Simplaex Co-Founder & CTO Moti Tal helps untangle the benefits of using AI-powered programmatic advertising to increase reach and income.
Q: What are the essentials for publishers and advertisers to consider when it comes to Artificial Intelligence (AI) powered programmatic advertising?
A: AI-powered programmatic advertising is the real paradigm shift that brings more efficiency to publishers and advertisers. AI is here to facilitate marketers’ lives for better automation and decision-making while being able to deliver personalized end-user experiences. Nowadays, the walled gardens are dominating the digital advertising market by managing the ROI of advertisers and the revenues of publishers as they have created a sustainable ecosystem.
Artificial Intelligence is, therefore, the best bet for the distributed programmatic ecosystem in order to sustainably compete against the duopoly as it streamlines the demand targeting with supply monetization. It, on one hand, optimizes the use of demand’s resources by better user classification thus reducing waste, which on the other hand enables monetization of more relevant supply.
Unlike the duopoly, that mainly operates in a self-regulated environment like moving on a railroad track. On the contrary, the programmatic ecosystem the bid stream is like a busy intersection with a large amount of traffic in perpetual movement.
Analogous to autonomous cars, AI applied to programmatic advertising can navigate on its own within the environment and is able to give granular insights in order to find an economical path connecting advertisers and publishers.
Q: How does AI improve audience targeting for publishers and advertisers?
A: The creation of the audience is based on smart interest discovery. It has the ability to evaluate different traffic sources and bidding strategies in order to better understand the patterns of audiences intent behavior in the short term and long term interests which refine the classification. The AI layer enables you to leverage that during real-time targeting. You need to be able to react on the basis of both the demand requirements and the user interests. This makes advertising less intrusive and more relevant.
Analogous to a human brain, AI applied to programmatic advertising behaves like a central nervous system. It consumes information for a large number of sensory organs, i.e., supervised and unsupervised machine learning algorithms. In order to take effective real-time decisions, this AI takes optimal autonomous actions to adapt to changes in significant factors governing the demand and supply. It has the potential to optimize towards a sustainable ecosystem.
At the same time, it keeps up to speed with dynamically evolving user behavior, constantly updating user valuation.
Q: As the GDPR deadline is approaching, this means many companies will need to become compliant. Any advice for the players within the programmatic ecosystem as they explore the benefits of becoming GDPR compliant and any main issues to consider?
A: GDPR was designed to address consumers’ concerns about the privacy of their personally identifiable data and how companies are using it. The version of the GDPR, which was adopted by the European Parliament, includes new rules around individual data. Customers must now be able to consent to the use of their data and also have the right to erase that data upon request. By May 25, 2018, companies doing business in the EU with access to customer data will need to be compliant.
Although the GDPR was passed in the EU, it does not only encompass marketers in the EU but all companies that process data from consumers within the EU. Organizations that remain non-compliant come May will face fines of up to 20 million euros ($24 million) or 4 percent of the organization’s annual global revenue –whichever is greater. According to a recent report from Iotec that polled 250 senior marketers, 66 percent of respondents cited transparency in data use as the area in which they expect transparency from ad tech vendors.
In light of recent events, distributed advertising systems also offer the added advantage of better privacy protection by default as a virtue of its distributed design. Since the identification information, and the insights from AI do not reside with the same business entity, impact of compromise of any individual entity is likely to be very limited. Also, potential of misuse of the compromised information is greatly reduced.
GDPR is, therefore, a force for good as it will help cleaning the ad-tech industry from bad actors and help advertisers, publishers, and ad-tech vendors to grow in a better user-centric ecosystem. However, advertising ecosystem still needs to take more initiatives to self regulate and promote good ethical practices, alongside compliance to existing regulations.
Q: What trends do you believe will emerge in the next year in regards to AI-powered programmatic advertising?
A: With AI on the rise, we should expect to see more products that streamline the interactions of the different actors across the programmatic advertising value chain. Hence, with the help of AI, advertising will be more personalized and as a consequence more relevant and less intrusive, which is a step forward towards a positive browsing experience, making the freemium content model sustainable.