{"id":19070,"date":"2024-07-05T11:00:17","date_gmt":"2024-07-05T15:00:17","guid":{"rendered":"https:\/\/illumin.com\/?p=19070"},"modified":"2024-11-14T12:16:06","modified_gmt":"2024-11-14T17:16:06","slug":"ai-in-programmatic-advertising","status":"publish","type":"post","link":"https:\/\/illumin.com\/insights\/blog\/ai-in-programmatic-advertising\/","title":{"rendered":"The role of AI in programmatic advertising"},"content":{"rendered":"

The omnipresence of AI is steadily growing in the 2020s, including in advertising. Here\u2019s a snapshot of how AI is shaping today\u2019s programmatic strategies.\u00a0<\/span><\/i><\/p>\n

In the digital age, the integration of artificial intelligence (AI) into our lives is growing. It\u2019s no different in the world of marketing, as AI <\/span>slowly shapes digital advertising in front of our eyes<\/span><\/a>. While a large number of users believe AI (or specifically, generative AI) is mainly used for content creation, it has brought about several other applications.<\/span><\/p>\n

Programmatic advertising is a game-changer in the advertising industry. Combining AI with programmatic advertising is revolutionizing the way brands and advertisers target their audiences and optimize their campaigns.<\/span><\/p>\n

Today, we take a closer look at the role of AI in programmatic advertising.<\/span><\/p>\n

What is Artificial Intelligence (AI)?<\/h2>\n

Before we dive deeper into AI in advertising, let\u2019s break down the concept.\u00a0<\/span><\/p>\n

Google DeepMind <\/span><\/a>defines \u201cAI\u201d as the \u201cscience of making machines smart.\u201d That means making machines that can do intellectual tasks that humans can do such as reading and understanding text, understanding language, sensing external environments, etc. In other words, AI technology can simulate human intelligence and problem-solving capabilities.<\/span><\/p>\n

AI<\/span><\/a> lets machines learn by detecting patterns in data and making predictions from those patterns. It can then learn from those outcomes to make better and better predictions over time. Furthermore, it enables machines to digest large amounts of information and make quicker decisions.\u00a0\u00a0<\/span><\/p>\n

Digital assistants, GPS guidance, autonomous vehicles, and generative AI tools (like Open AI’s Chat GPT) are just a few examples of AI in our daily lives.<\/span><\/p>\n

However, AI isn’t just one technology. It’s an umbrella term encompassing a range of smart technologies that can learn and improve independently. Some AI technologies you might hear about are machine learning, deep learning, natural language processing (NLP), neural networks, and speech recognition.<\/span><\/p>\n

The difference between AI vs. machine learning<\/h2>\n

While AI refers to technology that enables computers to mimic human intelligence, <\/span>machine learning<\/span><\/a> is a subset of AI that utilizes data and algorithms to mimic human learning processes. AI digests large amounts of information in a short amount of time; machine learning processes those large amounts of data so it can identify, categorize, and analyze this information to provide valuable insights. AI also makes decisions quickly, but machine learning lets technology use experience and patterns to improve decision-making.<\/span><\/p>\n

In advertising, many platforms integrate machine learning to detect patterns in real-time data, letting them forecast campaign success and make necessary optimizations.\u00a0<\/span><\/p>\n

For example, marketers can use machine learning to determine where users stand in the buying journey based on past actions. Additionally, it can be utilized to discover new audiences with similar characteristics to existing customers (known as lookalike audiences) and use that information to guide them through the sales funnel.<\/span><\/p>\n

Where does AI fit into programmatic advertising?<\/h2>\n

AI-powered advertising has been a <\/span>booming trend in recent years<\/span><\/a>, including AI-driven programmatic advertising.\u00a0<\/span><\/p>\n

Programmatic advertising is an automated system that facilitates the <\/span>buying and selling of ad space<\/span><\/a> through real-time auctions. With the use of algorithms, advertisers and publishers can optimize their results. The process has always been driven by decision-based algorithms which facilitate automated media purchasing in real time.<\/span><\/p>\n

Various programmatic advertising platforms such as <\/span>demand-side platforms (DSPs)<\/span><\/a> utilize algorithms to adjust ad spending and targeting rapidly, making programmatic ad buying a perfect fit for AI applications.<\/span><\/p>\n

This efficient approach, which analyzes user data and demographics, maximizes the effectiveness of campaigns by reaching the right individuals at the right moment. It provides scalability, cost-effectiveness, and efficiency for advertisers and publishers alike.\u00a0<\/span><\/p>\n

The increasing presence of <\/span>AI in advertising<\/span><\/a> is driven by data signals generated through user interactions with their connected devices, including the type of online content consumed. This capability lets advertising platforms deliver more tailored marketing messages to users, no matter when or where they are.<\/span><\/p>\n

Current applications of AI in programmatic advertising<\/h2>\n

While human insights remain essential for designing, executing, and optimizing campaigns, AI has emerged as a valuable tool in streamlining processes and handling data-intensive tasks. Here\u2019s a closer look at <\/span>how AI plays a role in programmatic advertising<\/span><\/a>:<\/span><\/p>\n