Programmatic advertising has dramatically evolved throughout the years, but much remains to be done to finally bring transparency and trust in the value chain. Moti Tal, CTO & Co-founder at Simplaex discusses what’s the true potential of artificial intelligence to solve this fundamental challenge.
Maybe you believe, like the film directors in Hollywood, that AI is an existential threat to humanity. The robots are going to kill us all! Or perhaps you suspect that AI is nothing more than a fun tool for beating humans at board games.
Good news: both of these perspectives are wrong. Artificial intelligence is neither a threat nor a triviality. Instead, it’s an immensely useful tool. AI has found applications in a surprising range of industries, from gaming to finance to medicine. Beneath all the hype and buzzwords, the technology is making serious progress.
And it’s happening faster than many of us realize. According to a study by eMarketer, in 2016 companies invested about $6 billion into AI research and development. By 2021, that figure is expected to grow to $29 billion.
Nowhere are the results of this AI explosion more clearly visible than in the automotive industry. A decade ago, autonomous vehicles were still in the realm of science fiction. Today, they’re on the market. We knew this day would come, but few of us imagined it would happen this fast.
From the outside, autonomous vehicles look much the same as their traditional counterparts. On the inside, it’s a different story. A range of highly sophisticated devices – sensors, cameras, radar systems – continuously monitor the surrounding environment to identify risks and navigate safely.
This powerful array of technology allows autonomous vehicles to drive easily on public roads. Which is perhaps the most remarkable achievement of AI in the automotive space.
Not only have we built driverless cars, but we’ve also managed to integrate them into our existing traffic systems. They are engineered to drive on the same roads, with the same signs, the same sets of rules, alongside manually driven vehicles.
(For now, at least. It’s not hard to imagine that our streets will one day be as smart as our cars.)
Just about every company in every industry is trying, or at least hoping, to get a seat on the AI rollercoaster. The profound transformation taking place in the automotive industry offers a template for other parts of the economy. Those of us in digital advertising could learn a thing or two from what the top carmakers are doing.
Since the beginning of the current AI boom, digital advertising has experienced a metamorphosis. AI-powered media buying has changed the landscape. The chief architects and beneficiaries of this change are, naturally, Facebook and Google. The mighty duopolists have built a new kind of advertising ecosystem where buyers and sellers can finally speak the same language. It’s easier to identify and evaluate your audience, and campaigns perform better than they ever have. Anyone who advertises on Facebook or Google profits directly – perhaps without realizing it – from the latest advances in AI.
Programmatic advertising has also benefited. A decade ago, it was a fringe technology used to buy remnant inventory that publishers couldn’t sell directly to marketers. In the years since, ad-tech companies have refined their techniques. Programmatic buying has become a powerful tool for optimizing campaigns. But it’s not all upside. As its popularity has increased, the programmatic ecosystem has become crowded with unscrupulous intermediaries. The industry today is plagued by hidden fees and a general lack of transparency.
There are parallels between the automotive industry and what’s happening in the programmatic space. As AI becomes more deeply entrenched, both industries have fragmented. Many competing technologies now vie for supremacy. Every serious ad-tech player has developed proprietary solutions for analyzing audiences. Originally based on incomplete and enriched data, these platforms now use DMPs and other sophisticated tools to garner deeper and more complex insights.
Programmatic advertising has made good progress, but much remains to be done. The lack of trust between supply and demand sides holds the ecosystem back. Once again, AI is the solution. Armed with the right algorithms, an AI-powered platform becomes a translator in the conversation and brings trust between buyer and seller. It helps both sides to classify their audiences reliably and accurately and analyze the true intents across the value chain, based on thousands of real-time data points.
The path forward
AI offers answers to the most pressing questions faced by SSPs and publishers. How is the demand side classifying users? Which audiences are driving the most revenue at any point of time? Which ads are driving the best responses? How do we harness these insights to offer demand partners more lucrative recommendations?
The data to answer these questions is readily available. But it’s too vast and complex for any human to comprehend. Only with a combination of machine learning and artificial intelligence can we use our resources to their full potential.
One such resource is the bid-stream, which offers a largely unexplored goldmine of data.
A suitably designed algorithm can watch your stream for any granular movement that might affect your monetization strategy, and then translate those movements into actionable recommendations. By switching from a traffic-based model to an audience-based model, you can increase your CPMs and fill rates while cutting operational costs.
This is the revolution our ecosystem desperately needs. AI breaks down the barrier between brands and content creators. It drives efficiency and transparency across the entire value chain. At the same time, the AI revolution spawns a fierce competition for ideas, talent, and resources. If you hope to put your company in a winning position, I suggest you get moving.
Published on MarTech Advisor