SAN FRANCISCO, May 4, 2018 – Artificial intelligence. Machine learning. Automation. These words have been buzzing through seemingly every industry over the past several years. Many people have a rough idea of what automation means in a factory setting or how giant e-commerce sites and search engines use AI and machine learning in their business, but what does it mean for advertisers and why have they been moving towards this trend?
By its nature, digital advertising is very measurable. From form submissions to website visits, to clicks and conversions generated through paid search, digital advertising can generate millions of measurable interactions. Automation allows advertisers to quickly and efficiently organize and capitalize on the value these vast data sets provide.
For a simple example let’s say you’re an advertiser in charge of a paid search account with 100 high volume ad groups each containing 4 active ads. Tracking the performance of all 400 ads manually would be extremely labor intensive. Data would be coming in at a rate you may be simply unable to keep up with. The results would be wasted spend on underperforming ads. However, with automation it’s possible to set automatic rules where high performing ads are favored.
Optimizing ad rotation, as explained above, is something most digital advertisers will be familiar with, but this is a relatively simple example of what automation can do. In the not too distant future, advertisers will be able to automate based on more complicated emotional connections and psychological behaviors exhibited by consumers. The results will create competitive advantages and allow brands to differentiate and connect with their audiences in ways that they never could before.
As the automation hype-train continues to roll down the tracks, it’s important to remember that the industry is only at the beginning of this movement. By some estimates only 10% of advertising processes are currently automated, whereas by the year 2022 we may see as much as 80% automation. With digital advertising spend expected to reach over $330 billion annually by 2020 (double the amount spent just a few years ago) it’s clear that sophisticated automation will continue to be a primary driver of opportunity for the advertising industry.