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How AI Is Consolidating the Programmatic Advertising Ecosystem

How AI Is Consolidating the Programmatic Advertising Ecosystem

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Many companies are trying, or at least hoping, to get a seat on the artificial intelligence rollercoaster. The profound transformation taking place in programmatic advertising ecosystem offers a template for other parts of the economy.

What is the true potential of artificial intelligence (AI)?

AI 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.

It’s happening faster than many of us realise. 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.

Programmatic advertising

Since the beginning of the current AI boom, digital advertising has experienced a metamorphosis. AI-powered media buying has changed the landscape.

The chief beneficiaries of this change are Facebook and Google. The duopolists have built a new kind of advertising ecosystem where buyers and sellers will find it easier to identify and evaluate your audience, and campaigns perform better than they ever have. Anyone that advertises on Facebook or Google profits directly – perhaps without realising 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 optimising campaigns. 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.

As AI becomes more deeply entrenched, industries are competing technologies now via for supremacy.

Most serious ad-tech players have developed proprietary solutions for analysing audiences. Originally based on incomplete and enriched data, these platforms now use data management platforms (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 analyse 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 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 – only with a combination of machine learning and artificial intelligence can we use our resources to their full potential.

One such resource is the bidstream data, which offers a largely unexplored goldmine of data. A suitably designed algorithm can watch your stream for any granular movement that might affect your monetisation strategy, and then translate those movements into actionable recommendations.

By switching from traffic-based model to an audience-based model, you can increase your cost per mile (CPMs) and fill rates while cutting operational costs.

AI breaks down the barrier between brands and content creators. It drives efficiency and transparency across the entire value chain at the same time as facilitating a fierce competition for ideas, talent, and resources. If you hope to put your company in a winning position, I suggest you get moving.

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Moti Tal

Moti Tal

    Responsible for creating and implementing Simplaex’s innovation and technology strategy, Moti leads the R&D and product activities within the company.

    Moti is a business oriented tech guy with more than 18 years’ experience in the high-tech industry. With his extensive tech knowledge, he founded Simplaex in 2014 developing new innovations capable of disrupting the ad-tech market.

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