Adtech set to be a $1 trillion industry by 2030, but must sort privacy issues

adtech predictions - Image by Tung Nguyen from Pixabay

Developments in advertising technology or adtech are set to drive the advertising on the internet to a $1 trillion industry by 2030.

That’s according to a new report from UK-based data and analytics company GlobalData called Advertising Tech (Adtech) – Thematic Research. 

The report reveals that adtech’s emergence over the past 25 years has been driven by the rise in the number of Internet users; the emergence of mobile, social media, e-commerce, and streaming platforms; and the growing sophistication of analytics tools. 

Adtech sector

Advertising technology (adtech) is a blanket term covering all software and services used to deliver and target digital advertisements. 

It is the backbone of the Internet advertising industry, which is set to grow from $438bn in 2021 to $1 trillion in 2030, the London-listed company said.

However, the report also notes that adtech is also under scrutiny from data privacy regulators for its role in mishandling users’ data.

Rupantar Guha, Principal Analyst in Thematic Team at GlobalData, said: “Adtech vendors have been forced to rethink their strategies due to the emergence of legislation such as the General Data Protection Regulation (GDPR). 

“They must adopt privacy-first approaches and ensure that user data is not shared among partners.

“In addition, the withdrawal of third-party cookies from web browsers and privacy-related changes to Apple’s Identifier for Advertisers (IDFA) and Google’s Android Advertising ID (AAID) are threatening longstanding ad targeting practices.”

As a result, data collection methods are changing, with adtech vendors focusing on first-party data and adopting consent-driven personalisation. 

Data management platforms that operate on third-party data will face an existential threat in the post-cookie world as the industry moves towards first-party data.

Guha added: “The adtech industry is primarily a face-off between tech giants like Google, Meta, Amazon, and Alibaba and pure play vendors like The Trade Desk, MediaMath, and Amobee. 

“The tech giants dominate the market with their massive user bases and sophisticated adtech walled gardens. 

“Several pure play vendors will become acquisition targets for Big Tech vendors over the next three years.”