Despite Privacy and Data Security Hurdles, Ad Tech Market Expected to Approach US$40 Billion by 2025

The global pandemic created a challenging market for many ad tech companies during the first half of 2020. Although increased streaming and Connected TV (CTV) viewing helped to soften the decline, it wasn’t until 3Q and the election cycle that the industry saw a revenue recovery. Ad tech revenue was up through 3Q 2020, although growth overall in the year is lower than previous forecasts. The advertising market is also facing significant hurdles from privacy and data security issues. According to global tech market advisory firm ABI Research, despite these challenges, the market is poised to approach US$40 billion by 2025.  

“The eventual deprecation of third-party cookies, upcoming changes to Apple’s Identifier for Advertisers (IDFA), and privacy regulations certainly pose challenges to the ad tech industry,” explains Michael Inouye, Next-Gen Content Technologies Principal Analyst at ABI Research. “But despite recent attention in the news, these are not new issues, and while there will certainly be a period of transition, the industry is positioning itself to fill the gap left by these tracking devices and changing privacy landscape.”

Unified identity solutions and platforms from companies like The Trade Desk, Verizon Media, TAPAD, LiveRamp, and Nielsen, along with mobile app measurement companies like AppsFlyer are already working to prepare for a future with fewer third-party tracking devices. Offsetting some of these challenges are growing opportunities in CTV/OTT, which have given rise to a cross-platform approach with many companies offering omnichannel platforms and solutions such as Amobee, Centro, Comcast, Imagine Communications and Verizon Media. The increasing focus on addressable advertising, and the changing pay TV landscape, has also driven more attention to analytics and content personalization, and recommendation. This as advertisers seek to better target end-users and operators look to improve efficiencies and forge stronger customer relationships.

“If we consider some of the movements within the advertising marketplace, there is a growing convergence happening within the industry. Video in particular, for example, shows linear trying to become more programmatic like digital and digital having to rely more on the audience and authenticated user data. Ultimately, these trends will help springboard the industry to new opportunities with 5G and localization, immersive content and services, and AI-powered data analytics with actionable results to drive efficiencies within workflows and enhance the customer experience and relationships with service providers,” concludes Inouye.

These findings are from ABI Research’s Ad Tech and Video Analytics application analysis report. This report is part of the company’s Next-Gen Content Strategies research service, which includes research, data, and ABI Insights. Based on extensive primary interviews, Application Analysis reports present in-depth analysis on key market trends and factors for a specific technology.