Kelly Scott Madison

Artificial Intelligence and the Future of Advertising

02/11/2016

 

What do new automated capabilities mean for the future of advertising? 

Professor Stephen Hawking recently warned the world that “the development of full artificial intelligence could spell the end of the human race.” While this may bring images of a Terminator-style apocalypse to the mind, it is still far fetched based on existing technology. “Full artificial intelligence” or machines that match or surpass human intelligence do not yet exist. However, artificial intelligence (AI) working in collaboration with humans is more common now and has impacted many industries, including media and advertising. It’s exciting to be able to get a sense of the future by looking at some of the ways AI has already and will continue to impact marketers and the advertising landscape. Perhaps the biggest impact AI has had on advertising is in digital media via programmatic buying and planning platforms that utilize complex algorithms to perform a variety of functions. Connecting ad buyers with sellers to serve individual users with ads at the optimal price can now be achieved with little or no human intervention. While bidding for an ad, these complex decision science systems also utilize machine learning to decide which ads should be served to which consumers.

Systems like this take into account multiple factors such as how often users are online, their browsing behavior, what types of ads they respond to the most and what types of ads they ignore. To determine cost, the data informs the bid model and determines probability of success in serving an ad to the right type of consumer. The higher the probabilityof success, the higher the bid will be. This happens billions of times a day for thousandsof advertisers, all in a fraction of a second. However, if this is what machines can do for us now, where does it go from here? In short, the answer is simply that there will be a higher volume of programmaticacross all formats. Programmatic technology has the potential to encapsulateall media buying and planning across every channel, including TV, out-of-home, print and radio, but the infrastructure isn’t yet ready for this. As tradeactivity increases in scale, it is certain that...


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