By Sebastien Filion
Artificial intelligence (AI) is quickly becoming a mainstay in numerous industries globally, enabling more efficient manufacturing, safer transportation and faster problem-solving and data processing.
While these practical applications are actively seen almost daily, AI is also being applied in ways we don’t see at first glance, namely in the world of advertising. As it evolves and improves, it will provide numerous benefits for advertisers, publishers and marketers.
Programmatic advertising, campaign support
AI is notably having considerable impact in programmatic advertising. It is used to develop profiles of online and in-app viewers, which are then used to tailor appropriate and relevant ads for each unique user. This allows advertisers to target large scale audiences more effectively, including through publishers, offering ad experiences tailored to their editorial content without having to blanket entire sets of web sites in the hopes that the right viewers will visit.
AI is also assisting full-scale campaigns, analyzing entire datasets against key performance indicators (KPIs) to determine what is working and what needs to be changed. While not particularly innovative in the wider industry context, AI’s entry here provides valuable support by significantly reducing the capacity for human error: which is always a possibility when comparing and contrasting any amount of performance data.
Solving digital advertising problems
So where then, is AI solving real digital advertising problems?
First, by expanding on the development of audience profiles AI systems are being used to evaluate and identify the most eye-catching and relevant advertisement to use for any online individual. This process, often known as dynamic creative optimization (DCO), begins with the system identifying a unique user and their specific profile. With this information, the system can then look through any number of creative items in a campaign and based on the user’s profile, select the creative that will work best for them.
For example, if a campaign is running hundreds various images to drive traffic, it will have numerous colour and creative combinations. If the campaign begins to see a trend of stronger positive responses to creative assets featuring a red call-to-action than a blue or a green, the DCO system will select and display the pieces of creative which match that profile. The purpose here being to present viewers with an advertisement that is similar in characteristics to ones they’ve connected with in past.
Second, and moving forward, AI is becoming an ever more valuable tool in programmatic digital advertising through the process of supply path optimization (SPO). Through this process, marketers can maximize every advertising dollar. SPO selects each possible avenue to deliver an advertisement to a given web site or application, evaluates and compares the options offered by each ad publisher and makes a choice that gives the buyer the best bang for their buck.
If an advertiser wants to run an ad on a specific site, for example Forbes, the advertiser would want to optimize that ad to run at different times, for different prices and to different audiences. Instead of choosing randomly or working through each possibility manually to identify the best combination, an AI system can run through the possibilities quickly and determine the best choice for each ad. This saves hours of planning and means an advertiser can publish an ad quickly and efficiently.
What’s next for AI and advertising?
Looking ahead to what is next for AI and its application in advertising, ad exchange platforms are at the forefront of development. On these exchanges where multiple publishers put forth potential avenues for an advertiser to get in front of an audience, the best choice comes down to the best price to performance ratio of any given option.
Using an AI system, a company can build a pool of information based on previous sales for a certain target site or app, at a specific time, for any given audience; in this pool of information would be the most recent prices any given ad has sold for. With this information at hand, predicting the price an advertising space will sell for becomes a possibility, providing a valuable competitive edge for specific publishers. Further, this could create a more competitive marketplace in the future as prices are predicted earlier and more accurately, giving a window to price slightly above or below the trend.
While these are only a few ways AI is moving in to and affecting the world of digital advertising, especially as programmatic advertising becomes a primary driver in the industry, one thing is quickly becoming clear: AI is only going to become more important for effective advertising.
Sebastien Filion is CTO and co-founder, district m (https://districtm.net/en/). Sebastien’s background in software development and deep understanding of programmatic functionalities from both the demand and supply side of the industry has supported district m in their goal to help clients yield maximum results from their advertising spend.