What is AdTech and How Does it Work?

AdTech, or advertising technology, is software and tools for planning, managing, delivering, and analyzing digital advertising campaigns.

The global digital advertising market relies on AdTech to automate tasks, scale operations, and run efficient campaigns. According to Statista, over $740 billion of ad dollars flow through programmatic buying, real-time bidding, and audience targeting systems. Tools such as Google Ads, The Trade Desk, and Magnite process billions of impressions daily, allowing advertisers to reach and convert target audiences.

Understanding how AdTech works is essential for advertisers, agencies, publishers, and tech providers. Without clear visibility into its systems and processes, it’s easy to waste advertising budgets, miss valuable data insights, and fall behind in a competitive market. For instance, a 2024 Association of National Advertisers (ANA) report found that less than half of every $1,000 spent on programmatic ads reaches real users, with the rest lost to fees, intermediaries, and inefficiencies.

Whether you’re getting started with digital advertising or looking to deepen your knowledge, this guide covers the essentials of AdTech, its advantages, and where it’s headed next. Our years-long practice with expert AdTech solution development enables us to explain the processes and inner workings in depth.

What is Advertising Technology?

AdTech ensures ads reach the most relevant audience at the right time, on the right platform, and in the proper context. For example, a demand-side platform (DSP) lets advertisers bid on individual ad impressions in milliseconds, while a data management platform (DMP) helps organize audience data for better targeting. Manually managing those functions with thousands of concurrent impressions would be impossible.

Advertisers save time and budget, publishers unlock new ways to monetize their digital inventory, and users receive more personalized offers.

AdTech relies on insightful data and employs specialized algorithms to serve the correct inventory type to the right end user. In this context, answering the question “What is an AdTech company?”, we can say that it offers such solutions. Besides, such companies can provide brands and agencies with a big picture of their campaigns’ outcomes and equip them with the functionality to fine-tune their performance.

However, this approach to campaign management took time to appear. Buying advertising spaces used to be manual but has evolved into an automated process. Traditionally, specialists needed to decide which ads to buy and how much to pay for them individually. This approach worked for some time, but connecting the dots between buyers and sellers became hard when the number of impressions started to surge.

That is where programmatic advertising had to step in and put the ad selling and buying process on automation.

Most of the programmatic deals today occur using two approaches: Real-Time Bidding (RTB) and Direct Deals.

• Real-Time Bidding uses algorithms to determine the price of the inventory, taking into account the demand and supply of the ad space, data that is available for a particular use, and their campaign goals in a real-time auction. Advertisers place their bids for an impression opportunity and let the system choose a winner that places the highest bid.
• Direct Deals occur when publishers want to sell premium ad slots to advertisers directly and provide guaranteed impressions for them.

What is the AdTech Industry’s Current State?

The AdTech industry is recovering from major shakeups caused by economic uncertainty, tightening privacy regulations, and market saturation.

After several years of slowed funding and reduced venture capital activity, AdTech again draws attention from strategic investors. In 2024, deal flow has increased, particularly in early-stage and startup funding, due to the success of recent rounds led by The Trade Desk and AppLovin.

A mergers and acquisitions (M&A) surge is also expected later this year. Notably, funding is now concentrated around AI-powered AdTech, infrastructure optimization, and digital video advertising.

The more intensive the capital flows in AdTech, the better the overall perceptions of the industry’s growth become. As a result, the global AdTech market is projected to surpass $1.5 trillion by 2030, growing at a CAGR of 14%, as noted by GrandView Research.

Other reports suggest even faster acceleration, with estimates of $2.55 trillion by 2032, powered by trends such as AI-driven personalization, immersive AR/VR advertising, and cross-channel campaign optimization.

What is an advertising technology future outlook? AdTech is regaining ground as market confidence returns. Strong funding signals and optimistic growth projections encourage new entries, while current players can scale operations and gain a larger market share.

What is the Importance of the AdTech Industry?

The industry’s core significance is enabling a connected and competitive ecosystem. AdTech platforms automate media transactions, consolidate campaign data across every touchpoint, and ensure that messaging reaches the right audience in the proper context. As digital channels multiply and data volumes surge, AdTech delivers the precision, agility, and scalability for always-on optimization, regardless of your position in the programmatic advertising chain.

What tangible value do AdTech products deliver across the ecosystem? Here’s what sets them apart:

• Smarter ad investments

AdTech helps advertisers optimize spend and allocate budgets more efficiently than traditional buying methods. Thanks to real-time insights and automated adjustments, a brand using an AdTech platform controls inventory, creatives, and targeting settings. By using first- and third-party insights, brands identify high-intent audiences, focus spending where it drives results, and reduce wasted impressions. Eventually, they improve conversions and get better ROI from every advertising dollar.

• Better campaign performance

AdTech makes campaigns easier to plan, measure, and enhance by providing a 360-degree view to all parties. It unifies performance data across channels, allowing teams to analyze impression quality, engagement rates, and conversion metrics. As a result, advertisers can pause low-performing placements, shift budgets to high-ROAS inventory, and fine-tune audience targeting using live campaign signals.

• Customized impressions on each ad channel

AdTech prevents the same ad from following audiences across multiple platforms. Instead of displaying generic content across different media, an AdTech tool will serve unique brand messages depending on where the target audiences are. Advertisers can also refine campaigns and strategies depending on the stage of the shopping journey and retarget the users who have previously seen and interacted with a piece of advertising.

To maximize the AdTech value proposition, you must navigate a complex ecosystem of AdTech tools and monitor its changes. Let’s review the basic AdTech stack, which includes moving parts united by digital advertising.

Integral Parts of AdTech Ecosystem

Demand-Side Platform

Demand-side platform (DSP) refers to a complex digital platform that automates media buying processes for advertisers and agencies via RTB pipelines.

• How DSPs work

DSPs purchase the inventory from various Ad exchanges and SSPs in one interface on an impression-by-impression basis. Media buyers can ingest user data from a Data Management Platform or data brokers to fine-tune targeting, adjust bidding rules, set optimization parameters, and add multipliers in a centralized interface.

• Value for advertisers

Media buyers can set up, manage, and adjust advertising campaigns without manual input. All these processes run concurrently in real time and perform without disruptions when pulling poorly performing campaigns or investing more resources into the successful ones is necessary.

• Key benefits
  • Access to inventory on all platforms;
  • Automated bidding based on performance insights;
  • Flexible 24/7 campaign optimization;
  • Advanced targeting using first- and third-party data sources.

Supply-Side Platform

Supply-Side Platform (SSP) is an AdTech platform that allows publishers to manage and sell all available inventory through Ad Exchanges and Ad Networks.

• How do they work?

SSPs connect with multiple DSPs and expose impressions to the most interested buyers. This process happens via automated real-time bidding (RTB), mainly through the OpenRTB protocol.

• What’s the value for publishers?

An SSP is integral to the publisher’s AdTech stack, consolidating inventory that will be further distributed across different channels. Publishers control their assets, apply pricing rules, and optimize yield with a single platform. By allowing multiple buyers to bid in real time, they can expect the highest possible returns per impression.

• Key benefits
  • Access to a broad network of demand partners;
  • Real-time auctions lead to high yield;
  • Complete control over inventory and pricing.

Ad Exchange

Ad Exchange is a digital AdTech marketplace powered by automated real-time bidding.

• How do they work?

The platform mediates between the buy and sell sides and facilitates programmatic purchases using RTB mechanisms. Advertisers use a DSP to decide which slots to acquire and at what price, while publishers use an SSP to sell ad inventory to the highest bidder. These two parties are matched up in real time through the Ad Exchange.

Ad Exchange

• Value for each party

Ad Exchanges streamline and scale programmatic buying by enabling real-time, rules-based transactions between demand and supply partners. Instead of relying on direct deals, media buyers and sellers define preferences, automate transactions, and adjust reach. Here’s how each party can customize their AdTech experience:

Ad Server

Ad Server is a platform that delivers digital ads to websites, apps, and other online properties based on predefined campaign rules and real-time user data. It decides which ad to show, where to place, and when to serve it before a user’s page loads.

• How Ad Servers work

An Ad Server acts as an intelligent delivery engine within the AdTech ecosystem. When a user visits a digital property, the Ad Server platform evaluates available campaign criteria, such as targeting, frequency caps, priority levels, and bidding conditions. Next, it instantly selects and serves the most relevant ad.

Ad Server

There are two types of Ad Servers:

• First-party Ad Servers are used by publishers to manage and fill their inventory.
• Third-party Ad Servers enable advertisers to manage ad creatives across multiple publisher platforms and campaigns.

Both seamlessly integrate with AdTech systems such as DSPs, SSPs, and Ad Exchanges to automate and fine-tune ad delivery.

• Value of first-party Ad Servers

Publishers with Ad Server in their AdTech stack take control of their inventory, expand monetization opportunities, and ensure efficient ad delivery through a central hub. The interface provides a rich feature set, including:

• • Inventory management, where publishers add an unlimited number of ad slots for web, app, or OTT channels;
  • Targeting and pacing, which support flexible priority, frequency, and audience targeting rules;
  • Integration with direct and programmatic partners (advertisers, SSPs, and Ad Exchanges);
  • Analytics and forecasting, where publishers can analyze performance insights.

• Value of third-party Ad Servers

Advertisers manage, deliver, and optimize campaigns across multiple publishers from a single platform. The functionality that provides value to advertisers includes:

• • Support of pricing options, including custom ones;
  • Various targeting options;
  • Optimization of creatives and campaigns;
  • Standard and advanced capping options;
  • Integration with direct and programmatic partners;
  • Templates for ad generation
  • Analytics dashboard covering campaign performance, etc.

Data Management Platform

Data Management Platform (DMP) helps advertisers and publishers collect, organize, and activate audience data for more accurate targeting and campaign performance. It centralizes anonymized customer data from multiple sources to create unified audience profiles that contribute to smarter media decisions across AdTech channels.

• How DMPs work

DMPs collect data through pixel and tag tracking, server-to-server integrations, piggybacking, and onboarding first-party data. This data is then normalized and segmented into anonymous audience profiles. Next, the platform enriches and activates the profiles across connected AdTech tools such as DSPs, SSPs, and Ad Exchanges.

• Value for each party

DMPs help increase returns from available audience data for the buy and sell sides of media buying. Publishers use DMPs to segment, package, and monetize audiences through DSP partners. Advertisers mix first- and third-party data to build segments, adjust targeting, and identify the most valuable customer groups. Thus, they reduce wasted impressions and boost campaign relevance on every channel.

Customer Data Platform

Customer Data Platform (CDP) is AdTech software that collects and unifies first- and third-party customer data into a single, persistent profile that marketers can activate across channels.

• How CDPs work

CDPs pull data from various online and offline sources, such as a website, CRM system, and email platform, and match that information to real individuals using personally identifiable information (PII), like names, emails, or phone numbers. Once a user consents, the CDP organizes and standardizes demographic, behavioral, and transactional data into a central profile (often called a single customer view or SCV). These profiles are continuously updated as new data flows in. CDPs can also reformat this information to ensure compatibility with a marketing or AdTech tool.

• Value for each party

CDPs help advertisers target more precisely by unifying first-party customer data into real-time audience profiles. Publishers build audience segments for AdTech and programmatic sales while maintaining privacy compliance.

AdTech Main Players

The AdTech industry brings together multiple parties that create, distribute, and interact with digital advertising. Each plays a specific role in the supply, demand, and delivery chain.

• Publishers own online sources like websites, video platforms, mobile apps, etc., and sell available ad spaces. They manage inventory and monetize impressions by integrating with a platform like SSPs and Ad Servers.
• Advertisers buy ad inventory from a publisher’s online source. As the AdTech definition implies, an Advertiser is a party that generates the demand for an ad space or slot and takes care of its acquisition and tracking.
• An advertising agency specializes in developing and promoting digital ad campaigns for its clients and may have an AdTech department focusing on buying ad space.
  Programmatic media buying is an area of specialization for agency trading desks (ATDs). This unit is responsible for optimizing, acquiring, and allocating programmatic advertising.
• Ad networks are businesses that aggregate publishers’ ad inventory on one platform and enable direct communication and negotiation between a group of media buyers and a group of sellers.
• An AdTech solution provider is a company that develops, promotes, and delivers an AdTech tool to designated business users. As AdTech trends evolve, solution providers continually search for the most optimal routes to address their clients’ challenges.
• Users comprise Internet audiences that consume online ad content generated by AdTech ecosystem elements.

What’s Geomotiv’s Approach to AdTech Development?

Our AdTech developers will be in charge of every aspect of platform development. We are ready to implement technologies for real-time bidding, data processing, and targeted ad serving. Vast experience with data-intensive solutions and in-depth knowledge of the AdTech industry allow us to provide the most optimal combination of technologies and tools for your next project.

We’ll now describe how we can develop an AdTech solution from start to finish for your particular business needs.

1. Gathering requirements.
   We start by collecting all the information related to the AdTech project to identify the objectives and future vision of the software solution. This stage includes eliciting initial requirements and detecting potential technical challenges and limitations.
2. Defining tech stack.
   Depending on the complexity of projected features and functionality, we’ll go through a careful selection of programming languages, databases, software architecture, and frameworks.
   • Simple projects like AdTech automation software will demand technologies to create lightweight scripts, support fast deployment, and ensure on-demand scalability. APIs will also be instrumental in designing the flow for data exchange and querying. Automation software also depends on lightning-fast retrieval of structured records and high-speed access to real-time data.
     • Tech stack we use:
       • Python;
       • Node.js;
       • PostgreSQL;
       • Redis;
       • React.js;
       • AWS Lambda;
       • RESTful APIs;
       • GraphQL.
     • Common processes we implement: Retrieve data via API -> Apply rule-based processing -> Automate real-time reporting -> Deploy in the cloud.
   • More complex projects involving the delivery of full-stack AdTech platforms should incorporate advanced ETL pipelines, stream processing, and dynamic adjustments. High-load cloud infrastructure will be necessary to maintain service availability, avoid redundancy, and provide instant disaster recovery. Integrating AI and ML algorithms and continuous model training will streamline bidding strategies, fraud detection, and targeting.
     • Tech stack we use:
       • Python;
       • Java;
       • AWS;
       • Kafka;
       • Flink;
       • Spark;
       • Druid/Clickhouse;
       • TensorFlow;
       • Grafana;
       • GraphQL.
     • Common processes we implement: Establish ETL pipelines -> Implement real-time bidding -> Adopt AI-based tools -> Launch attribution models -> Scale with the help of multi-cloud infrastructure.
3. Assembling functional specifications.
   Our team gets down to documenting the functionality of the future AdTech solution. It includes information about the project scope, risks, assumptions, user stories, site maps, process flows, exceptions, etc.
4. Solution development and launch.
   We leverage the development plan derived in the previous stages to design, build, and release the solution on production servers. Here’s what the team is up to:
   • MVP development, UI/UX design, testing;
   • Initial user interaction with the developed software;
   • Collecting initial feedback to refine the software.
5. Post-launch iterations.
   We continue developing your AdTech platform using the best practices of the Agile methodology. This usually involves two-week development sprints. During each sprint, we build new features and present them to stakeholders for further approval. We consider continuous feedback from users and stakeholders to decide what features to build in the next iteration.

Our Case Study: Digital AdTech Platform Development

Goal:

To develop a standalone programmatic AdTech Platform that would bring together media buyers and sellers and eliminate legacy procedures from the supply and demand chains. The envisioned platform would comprise the functionality of SSP, DSP, and Ad Exchange.

Work Steps:

1. Geomotiv founds Adoppler, a product subsidiary unit within the company. Adoppler team gets down to the development of the AdTech platform from scratch;
2. The platform becomes an Ad Exchange working on top of the OpenRTB protocol;
3. The platform adds SSP capabilities, collecting inventory from supply channels;
4. Adoppler becomes a standalone company with its own in-house team of specialists;
5. The platform adds DSP capabilities and enables media buyers to transact with media sellers;
6. The platform adds an advanced reporting module.

Result:

Adoppler developed a horizontally scalable system that is currently handling 200,000 QPS. Adoppler Trusted Marketplace is a full-stack AdTech solution that supports programmatic, direct, and third-party demand and supply partners on any platform or device.

We’ve introduced the solution to international markets and serve diverse business needs of clients from different verticals:

CTV Ad Server

Adoppler was a system comprising DSP, SSP, and Ad Exchange that allowed all market parties to transact directly.

AI in AdTech

AI automates time-consuming tasks, optimizes complex workflows, and provides advanced capabilities for digital advertising. AdTech platforms integrate AI-powered tools to boost the efficiency of ad campaigns, reduce wasted impressions, streamline media buying, and create successful strategies.

Here are a couple of examples of how AI can be used to enhance AdTech products:

• Predictive analytics for ad placement. AI tools can analyze huge volumes of data, including page content, user behavior, previous ad performance, etc. Based on the results of such analysis, these tools can help publishers detect the most valuable ad placements to boost engagement and conversions.
• Bidding optimization. AI can change the existing approaches to bid management. Instead of manual adjustments and limited rule-based decision-making processes, advertisers can now rely on AI algorithms. These algorithms process auction dynamics, user signals, and historical data to maximize the publisher’s advertising yield/ad revenue.
• Personalization. Thanks to Artificial Intelligence, advertisers and publishers can successfully implement hyper-personalized ads and enhance user experience. AI tools can analyze user preferences, interests, and browsing behaviors to deliver ads that directly address each person’s existing needs.
• Fraud detection. AI excels at detecting trends and identifying deviations from set patterns. That’s why such tools are often applied to detect various fraudulent activities, such as hidden ads or the manipulation of impression metrics.

Final Word

AdTech is the backbone of today’s digital advertising, which provides a scalable, flexible, and resilient infrastructure for every ecosystem player. It connects advertisers, publishers, and technology platforms to deliver targeted, measurable, and efficient ad experiences across channels.

Core components like Demand-side platforms, Supply-side platforms, Ad Exchanges, and Data Management platforms streamline and automate ad inventory sales and purchases. AI now plays a key role in this ecosystem, enhancing targeting accuracy, improving bidding strategies, and delivering predictive insights that drive stronger campaign performance.

Feel free to connect with us to learn more about how the latest innovations in the AdTech ecosystem can help you maximize the efficiency of your ad campaigns!