AI making moves to dominate PPC advertising

Despite the tremendous demand for PPC advertising talent, there are already signs that smart machines are moving in to take over this lucrative business. The Drum published an article titled “IBM starts using Watson AI to buy online media in the UK” that provides a preview of a machine-driven future for PPC, SEM and other paid marketing activities:

Sitting within The Trade Desk – its media planning platform – Watson over time learns how effectively a campaign is performing for different audiences at different times, locations, devices and browser.

Based on this information, it will then only bid on inventory that aligns to any given audience, and even then will consider the size of an ad and how effective it will be in relation to those other factors.

In the US, IBM claims this has reduced its cost per click by as much as 71%, although the average hovers around the 31% mark.

This should give performance marketers something to think about. I doubt the demand for SEM or PPC advertising professionals will diminish in the very near future but I can definitely see a time when smart machines like Watson will take over paid media and put a lot of people out of work.

Postscript: Take a look at how Watson is starting to impact influencer marketing too in the Drum’s article titled “The Movie Marketing Blog: IBM Watson-powered Hollywood influencers“.

Image credit: Robot Mural from MMT

Advertising that doesn’t alienate consumers

Advertising need not alienate consumers. David Ulevitch wrote an interesting post about the the downsides of algorithmic advertising and a purely data-driven approach. I highlighted a couple comments in Ulevitch’s post and this particular one encapsulates what perturbs me most about advertising:

If your business has an algorithmic advertising revenue model where more user installs equates to more revenue dollars, you will become addicted to a metrics-tracking mindset where the user-experience is ignored, security models are just a hurdle to jump over, and the only thing that matters is more user installs.

On one hand he is absolutely correct. So many advertisers approach advertising as a data challenge to meet by directing relatively faceless consumers to ads they are probably interested in. Programmatic advertising enables advertisers to target consumers far better but there are times when the advertising model only seems to have shifted slightly from a metaphorical “spray and pray” approach to a “radar guided spray and hope” approach. It’s almost as if many advertisers have decided that ad targeting technology works well enough to relieve them of the burden to do much about the user experience.

Granted I am pretty new to the advertising industry but just based on what I have seen from the inside and as a consumer, many advertisers are missing an opportunity to change perceptions about advertising simply because they stop too soon along the path to better engagement with their target market.

Instead of seeing programmatic advertising as an end in itself, these advertisers could see it as a revolutionary platform that takes them light years closer to a fully engaged consumer and all they need to do is go that last mile and deliver a terrific experience.

Here is an example of an ad which really appeals to me. I love how the music soundtrack and the imagery really resonates with me on so many levels. I only noticed this was an ad at the end and I didn’t mind at all, the ad sold me on the brand already.

Granted not all ads we see are video ads (video is still a pretty small percentage of the display ad market) but imagine ads, powered by programmatic ad technology, that touch the right consumers at the right time and in such a personal way.

With ad-supported business models, the desire to collect as much data as possible to better target advertising to you becomes an insatiable addiction.

Data powers the ad-tech machine. There is no doubt about that and the amount of data used has practically propelled the data protection industry to incredible heights. Unfortunately a typical response to the idea that advertisers use troves of personal data to target ads is horror.

It need not be. Ads are also opportunities to tell consumers about the things they may be looking for or may find interesting based on their browsing behavior, information they give to their service providers about their preferences and perhaps even leave room for serendipitous discoveries. It sounds idealistic but this is technically possible. What is lacking is the desire to take the extra steps to make this happen.

What could advertisers do? Here are a few thoughts:

  1. Collect data from informed and willing consumers. Use meaningful consent mechanisms that inform consumers what you want from them and how you’ll use that data and then stick to that. Brands lose consumers’ trust when they lie (even little, white lies).
  2. Do something useful with the data. Collecting data just to pitch somewhat relevant products and services is a pretty weak effort. As much as you can, find out what really interests consumers and show them ads for things they have told you they want. I don’t have any answers how to make that scale but you probably have really smart people who can figure that part out.
  3. Put more effort into the ad experience. Great advertisers have this figured out and they present well designed and engaging ads. Sure, budgets are not unlimited and this is mostly a numbers game so you can’t spend too long on ad creative but a little more effort could go a long way and boost those CTRs.
  4. Pick better ad products. Consumers are faced with so many ads these days that they don’t see them anymore. It’s called “banner blindness” and it is the result of far too many ads over a protracted period of time. It may have been inevitable and, in a sense, it is probably leading to even more obtrusive ads as advertisers fight for what little attention remains from the consumers who still see the ads. Try different ad products that are more likely to reach those consumers and less likely to alienate them further. In-image ads are a great option but then I am biased.

Online advertising models don’t align your interests with your users’ interests. Justifying the invasive and insecure actions as being a fair trade for free isn’t the kind of justification any company should make …

This seems to be how many people perceive advertising and you can’t really blame them. It often seems to be the case that I am the product when I have access to a free service or product and, probably, there are times when I essentially am. That doesn’t mean that being the product is necessarily a bad thing if I know what I am trading and why.

Facebook stands out as a classic illustration of the “you are the product” argument and, more than almost anywhere else, that is certainly the case. Facebook is available to me with all its capabilities because of the revenue ads in Facebook generate. Facebook could not operate in its current form without that money and I am ok being the product here. Facebook and other, similar, services are enormously useful and while I’d prefer not to have to risk losing so much of my control over my personal data, the cost seems pretty fair when I consider what I can do with the service and the degree of control I have over my personal data. It’s not a perfect situation but it works for me.

The advertisers that make the extra effort to create better ads and share them with targeted audiences may have far better responses than even a “radar guided spray and hope” campaign. Consumers may even seek out their ads for the entertainment value (I know I do).

Image credit: Pexels

This article was originally published on Medium on 2015-02-26 as “Advertising need not be so alienating“.