“What is ad tech? This is a question I have been asked and answered many times. I recently joined the Chicago office of BakerHostetler in the Digital Assets and Data Management practice group after spending nearly eight years at Publicis Groupe, where I led a team of lawyers supporting business units focused on media, data and advertising technology (“ad tech”). As part of this transition, I had the opportunity to meet many new lawyers in the firm and their new existing and potential clients, which required me to refine my proverbial “elevator pitch”. This elevator pitch always includes a discussion of ad technology, starting with an explanation of what it is.
If you search online, you will find slightly different definitions, depending on the source. Most will include some variation of the following: advertising technology is the set of technologies and tools used to purchase, manage, target, deliver and analyze digital advertising campaigns. And that’s right, even if it’s not very helpful. Instead, I usually try to define it more succinctly; it’s the technology that allows advertisers to show their ads in front of the right eyes. After all, the purpose of an advertisement is to engage consumers, especially good consumers. Ad technology helps advertisers do just that. Innovative, stunning, and award-winning ad creative is great, but to drive sales, those ads need to be seen by the right consumers. In addition, the production of quality advertisements and the purchase of media to broadcast these advertisements represent significant investments for advertisers. Ad technology provides tools that advertisers can use to ensure their ads reach the right audience and that those investments pay off. I find that focusing initially on the Why advertising technology, compared to the Whathelps provide the necessary context, especially for people who don’t live and breathe this stuff.
In this context, I would like to give a few examples. My favorite is the demand-side platform, or DSP. I like using DSP for several reasons. One of my earliest experiences in ad tech was providing legal support to a company that owned and operated a DSP. And I’ve been lucky enough to have some of the best and brightest inside clients in ad tech walk me through how the platform works and in turn how the whole thing works. of the ad tech ecosystem. DSPs also connect and interact with many other types of ad technology platforms, including sell-side platforms and exchanges, data providers, ad servers, and various measurement providers, brand safety and verification. So, by considering the DSP, you can familiarize yourself with several types of ad technology providers. And discussing DSPs also helps introduce some standard terminology frequently used in ad tech.
A DSP is a platform used by advertisers or their agencies to buy ad space programmatically and run ad campaigns. The terms “demand-side” or “buy-side” generally refer to those who seek to buy media space to place their advertisements in view of consumers, ie advertisers. The terms “sell-side” or “supply-side” generally refer to those seeking to sell media space to advertisers; for example, a publisher who owns and operates a website with advertising space available for sale. Just as a DSP helps advertisers buy ad space programmatically, a sell-side platform, or SSP, helps publishers sell their available ad space. DSPs and SSPs allow advertising space to be bought and sold on an impression-by-impression basis through a real-time auction known as a real-time auction or RTB. To illustrate how this works, imagine a consumer using their web browser to view their favorite news site. They type the address into their browser and press enter. A second later, they’re looking at the site’s homepage. But there’s a lot going on behind the scenes during the few seconds it takes for this page to load. During this short period of time, the page’s ad slots (each called an “impression”) are auctioned, winning bids for impressions are selected, and the winning advertiser’s ad creative is served and loaded into the advertising space. , along with the rest of the page content, and all appear on the page the user is viewing. The auction is facilitated by communication between the SSP and the DSP. The SSP sends a bid request to the DSPs, announcing that it has an impression to sell and accepts bids from advertisers for that ad space. The bid request also includes impression information to help advertisers decide if and how much they are willing to bid. This may include things such as the name of the website where the impression will appear, a description of the content of the page, the type of device and operating system the consumer is using, the consumer’s location and other information about the opportunity. DSPs receive the bid request and use the information provided to decide whether or not to place a bid on behalf of their advertiser clients. DSPs compare the information in the bid request to the parameters that advertisers set when initially setting up their campaigns in the DSP. If there is a match between the opportunity and the targeting parameters configured by the advertiser, the DSP will place a bid (send a bid response) and the DSP will determine the bid amount based on proximity opportunity with advertiser settings. , among other factors. All bids are compared, the winning bid is selected, and the winning advertiser can show their ad to the user on the page.
DSPs and SSPs are not the only ad technology vendors involved in these transactions. Ad servers play an important role and are used by both publishers and advertisers. They are responsible for storing creative assets, delivering content to the page, and collecting/tracking various campaign information and metrics (e.g. number of impressions and clicks). Data providers grant advertisers additional proprietary consumer data licenses to use to determine whether a consumer is part of a particular consumer segment they wish to target and, in turn, whether and how bid on the opportunity. There are various other tools used to measure, analyze and optimize the performance of advertising campaigns that connect to this process; for example, brand safety and ad verification providers can analyze the campaign to ensure that the ad is not served alongside inappropriate content that could harm the brand, that the ads are served at real people, not bots, and the ads are actually visible to the user on the page.
The foregoing description is by no means a complete or exhaustive discussion of the entire ad technology ecosystem and its many components. This is a simplified description, focusing on a small part of this ecosystem. But hopefully it will provide useful information to form a basic understanding of space. And again, I think it’s always worth going back to the Why advertising technology: serving ads in front of the right eyes.
Using data and technology in this way can trigger several complex legal and regulatory compliance requirements. Additionally, the contractual agreements governing the sale, licensing, and use of this data and technology can also be quite complicated. I help brands, agencies, publishers, data providers and ad tech platforms manage these complex agreements and legal requirements. The ecosystem runs on data. This includes transactional data, such as the time of day an impression was triggered and the auction price for the impression. And it also includes data about the consumer viewing the ad, such as the consumer’s location and device type and whether the consumer belongs to a particular demographic or behavioral segment (e.g., age, gender, travel, sports enthusiast). Agreements governing transactions in this space should address the collection, ownership and use of this data. Additionally, because some of this data meets the definition of “personal information” or “personal data” as defined by various U.S. privacy laws and international privacy frameworks, it is important to understand and meet all compliance obligations under such laws. Similarly, if you are developing new products and services in this space, you should map and understand data flows early on to assess data privacy compliance obligations and necessary contractual terms.
In addition to these data issues, many other issues that you would normally encounter with advertising, media buying, and technology platforms in general also come into play. These include editorial guidelines and requirements. brand safety; fees and terms of payment; cancellation and termination conditions; matters relating to the ownership, use and licensing of intellectual property; compliance with Federal Trade Commission guidelines regarding native advertising, endorsements and testimonials, and social media marketing; platform service level requirements (e.g., platform availability, uptime, and problem response times); and issues related to standard contractual representations, warranties, indemnification and liability limits, all of which may come into play.
It can get complicated. But I guess that’s where the “pitch” part of this elevator pitch usually comes in. I have years of experience partnering with brands, agencies, and ad tech companies to help them solve these complex problems. I’m a tech enthusiast at heart and I find this space super interesting. Things in this space are changing rapidly – I’m learning new things every day, and I think that’s great. I hope this article has given some of you a better understanding of advertising technology. I look forward to continuing to work in this space and seeing how it evolves over time, and am excited to help clients navigate this complicated landscape.