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How machine learning is changing the programmatic advertising industry

By JF Côté
May 16th, 2018

We all know that the use of machine learning is growing in the marketing world. With predictive learning capabilities, machine learning programs have and will continue to fundamentally change the digital marketplace, but do we know what impact machine learning will continue to have on digital advertising specifically?

Machine learning and artificial intelligence

To correctly understand the workings behind machine learning — and its growing effect on advertising — we must take a more in-depth look at the driving ideas and innovations that are pushing the borders of the frontier.

Let’s start with an easy example: food. Over time, our brains identify foods based on color, texture, and taste. We eventually develop preferences that help us know when we are eating something we like or something we don’t. Our brains are great at identifying patterns and applying those patterns to future decisions. Artificial intelligence (AI) and machine learning strive to operate similarly. Modern machine learning processors can make decisions based on algorithms that are designed to achieve the best possible outcome. Like our brains, these algorithms function using comparative reasoning, analyzing and identifying patterns to provide more meaningful results of computing.

As the potential of programmatic advertising expands within the advertising world, the need for more advanced AI and machine learning will also develop, contributing to increased efficiency, performance, and successful data utilization. With efficiency and effective data use, companies can optimize their ROI, avoiding waste with truly intelligent machine learning tools.

Three of the biggest names in the advertising world – Facebook, Google, and Amazon – have begun investing heavily practical AI and machine learning solutions that are being implemented live and in the now. These three nexus companies, though, aren’t the only ones. Apple, for example, included a devoted machine learning processing core in their newest phones. With such honed computational power being in our pockets every day and the tech to utilize it on the rise, machine learning in advertising isn’t just a prediction for the far future; it’s the present. Those who are watching closely can put their company in a position to grow and thrive alongside the evolution that is happening now, instead of following it.

Automating bids and budgets

Automated bidding and budgeting one of the core components of how machine learning and advertising intersect. With the implementation of a programmatic display ad campaign, features can be activated to distribute budgets toward line items within an order automatically.

Additionally, ideal ads to bid on can be determined with the aid of machine learning processes. This might include optimizing bids by calculated, viewable impressions. A machine learning application would evaluate visible online space and execute bids on ads that would help ensure that the corresponding ads are placed properly to maximize impressions. As a result of this approach to placement, an ad purchased by programmatic bidding has a higher likelihood of reaching the desired audience, improving the outcome for all parties, especially if the automated bids are not blind to changing data. Machine learning allows for automated bidding solutions that react dynamically to changes in trend, needs, and budget.

Data modeling and predictive analytics

Machine learning is also being implemented to achieve real audience insights and to develop successful and productive approaches to data collection. Currently, data-driven marketing is growing in both popularity and value, and machine learning has proven useful to this developing marketing approach. Algorithms are used to create pools of audiences that correspond to consumer patterns, preferences, and online activity. Intelligent data collection gives advertisers and marketing professionals access to a broad swath of data which can help drive up the efficacy, reaction, and meaningful visibility of ads.

There can be no doubt: Machine learning is taking digital marketing and digital business by storm. It will be interesting to watch how these trends shift in the coming years, and how online businesses and advertisers adapt. If there is anything to be learned from the rapid pace of evolution in tech, it’s that reacting to changes responsibly and swiftly will put any company on the cutting edge of their industry.

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