At the grassroots level, and at the risk of dumbing this down a bit, programmatic advertising is the use of automation and digitization to purchase and deploy advertisements on digital platforms.
Contemporary, traditional digital advertisement deployment is a process of lengthy bids, negotiations, promises, proposals, and contracts. Programmatic advertising uses AI (Artificial Intelligence) and ML (Machine Learning) to streamline this process.
AI In Programmatic Advertising: The Why
It is no secret that we have moved into a time of bombardment, not by explosives, but by information.
Wherever we look, wherever we go on the internet, we are getting our senses assaulted by some sort of information, resulting in a complete overload.
Amidst this chaos of companies and brands vying for our attention, it is nothing short of a miracle when advertisements meet their target audience.
Here is where the advancements in the technology of the previous two decades come in: with a spanking new solution called programmatic advertising.
Programmatic advertising (and programmatic advertising companies use artificial intelligence to improve the targeting of (paid) advertisements, to personalize them even more than we have seen in the past, and to tail the consumer advertisement experience even further than it already is.
The benefits of personalized advertisements need not be discussed – you probably know about those already.
What does programmatic advertising consist of?
Really quick, and just for your general knowledge, the process of programmatic advertising assisted by AI and ML consists of the following:
1. RTB: Real Time Bidding: when prices are decided in real-time through auctioneering.
2. PMPs: Private Marketplaces, open only to select advertisers under conditions.
3. SSPs: Sell-Side Platform: These allow publishers to sell in real-time too.
4. DSPs: Direct Sell Marketplaces: Allows buying across platforms.
What are the key components of AI in Programmatic Advertising?
It's a simple truth that machines crunch the industry numbers better, faster, and more precisely than any human can ever hope to, which makes artificial intelligence particularly proficient at the following core pillars of programmatic advertising:
● Analyzing internet behaviour information to identify potential customers.
Example: If a user frequently returns to a specific product/ category of products on the internet, AI can generate advertisements personalized to that user, targeted at that space.
● Analyzing clustering patterns to target these identified potential customers.
Example: If there are multiple users accessing similar sectors of products/ services across the industry and along similar media (e-commerce/ blogs, etc), then advertisers and marketers can club these potential customers together (clustering) and let the programmatic advertising AI take over the campaign(s).
● Custom-making messages for hyper-personalized communication.
Example: Based on the user's history and past interactions, the AI can design, create, deploy and then analyze the results of what has come to be known as a “hyper-personalized” communication channel.
● Analyzing user activity to identify the most appropriate channel to get the advertisement into the users’ spheres of view (social media, email campaigns, etc.)
Example: The AI will recognize and compensate for the user's engagement preferences such as video, text, emails, etc. by weighting the channels by the preferences of the user. For example, if a user engages with 30% of videos, 20% of images with text, and 5% with emails, with programmatic advertising, the algorithm may deduct weightage from the emails and assign more videos to the target audience.
● Pinpointing the best times to launch these programmatic advertisements so that they get the most reach.
The programmatic advertising artificial intelligence algorithm will take into account things like when a user group is most active on social media, when they work, etc, and generate targeted ad placement campaigns to coincide with these times in an attempt to boost engagement with the programmatic advertisements.
These were the sections of advertising where artificial intelligence can increase efficiency, but it is at this point that we must pose the question as to what the advantages of including artificial intelligence in advertising are.
Pros of Programmatic Advertising
Of the many benefits of programmatic advertising, the most crucial aspects of the inclusion of AI in advertising are listed as under:
1. Programmatic advertising optimizes ad spending: One of the main benefits of programmatic advertising is that it helps advertisers, and marketers and other campaign management stakeholders ascertain where they should cut back and where they should increase their ad spending. The AI will monitor the various channels and mediums as well as keep a close, constant eye on how the various campaigns are performing. Then, based on this data, the AI will recommend optimizing changes to the current standing ad spending budgets.
2. Programmatic advertising targets better audiences: Another one of the pros of programmatic advertising is that the audiences that it targets for you are much more specific than what even your best group target analysis could ever produce. The programmatic advertising AI does this by analyzing huge amounts of data sets, which include (but are not limited to) the following:
● Browser Cookie Data (Purchases, Preferred Payment Methods, Shopping Cart Contents, Website Visits, Dwell Times, Redirection Paths, and similar cookie data)
● Sociographic Data
● KPIs (Key Performance Indicators) such as CTR data, Conversion Rate Data, Visibility Data, Impression Data, and more.
● Demographic Data
● Preferences of the user
● Campaign Cost Data like bid costs and total costs per campaign
● Geographical Data, along with timestamps (to indicate the preferred engagement time on the users’ part).
● Psychographic Data
3. Programmatic advertising allows quicker changes in campaign focus: A huge benefit of programmatic advertising is that the AI can analyze the campaign results and tell the marketers exactly what is working for them, and also what parts of their campaign need changing. This enables quick and enhanced emphasis on campaigns that are working, and timely shifts with respect to campaigns that are not performing as they should.
4. Programmatic advertising reduces wastage as the campaign is data-driven: and by virtue of pinpointing those aspects of the campaign that are not hitting the mark, these can be cut back on, saving both material (money) as well as human resources (time, planning, etc).
5. Programmatic advertising allows marketers and advertisers to view campaign effects in real time: By virtue of the information analysis of the various sets of data being in real-time, the effects of any changes made to the campaign will also appear in real time themselves. This will allow campaign management stakeholders to make corrective changes in real time to steer the campaign where they feel it should go.
Side note: as with most other things IT-related, programmatic advertising does not come cheap, especially in this day and age of expansion. According to Salary.Com, the average salary for a programmatic advertising media specialist falls between 89,072 USD to 122,950 USD per year, plus benefits.
This is where you can give remote sourcing your programmatic advertising talent a chance: it gives you access to a talent pool that is not limited by the demarcations of geography or time, plus, you will get the most competitive rates.
In addition to that, if you choose to hire your talent through a programmatic advertising company, they will take care of all aspects of hiring for you, such as knowledge checks, reviews, etc.
Endnotes: The Future?
After the GDPR (General Data Protection Regulation) rules were made mandatory norms for all EU countries on the 25th of May, 208, the death of programmatic advertising was announced.
Luckily, things have taken a very different turn with the GDPR only requiring more transparency and the 2019 ePrivacy Regulation only asking for user consent; neither of these banned programmatic advertising completely.
Thus, we can safely say to you that programmatic advertising and programmatic advertising companies will only be on the rise, which is why it is a smart idea to introduce at least some of your marketing campaigns to AI-based programmatic advertising.
After all, all data points to it being the future.
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