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Opportunities and Challenges of Big Data in Ad Tech

  • By Jonathan Buckley
  • April 30, 2015
 

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Big data is transforming numerous industries around the world, so perhaps it shouldn’t come as a surprise that advertising technology is one of those recipients. While ad tech has been around for a while now, only in the past few years have companies latched onto the idea that big data can make online advertising that much more effective. And just as big data has presented other industries with incredible opportunities, the ad tech industry is beginning to see vast new possibilities with the use of this technology. With the new opportunities that accompany the adoption of big data also come more challenges that ad tech companies will have to confront and overcome. By addressing these formidable challenges, organizations will be able to see more success in the future.

Opportunities

As one of the world’s fastest growing industries, ad tech is often quick to use new technology. By using new solutions, ad tech companies can also hone their craft, introducing new, more effective ways to get their online ads seen and generate a positive response. As is the case in traditional advertising, it’s important to gauge how effective the ads are, and perhaps one of the best ways to do so is to use big data. With big data analytics, ad tech companies can measure the responses to their ads, determining if audiences and users are behaving in the way they intended. Big data also gives ad tech businesses and other companies the opportunity to craft advertisements that are individually tailored to specific customers. This is done once again with big data platforms that take into account the behaviors, lifestyles, actions, motivations, and other factors pertaining to their prospective customers. At the same time, big data can be used to make sure the ad is seen at the best moment, factoring in the timeliness of the advertising strategy. Creating an ad that speaks to an individual customer at the exact right time they need to see the ad will register a positive response. In the end, big data can make online advertising more effective, increasing its value for the ad tech industry.

Targeted advertising is just the beginning of what big data can do, but as the effectiveness of ads increases, so too does the price. This is in part because demand increases and developing big data algorithms can be an expensive endeavor. But even though the use of big data may increase ad tech prices, it can also be used to decrease them. Big data technologies have been developed that essentially use cloud computing to eliminate the middleman partners like ad management services from Facebook and Google. Instead, companies could use platforms like Advertising-Platform-as-a-Service (APaaS) to achieve the desired results. This would result in lower markups, bringing the overall price down to normal levels. In other words, big data allows ad tech companies to see better results at the same price.

Challenges

While these opportunities with big data are certainly intriguing and can do a lot to advance the ad tech industry, there are still a number of challenges that need to be addressed. In addition to the oft-discussed concern of transparency, ad tech often requires extremely high speeds, intense precision, and real-time predictive analytics to work best. While newer databases answer some of these challenges, they also give up some of the strengths of conventional databases. For example, scale-out architectures can handle the higher volume workloads associated with big data in ad tech, but by not using the conventional model, extra risks and productivity losses are introduced.

Big Data as a Service offers a solution to this challenge as it offers the scalability of the cloud, flexibility of Hadoop, and the speed of SQL tools like Presto and Spark while working with traditional analytics tools and databases.

While the challenges that stem from using big data in ad tech are significant, the opportunities are too tantalizing for companies to pass up. Big data offers a wealth of new avenues for the ad tech industry to explore, giving added weight to advertising and generating better responses from customers. As long as ad tech continues to use and experiment with big data, the benefits will continue to increase while the challenges will be overcome.

Interested in big data in adtech? Learn how DataXu manages big data in this webinar.

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