Those who follow me know I love Ad Tech! ❤
The ads you see on your screen take quite the circuitous route to get there, so let’s break it down.
Publishers
A publisher provides the capability and inventory that allows advertisers to run ads on their site (CTV, Mobile, Website, App, etc.). Publishers earn money by displaying ads.
Popular FinTwit Publishers:
- ROKU ($ROKU): Hardware & Software streaming platform with content from multiple providers including AppleTV, Peacock, The CW, CBS, NBC, PBS Kids, etc.
- Curiosity Stream ($CURI): Streaming platform focused on docu-series.
- Twitter ($TWTR): Social media platform
- Pinterest ($PINS): Visual discovery platform
- FuboTV ($FUBO): Sports streaming platform
- Enthusiast Gaming ($EGLX): Video game & E-Sports publisher (large Gen Z audience)
- Google ($GOOG/$GOOGL) & Facebook ($FB): Commonly referred to as “walled gardens”, because they manage all their ad inventory internally with their own services.
Supply "Sell" Side Platforms (SSP)
An SSP is a advertising technology (AdTech) platform used to coordinate and manage the supply and distribution of ad inventories. SSPs help digital media owners and publishers sell digital ads in automated auctions.
They enable publishers to optimize yield by simultaneously connecting their inventory to multiple ad exchanges and DSPs.
Popular SSPs:
- Magnite ($MGNI): Formally The Rubicon Project, recently acquired SpotX; forming the worlds largest independent sell-side Ad platform.
- PubMatic ($PUBM): Empowers independent app developers and publishers to control and maximize their digital advertising businesses. It enables advertisers to drive ROI by reaching and engaging their target audiences in brand-safe, premium environments across ad formats and devices.
- Tremor ($TRMR/$TTTPF): formerly Taptica, an Israel based company engaged in digital ad solutions which leverage video, native, and display technology to reach users. They focus on video ads and brand stories.
Ad Exchange
An ad exchange is a digital marketplace that enables advertisers and publishers to buy and sell advertising space, through real-time auctions; most often used to sell display, video, and mobile ad inventory.
Some large exchanges include Amazon Publisher, PopAds, AppNexus, AOL’s Marketplace, Microsoft Ad Exchange, and dozens more…
Demand Side Platforms (DSP)
A DSP is a 3rd party software that is used by advertisers to buy mobile, search, and video ads from a marketplace on which publishers list advertising inventory. A DSP allows for the management of advertising across many real-time bidding networks, as opposed to just one, like Google Ads (commonly referred to as a “walled garden”).
Of note: traditionally DSPs predominantly work with ad agencies, although some companies are changing that approach.
Popular DSPs:
- The Trade Desk ($TTD): Largest independent DSP providing Ad pricing “Supply” to advertisers.
- AcuityAds ($ACUIF): DSP platform “Illumin” focused on self-service ability of the advertisers, potentially cutting out the ad agencies & their 30%-50% cut of ad fee’s. Additionally, the platform will give small local business’s the opportunity to efficiently and affordably advertise in their area (something not available to them currently).
- Digital Turbine ($APPS): DSP platform adopted by many mobile operators & OEMs primarily focused on App downloads (pre-loads) for their clients.
Ad Agencies
An advertising agency is a professional service firm hired to conceive, produce, and manage advertising for their clients.
They plan, design, place, and supervise the advertisements and advertising campaigns of advertisers for optimal ROI.
Some of the largest ad agencies include WPP Group in London, Omnicom Group in New York, Publicis Groupe in Paris, Interpublic Group in New York, and Dentsu in Tokyo.
Advertisers
If you have a service, event, or product; you need to get the word out to potential customers.
What’s important to an advertiser?
- Target audience: An advertiser wants to make sure the intended audience is seeing their ads.
- Branding: It’s important for companies to ensure they maintain brand image. You wouldn’t want a Tito’s ad popping up on an article about drunk driving 😬.
- Conversion: Ultimately, an advertiser wants to convert their ads into sales.
There are as many advertisers as their are companies; a few popular with FinTwit from different industries:
Programmatic Advertising
Programmatic advertising is the process of buying and selling ads with software, and publishing those ads contextually based on complex algorithms. Most online advertising now is done programmatically through real-time bidding.
Real-time bidding advertising takes place (wait for it…) in real-time. You specify who you want to reach with your ads and how much you’re willing to spend, then a bidding war takes place between you and all the other advertisers trying to reach the same audience.
The whole process takes just 50 milliseconds! 😲
The New Reality
- Advertising is moving more and more dollars to CTV.
- Companies are working on ways to seamlessly insert advertising into our viewer experience without looking like they’re advertising to us.
- AI is allowing for more of the work to be done automatically, which is lowering the barrier for entry (Companies won’t need $50k-00k advertising budgets just to get started).
All the companies I mentioned (and many more) are working to solve these problems. The goal for investors is to find the companies who will do it faster and better than the rest.
I believe Ad Tech will outperform the broader market as the economy continues to open up. And I will continue to look for companies within the sector I believe can out perform.
I hope this gives you a better understanding of the industry as a whole, and I look forward to expanding on some of these individual companies in the future.
P.S. There should really be a good Ad Tech ETF out there! If you are starting one, give me a shout! 😊
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