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What exactly is adtech and how is it changing advertising?

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Adtech is beginning to govern the way that advertising is bought and sold. Sorosh Tavakoli gives his definition, and explains the benefits compared to its analogue counterpart.

Given how the media market has evolved digitally there’s no question that adtech will become increasingly important to you and your business. Though, the definition of adtech changes depending on how you look at it.

Maximizing Revenue & Efficiency

From one perspective, it’s all about helping publishers maximize the value of their content so that no money is left on the table.

Adtech shows the value of inventory, from premium to commodity, and in turn, provides the tools for the publisher to navigate the appropriate price points and trading techniques to connect their content with buyers.

In short, it’s all about efficiency.

In a complex digital landscape, content providers and advertisers need the tools to connect the right buyers with the right inventory, and manage campaigns across properties, devices, etc. It also means that publishers don’t exponentially have to grow their team as visits get increasingly complex. Just because users go from one to five devices, doesn’t mean they need five times as many people.

All of these things are facilitated by technology and again, a big part of adtech’s role is to help publishers remain efficient.

Audience Knowledge As A Differentiator:

The other perspective, is viewing adtech as a differentiator. Take competition from an advertiser’s perspective.

Why should the brand advertise with you and not someone else? Differentiating factors can centre around the type of proposition you may have, or how you are able to package your audience.

It’s all about knowing your audience, what they are watching and how they prefer to engage with content.

Digital TV gives the industry new ways to measure, track and understand audiences. It’s important for all content providers to tap into the analytics of their experience to really understand what content, audiences and locations are the most valuable.

Arming the buyer with more audience engagement metrics let’s them understand exactly what they’re buying. It sets expectations, builds trust and provides a sound foundation for negotiations.

Actionable data is a major differentiator in adtech and will continue to be as the offline world continues to move online.

Adtech’s Fundamental Shift: Programmatic

Programmatic trading is about connecting the pipes of buyers and sellers in an automated fashion. For buyers, they receive access to purchase ad slots directly with the publisher, and the seller’s inventory is immediately exposed either broadly or privately to buyers.

We’ve seen tremendous growth in this space. In Q1 2015, Ooyala saw that premium programmatic deal ID transactions, or the digital imprint showing a programmatic trade took place, grew 79% among premium broadcasters and publishers.

We expect this trend to mature rapidly and be just as integrated into an ad ops strategy as direct, one-to-one sales are today.

I liken programmatic trading to the smartphone phenomenon. Soon after mobile phones hit the market suddenly a new generation of devices emerged with touchscreens, internet, and everything you could possibly need. They were intelligent, always available and incredibly easy to access. Born was the term smartphone.

Programmatic is the smartphone of digital advertising. It’s a term used to capture the next generation of adtech and trading methods. There’s excitement, there’s confusion and it changes things.

And, just like how we don’t talk about the smartphones anymore as trending new technology, we won’t be talking about programmatic in a years time as it becomes mainstream and table stakes. It will also change the market as we know it.

That’s really what programmatic is to me. It’s the next generation of adtech, it’s fundamentally changing the way that advertising is being bought and sold.

Still, there are challenges ahead:

Adtech has impacted and changed everything we do. But as we start to get more comfortable with it, we realize adtech brings us back to the same core business dynamics.

The same business dynamics that want to maximize the value of audiences, maximize revenues, minimize workflows, tools, processes, all whilst offering attractive products to customers and buyers.

But we’re not completely there, yet. The challenge is still how to do this whilst minimizing friction and conflict. Take the introduction of digital media for example.

Everyone understood it was going to be big and different, then it came in and there were all these questions around whether or not it was conflicting, cannibalizing and whether or not there were channel conflicts. It’s all of those things happening again.

I usually talk about the fact we are operating within two simultaneous revolutions. One is the big shift from a linear broadcast world towards an internet delivered TV world. And the other is the way that advertising itself is being bought, sold, traded and operated.

All of that went from a world driven by manual-insertion advertising towards a programmatic, data-driven and automated world.

These things are putting so much pressure on premium content providers. It’s a challenge.

It’s another disrupting force, and if you’re not adapting, or not able to incorporate some of these new capabilities labelled under ‘programmatic’ you are going to be in trouble.