Nineties chaos: the birth of digital media

The first digital ad appeared in 1994. It was an AT&T ad that appeared on hotwired.com, and achieved a click-through rate (CTR) of 44% - the kind of performance most contemporary digital advertisers would sell a kidney for. Today, most ads achieve a CTR of between 0.02% and 2%.

The formative years of digital advertising were a chaos of sidebar banner and popup ads of questionable quality, as the industry fumbled towards effective, efficient methods of online marketing. Initially, campaigns were booked manually by advertisers and publishers, as they had been for many years across other media. In 1995, the arrival of central ad servers - the first of which was FocaLink Media Services, later AdKnowledge - led to increasing automation of the process. Ad networks - including DoubleClick, but more on them later - appeared a few years later, enabling campaigns to be sold at scale.

In 1996, the IAB was founded, which brought a degree of ad format standardisation and some guidance for advertisers around the burgeoning technologies that were shaping the industry. A degree of control was achieved over the chaos, but the space still lacked any real transparency, or the kind of effectiveness and efficiency the digital media landscape enjoys today. It was simply moving too fast. 

2000s: the bubble bursts, but mobile and programmatic take flight

The following decade was to produce some of digital advertising’s truly groundbreaking moments. But first, a reality check. During the late 1990s, investors had plunged millions upon millions into adtech companies, many of which had no real demonstrable revenue model. Reality bit hard between 2000 and 2002 when it became obvious that these companies were hugely overvalued. Many subsequently imploded, triggering a stock market collapse. The disastrous merger of Time Warner and AOL in particular became symbolic of the bursting of the dotcom bubble. 

Full-throttle mode resumed shortly after, and in the mid-2000s supply-side platforms (SSPs) arrived, enabling publishers to sell their inventory quicker and easier. A little later, Demand-Side Platforms (DPSs) followed to combat inefficiencies in the ad-buying process. Both of these remain critical cogs in the digital ad world today.

Towards the end of the decade, SSPs and DSPs enabled the creation of real-time bidding. Finally, advertisers could buy impressions on a publisher’s website, using automation, in real time - programmatic advertising had arrived. This vastly increased an advertiser’s ability to target an audience at scale, with greater transparency, speed and efficiency than ever before. 

The latter part of the 2000s ended with a bang. Apple delivered the iPhone in 2007, mobile internet became reliable enough to deliver quality video ads, and mobile ad networks (such as AdMob) were the catalyst for the rise of the smartphone as a portable ad platform. 

2010s: social media arrives

The digital advertising industry moves faster than ever during this period, but the 2010s were characterised by an acknowledgement that a certain degree of refinement was required for its products and services to appeal to the broader marketing world. For example, in 2010 Google launched DoubleClick for Publishers. This product gave advertisers new control over their campaigns. From one location, advertisers could now track metrics, analyse performance and optimise their ads.

Between 2012 and 2014, social media became a force to be reckoned with in adtech. Facebook acquired Instagram, and the former launched promoted content, with video ads, across both platforms. Twitter and Snapchat did the same shortly after, and by 2016 Musical.ly (TikTok’s predecessor) was gaining huge popularity. 

2016 was also the year mobile internet usage exceeded desktop usage for the first time globally, demonstrating the world’s move towards a truly multichannel status. This gave brands and advertisers a new raft of opportunities to engage consumers in multiple places and at multiple times, in different ways.   

In addition to social media, brands were finding campaign success through YouTube, which had been acquired by Google in 2006. By 2014, the video-sharing platform generated over $5bn in ad revenue, and by 2019 that had risen to $15.1bn.

2020s: AI, consumer privacy and ongoing development

The last few years have been characterised by adtech’s maturation. The industry of 35 years ago had a touch of the Wild West about it, but as platforms and solutions develop their offerings, consumer consent and privacy regulations tighten and the space pushes for greater efficiency and transparency, adtech has never been in such a good place.

And meanwhile the innovations keep coming. AI and ML are doing everything from shaping ad creative to increasing attribution accuracy, and the rise of the partnership economy, CTV and retail media show that the space is more creative than ever in helping advertisers reach consumers.

Attribution has always been one of digital advertising’s greatest challenges, but adtech is proving powerful in helping progress the space. With its mountains of data, analysis and optimisation capabilities, adtech is helping to track the new, multichannel user journey, bringing greater insight to marketers, helping them build campaign success powered by technology.