What was once considered a futuristic concept is now taking the advertising industry by storm. Programmatic advertising is the use of automated buying and selling of online advertising space. Add in AI to the mix, and the current advertising landscape is undergoing a dramatic restructuring.
AI’s revolutionizing the way brands and individuals are targeting audiences and optimizing their ad buying processes. Let’s take a closer look at the impact of AI on programmatic advertising.
Understanding the Intersection of AI and Programmatic Advertising
Before the introduction of AI human resources were involved in doing a lot of heavy lifting when it comes to advertising. However, now that’s completely different. With the evolution of technology, AI has helped take away a lot of the pressure. Artificial Intelligence has made ad placements, targeting, data management, analysis, and campaign optimization much easier.
Here are some of the main areas where AI is having an impact on programmatic advertising:
Bid Optimization
Before the intervention of AI, ad bidding strategies were entirely in the hands of people. Due to this, determining the best bids was a matter of analyzing the audience, optimizing the ad creatives, and determining the ideal placement. Managing all these tasks as an individual would be quite the hassle and often make it challenging to optimize your bid.
However, with the assistance of AI it becomes much easier to perform all these tasks. AI will take control of the ideal audience to target, which creatives work best, and also determine the ideal online placement for the ad.
It doesn’t just stop there as the algorithm is fed more and more data, the AI continues to optimize the ad to find the best possible mix to increase CTR and get the best results. You can also set a specific metric to optimize the ad performance depending on your goals.
Audience Segmentation
One of the key aspects of ensuring that your ad is successful is targeting the correct audience. If you don’t target correctly, it doesn’t matter how good your creative is, the ad simply won’t convert.
Through the use of AI, ad platforms can effectively segment their customers through building detailed user profiles. As AI will collect and analyze the data received about browsing history, past purchases, demographics, and several other variables.
Through this process, The AI will be able to generate the ideal customer profiles to target. Additionally, it’ll also be able automatically adjust the bids, to effectively target customers that present the highest potential.
Effective segmentation will allow users to generate campaigns that target users who have the highest likelihood of conversion. It also helps marketers save precious time and resources that can be directed elsewhere to achieve higher productivity.
Ad Creative Optimization
As AI continues to advance and improve, it’s starting to play a more important role in the Ad creative as well. The development of AI image and video generation means that you can easily create high quality ad creatives with just a few clicks.
All you need to worry about is ensuring that you use the correct prompts so you can direct the AI model to produce the results you want. Aside from the design of the ad, AI can also play a major role in helping with the ad copy.
Language models are getting more advanced and are able to generate content of a much higher quality than humans. It’s particularly useful for when you need to create a large number of ads and run A/B testing.
Additionally, these language models also allow you to create ad copy that is catered to specific customer profiles. It’ll accelerate your content generation by a significant margin.
Fraud Detection
One of the most underrated ways that AI’s helping change programmatic advertising is through fraud detection. Due to AI’s unparalleled ability to analyze large amounts of data and identify patterns, it can detect issues that a human observer would otherwise not be able to pick up.
So in the case of any bots frequenting the ads, AI can identify them easily as they exhibit completely different patterns of behavior. Using the same type of pattern recognition, AI can also identify potential click fraud IP addresses and separate them from negatively impacting your actual results.
Key Benefits of AI in Programmatic Advertising
Now that you have a better understanding of how AI intersects with programmatic advertising, let’s take a look at what are the key benefits for users that are looking to implement AI in programmatic advertising.
Increased Efficiency
AI helps streamline operations and thanks to the technology it makes it much easier for the marketing team to manage their advertising. A lot of the tasks that were previously handled manually by the marketers will now be managed through the AI.
Not only will it make the process more efficient, it’ll free them to focus more on the overall strategy and creativity.
Improved Targeting
Another major benefit of AI is that it significantly improves targeting. Its ability to analyze major datasets and identify potential patterns in consumer behavior, allows users to generate profiles. The increased precision helps ensure that your ad will reach the correct audience at the correct time.
Enhanced ROI
Through the use of AI-powered platforms, the marketing team can monitor ad performance and make any adjustments in real-time to maximize ROI. It includes optimizing bid strategies, creative rotations, and targeting the parameters.
Enhanced Personalization
Thanks to AI’s ability to create personalized customer profiles and analyze individual user data, they can create highly personalized ads that will resonate more and drive more conversions.
AI-Powered Technologies in Programmatic Advertising
The field of AI is quite vast and contains various different technologies. Here’s a breakdown of the most important AI-powered technologies that have functions in programmatic advertising.
Machine Learning
Machine learning is a subset of AI that focuses on the use of data and algorithms which allow the AI to imitate the manner in which humans behave.
Machine learning algorithms work in programmatic advertising by analyzing large datasets in order to predict user behavior, their preferences, and the overall likelihood of conversion.
Additionally, the models go through data and also determine the optimal bid price and placement, making real time adjustments according to the data they receive.
Lastly ML can effectively analyze the performance of different ad sets and see which one is offering the best performance.
Natural Language Processing
Natural language processing is a branch of artificial intelligence that allows computers to understand, generate, and manipulate the human language.
There are two main uses of NLP, the first is sentiment analysis. NLP can analyze text data, such as social media or product reviews; these allow users to understand consumer sentiment and tailor their ads accordingly.
The other use of NLP is keyword extraction, it involves identifying the relevant keywords from the ad copy and then target the users who are searching for the specific terms.
Computer Vision
Computer vision is a field of artificial intelligence that allows computers to take information from images, videos and other inputs.
One of the main aspects of computer vision is image recognition. Computer vision analyzes images and videos to identify objects, scenes, and people. It can be applied on target ads on the basis of visual content.
Another aspect of computer vision is ad fraud detection, it helps detect fraudulent activities that involve click fraud or viewability fraud, by analyzing visual elements of ad impressions.
All these AI technologies work together to create a programmatic advertising ecosystem which is more complex and effective. Through automating tasks, improved targeting, and campaign optimization, AI is helping significantly improve results and maximize return on investment.
Conclusion
Artificial Intelligence advertising is revolutionizing the way digital marketing works. By taking advantage of AI’s ability to analyze large amounts of data and optimize ad sets, marketers can significantly improve the efficacy of their advertising.
If you’d like to learn more about how AI can have a positive impact on your business, drop us an email at info@rtdynamic.com and let our AI experts find the best solution for you!
