All advertising agencies have conundrums like where to to advertise and how frequently. This involves selecting suitable publications (or, more commonly, websites or apps) and targeting the consumer demographic (like is this ad intended for millennials or retired baby boomers?) Getting this right can pay dividends, getting it wrong can prove costly.
To help with the process, advertisers are increasingly turning to automation and alogorithms to ensure that data driven decisions are made. Here information about a person’s browsing preferences can be crucial in terms of targeted content. These are some of the points raised by TechRepublic’s Dan Patterson in an interview with the technology editor of Ad Week, Josh Sternberg.
According to Sternberg, online content needs to be paid for and there are two ways to do this: “As audiences, we are either paying with our wallets through subscriptions or through our eyeballs with attention.”
However, the market for advertising is becoming more competitive and advertisers want a return on their expenditure. This is why they are investing in digital transformation technology, like algorithms.
Algorithms
As an example of algorithms used by online advertisers consider the following: Have you ever you looked for a product online and then been recommended the exact thing you need to complement it? Or have you been thinking about a particular purchase, only to receive an email with that product on sale? This, according to The Conversation, is an example of predictive algorithms at work, drawing data from transactional data, to website traffic and even social media posts, and processing it to target ads at you.
Another time and cost saving comes from automation.
Automation
Automated advertising is one of the newest ideas in online advertising. This means instead of a human deciding where to advertise, a machine makes the decisions. This could be based on sales and conversion data from advertising campaigns, where artificial intelligence takes the decision to either increase or decrease bids on campaigns depending on their monetary performance.
As Sternberg summarizes: “Algorithms and AI and automated-auction platforms, like exchanges, allow agencies and advertisers to get placement on websites for fractions of the cost of what it would be through a direct sale through that one to one relationship.”
