The future of AI in Programmatic Advertising: What lies ahead?

Authored by Ravish Yadav, Founder & Director, Wiredus Media Pvt Ltd.

What is Programmatic Digital Advertising?

The simplest way to explain programmatic digital advertising is that it involves automated digital ad placement in real-time, such as ads seen on websites or video ads before streaming videos. The “programmatic” part refers to the algorithms behind the ads that instantly bid and place ads digitally in an automated fashion, regardless of ad format like images, videos or audio. This real-time automation is highly effective for digital ad delivery.

Current Use of AI in Programmatic Advertising

Programmatic digital advertising, which involves automated real-time digital ad placement, is becoming increasingly reliant on AI. Media investment holding group GroupM predicts that by 2032, 90% of media will touch AI in one way or another. AI is currently used in programmatic advertising to take over manual tasks and perform heavy data analysis. It aids in efficient ad placement and targeting, as well as providing accurate data-driven analysis for campaign optimization. Machine learning algorithms optimise data across various dimensions in real-time, maximising efficiency and helping to achieve campaign goals. AI also creates high-performing audience segments with objectives, ensuring ads reach those most likely to convert. 

The Future of AI in Programmatic Advertising

• The Era of Generative AI: Generative AI, which employs machine learning algorithms to produce new content such as ad copy or creative assets, is advancing at a rapid pace. Advertisers are likely to use it more for automating ad creation and testing at the personal level, enabling a speedy and efficient development and iteration of new ad concepts. Maintaining original content will be crucial, and learning advanced prompting techniques for generative AI will be an essential skill for agencies and advertisers.
• Contextual ads with Ultra-Personalised Messaging: The rise of generative AI allows brands to achieve mass personalisation by automating the process. This means businesses can create personalised content without manual design or writing. Using Generative AI, businesses can create large data sets to create personalised content that is more likely to be relevant to each individual, improving personalization accuracy and campaign effectiveness. 
• Advanced Bidding Optimisation: AI implementation is benefitting programmatic DSPs through bidding optimization. With pattern recognition, the AI assigns a value to users, helping advertisers prioritise worthwhile auction bids over unnecessary inventory purchase. The aim of a good digital marketer is to ensure success by hitting the ideal customer with the brand’s advertising campaign; this means being able to place an ad in front of them whenever they go online. With AI, advanced bid optimization will lead to improved campaign spending via bid shading. This may lead to them winning the auction at a lower cost, while still achieving their desired goal of reaching the target audience. 
• Highly Accurate Targeting: AI and machine learning will become even more critical in shaping programmatic advertising targeting. Advertising success relies on being able to reach specific segments of the audience right now, which is made possible by their current importance in audience targeting. Through analysis of demographics, browsing behaviour and interactions, machine learning algorithms will fine-tune targeting approaches in real-time, resulting in improved programmatic ad purchases. Through this approach, marketers and advertisers can also determine which customers behave similarly to those in their intended audience. This is called lookalike modelling. A seed audience, such as previous clients or significant potential clients, supplies lookalike models with data. Based on this profile, we can locate other consumers who match this individual's characteristics.
• Better Quality Assurance: AI is likely to help advertisers improve their quality assurance processes. For instance, AI models can undergo training to identify patterns that suggest ad fraud. By analysing extensive datasets and real-time ad performance data, AI algorithms can detect irregularities, alert brands about suspicious activities, and protect their advertising campaigns against fraud. AI is improving at finding outliers, which can be useful for detecting errors before they escalate into serious problems.
• Increased User Privacy: User privacy has become a top concern in the ad tech industry. New rules around personally identifiable information (PIIs) will significantly impact the industry as they play a major role in identifying audiences for targeting and measurement. Advertisers can use natural language processing to address this issue by identifying customer sentiment and journey to enable cohort or topic-based targeting.

Will AI replace human advertisers? 

The future of advertising is going to be a unique blend of human and AI collaboration. AI is not expected to replace human advertisers. Instead, it’s being used to automate repetitive tasks, allowing advertisers to focus on strategic and creative work. As AI technology advances, the challenge will be determining which tasks are best suited for AI versus humans. Rather than replacing humans in advertising, AI is enhancing the process. And we’re optimistic that the human-AI harmony will revolutionise the digital marketing landscape in the best way.

As AI-driven opportunities expand, partnering with an experienced agency can smooth your transition to the future of marketing. The integrated marketing agency, possesses extensive expertise in programmatic advertising. We keep abreast of emerging AI technologies and understand how to strategically implement them. Whether you require assistance in planning and optimising existing marketing campaigns, or are interested in exploring the potential of generative AI, our team of specialists is here to help. Get wired with us to discuss how we can enhance your brand’s reach!