How Artificial Intelligence is Changing the World of Advertising

Updated: Mar 18, 2019


Digital advertising has grown massively across a number of channels. For example as recently as 10 years ago, social media advertising was a relatively unknown medium, but in 2018 it is a major part of huge, global advertising campaigns, which gives you an idea of the speed and scale at which the advertising industry is changing worldwide. According to Statista, the social media advertising market alone was worth some 43.78 billion dollars in 2017, and accounted for 18 percent of the total digital advertising market. So what's next? What is happening right now in the digital realms that are fine tuning the way we see and interact with advertising? We look at Artificial Intelligence.



The rise of AI


OK, you are already probably feeling a little uneasy even at the mention of the word artificial intelligence. Sci-fi films over the years and in particular the Terminator series have no doubt made sure of that. Don't worry the T1000 isn't going to be knocking on your door and Skynet (hopefully) isn't monitoring all of our moves, so lets the ditch the robots and the nuclear apocalypse (for now) and move onto the simple world of digital advertising.


But just to be clear, there are three types of AI systems: one is designed and trained for a particular task while another virtually surpasses the cognitive performance of humans in all aspects (Terminator...) and the last combines AI technology with the human brain. So in essence this means  AI developing from data algorithms, AI that’s smarter than humans and AI integrating with humans .


AI online has been developing in recent years and the most exciting opportunities lie in the ability of AI to help brands connect with consumers based on their current, real-time online behavior.




Current banner ads


Current smart banner ads may show information related to the customer's online actions but this is often based on their past behavior, which means people will often see ads for products they have already purchased. For example this can be a nuisance especially if you have bought your wife those expensive shoes she's been after for Christmas and she then uses the family or your computer to be bombarded with ads for her shoes. Kind of kills the surprise for her doesn't it? Or even worse still if you haven't bought them and she is expecting them on Christmas Day - uh oh...


According to Digitaland "That’s how brands end up ‘following’ their target audience with ads for products they’ve already purchased, have decided not to pursue or simply aren’t a good fit for. In other words, that’s how you end up with irrelevant ads that push consumers to adopt ad blockers or a less-than-favourable perception of the brands delivering the ads. And in today’s display advertising landscape, where consumers expect a personalized, on-demand browsing experience, banner ads based on their past behavior are irrelevant at best and disruptive at worst."


Tech Journalist Walt Mossberg argued some time ago that current ads were ruining the online experience and that even tech guys were worried about having lost site of the user experience. He went on to say that 'ads had gone off the rails' and that 'Too often poorly executed, annoying, code-heavy, privacy-invading ads clutter websites and apps'. Mossberg argues that solutions weren't obvious yet Ben Lamm from Adweek believes that as new forms of technology change the machine-human interaction, the advertising world has to adopt a new model of engagement and redefine its core beliefs along the way and that the solution is 'a the tip of our tongue' and that it may just 'save our industry'.




Different types of advertising AI


"Hey Alexa, what time are the Incredibles on at the Odeon in Brighton?" or "Siri find me the closest gym" (with all the best intentions of getting fit...). These two guys ring any bells? Of course they do - Voice recognition AI.


"Uttered millions of times around the world – at work, at home, on the bus, in the gym – our smartphones and ‘hubs’ can recognise our voices and our words and respond to our commands in the blink of an eye. If you need to know what restaurants are nearby when you’re on holiday, you can ask your phone’s AI assistant and it will pull through a list of the highest-rated restaurants in the area." - Information Age.


Other forms of AI include search AI i.e. products recommended to similar items we have searched for as well as 'you may also like' music and albums on platforms like iTunes. Information Age also points out image recognition as a technology that is being developed i.e. theoretically, this means that we’ll be able to take a picture of something we want on our phone – a pair of trainers, a sofa or a table, for example – and our phones and computers will be able to use this image to search for that product or similar items.


Next up we have 'programmatic advertising' which is the AI we are focusing on. In particular this is when software is used to do the ad purchasing. Mike Kaput explains that with programmatic, AI is used to profile visitors to a website or app, then that information is used to target and deliver ads thanks to a complicated network of platforms and services that play different roles at each stage of the ad supply chain.


"Chances are, we know enough about a coworker, friend or family member to communicate with them in ways they respond to most effectively. We usually have at least some data on their behaviors, preferences, and desires. But to personalize and tailor messages at scale, we’d need contextual data on thousands or millions of people. Then, we’d need to analyze this data and use it to create the right communications for each person. Humans don’t have the time, resources, or intellectual bandwidth to do this. But AI systems do. That’s why more and more companies are turning to AI as the solution to creating advertising relevance at scale."


What this means is that AI can learn a persons digital footprint and find more 'look-a-like' customers or prospects to deliver precision relevant ads to those people. Not only is this a product or service the person has an interest in but it will also be less annoying or intrusive. Most importantly your wife should not see her shoes splashed across each available banner ad as she surfs the web!


This is exactly why programmatic advertising is growing massively with Emarketer predicting that more than $46 billion will go to programmatic advertising in the US this year. By 2020, 86.2% of all digital display ads will be bought via automated channels. Furthermore, By 2020, almost 90% of all mobile display ads will transact programmatically, buoyed by continued investment in social platforms, and ongoing efforts to bring programmatic and its audience-buying capabilities to the in-app space.



Summary


There is no doubt that direct, relevant and customized ads are the way forward and AI will certainly help us achieve that with a less disruptive online user experience. Whilst the rise in pop-up blocker software may not be squashed our nerves and interruptive annoyances may become more appeased. And who doesn't want to see more of what we like? Our wallets and purses may not be as happy though...


Make sense? Then why not give us a call to see how we can propel your ads to the right audience using AI with adalytix. US: +1 (302) 763 3740. UK: 0800 368 7658.


#ai #artificialintelligence #programmaticadvertising #onlineadvertising #displayadvertising #bannerads #onlinemarketing #digitalmarketing #adalytix



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