As we press ahead into 2016 it strikes me that we are moving into an exciting new phase of digital advertising.
Today the industry embraces mobile as an integral part of the marketing mix. There is no doubting the medium’s importance and it’s set to surpass TV in terms of ad spend by next year. To uncover the next industry trend we have to look to something new in the mobile space, something which really offers to transform the way the industry works.
From robots to self-driving cars, artificial intelligence (AI) is making waves across the tech world and a splash in the newspapers. Just this week at the World Economics Forum in Davos, AI was heralded as the ‘fourth industrial revolution’ with the technology predicted to radically transform a whole host of work forces and industries.
Advertising is no exception. AI technology began to crop up in ad campaigns in 2015; the opportunities the technology presents, and its problem-solving potential, are far-reaching. While it might be some time before driverless cars hit our streets, artificial intelligence campaign optimisation is ready for adoption by the wider advertising community.
This is because artificial intelligence supercharges data and targeting. While most digital campaigns implement data to some extent, many will use this information in a blunt manner. A brand will outline their demographic and target audience. Take for example, a sports brand looking to target 18-34 year-old males with an interest in sports in order to sell the latest football boots. First and third party data will be used to identify users which fit this profile and the advert will be delivered accordingly.
While this approach is better than attempting to serve the ad to a 90-year-old woman, it lacks finesse. There are many sports fans who will never actually play football and so have no need for boots, but they will be targeted anyway because they fit the profile.
By implementing artificial intelligence, it is possible to teach the technology not to target users who have never interacted with this type of advertisement. Each time a similar campaign is run it will know who is likely to engage and who isn’t, only targeting the most relevant users.
The more artificial intelligence is used the more efficient it becomes, eliminating wasted impressions and delivering users hyper-targeted ads. Not only does this mean that ads for football boots won’t be targeted at rugby fans, but a die-hard Arsenal supporter who spends hours on football sites - but never sets foot on a pitch - won’t be receiving this equally irrelevant advertising. Campaigns which use this technology can see up to 300% uplift compared to a campaign which only used standard targeting.
It’s also fast. Artificial intelligence optimises campaigns in real-time, in stark contrast to traditional campaign optimisation which relies on an ad-ops team to make adjustments manually. With most mobile traffic occurring over the weekend, when these teams are out the office, artificial intelligence comes into its own as an optimisation tool.
While AI is hugely important at a campaign level it also impacts on the industry as a whole. If advertisers use artificial intelligence to serve better targeted ads which drive higher user engagement and campaign results, then publishers will earn higher eCPMs (effective cost per mile, which translates to the advertising revenue generated per 1000 impressions).
If they are earning more money through fewer ad placements they can clear their site of the invasive advertising that users dislike. This should improve the online experience and mean users are more likely to engage with advertising as they are only seeing one or two ads per browsing session, improving ROI for advertisers. And so the circle continues.
In my view artificial intelligence is the future of the advertising industry, not an add-on or a nice-to-have but a fundamental component of each campaign. By implementing this technology not only can we improve short-term campaign results for brands, but long-term online experiences for us all.
By Stephen Upstone, CEO and Co-founder of LoopMe
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