumers. Sometimes these seemingly opposite motivations can align to foster a better Internet experience for all. This can be seen, for example, with solutions that enable transparency into the validity of traffic that viewed advertisements. Or, for that matter, the safety and suitability of content those ads ran against. These products meet the challenges of today’s business imperatives while providing much needed safeguards in our online communities. As spring comes to the industry, it will be fascinating to see the fruitful products that come with it.
About the speaker
Bharat Manglani is a Senior Product Manager at Zefr, an ad tech company focused on enabling content-level targeting and measurement across the world’s largest walled garden platforms. He was also a Product Manager at Human Security, a cybersecurity company focused on verifying the humanity of transactions over the Internet and disrupting the economics of cybercrime. Currently, he manages Zefr\'s reporting and analytics products, and his passion lies in protecting the Internet by helping to identify brand unsafe content.