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AI Is Eating Advertising – And 2019 Will Be Critical For Getting It Right

Lexus recently released the first ad written by AI – and it was surprisingly good. Was it a stunt? Sure.

But it’s also a wake-up call about how AI is changing the very nature of advertising as we know it – and a preview of what’s ahead in 2019.

Already, 95% of advertisers have terabytes upon petabytes of demographic data, including personal data, location information and interests they can use to target prospects they know almost nothing about. Artificial intelligence is a way to tame that data and take it to the next level.

A recent Deloitte study affirmed this outlook – and the ROI of AI for advertising.

In a survey of 1,100 US executives from companies considered to be early AI adopters, 82% report a positive return on their investment for their AI initiatives.

That’s why I’m willing to posit that at least 80% of the digital media market will be using some kind of AI in advertising in 2019.

In the year ahead, we can expect smart algorithms that help brands and publishers find new audiences. We’ll see AI that analyzes customer behavior to make smart recommendations based on attributes such as age, gender, location and millions of other data points. And we’ll all start seeing unique web pages that are built on the fly just for us – a custom shopping catalog for one, compliments of AI.

Our industry is at the center of a seismic change in the ways people engage with the world around them. Up and coming direct-to-consumer brands in particular are built around data and leveraging it: They create value by creating a mutually beneficial, two-way relationship between the brand and the consumer, a relationship that throws off data that is vital to every part of the business. When machine learning and advanced algorithms are applied to these oceans of digital information, we can intimately understand the motivations of almost any consumer.

AI-powered conversational intelligence and voice-enabled platforms (hello, Alexa) are also radically changing our ideas of what digital marketing can do. It’s a heady time.

But technology has a way of outpacing our ability to understand what is actually going on – and that’s definitely the case with AI. As AI pervades the advertising ecosystem, we need a common vocabulary for what AI is, and what it’s not. AI is used in programmatic advertising, but programmatic advertising is not AI. Retargeting looked like magic when it first arrived, but it’s clearly not AI, either. In fact, as an industry we don’t have a common vocabulary to define what AI is (and isn’t) in marketing and how we should and shouldn’t use it.

Now that ads are delivered through a medium marketed on the promise that it would be personalized to us, mass ads don’t cut it anymore. Under GDPR regulations, for example, consumers are able to decide what information they share with companies. They trust this information will be used responsibly and in their best interest.

It’s time to define in marketing and digital advertising how we use AI to make the ecosystem better, how we build better ad experiences, how we ensure brand safety and how we help buyers and publishers find better audiences. As AI evolves we need standards and guidelines for how to use it for practical applications and for ethical applications. As smart as AI is, we need to be sure it’s not inadvertently discriminating against people in ways that are not intended.

Make no mistake: The ethical challenges our industry faces with AI are far-reaching. The recent New York Times exposé about how app makers are harvesting unprecedented amounts of personal data is just the tip of the iceberg. Together we need to ensure we are all good stewards of AI so our entire industry can grow with it. This requires a set of guiding principles that helps govern how companies communicate and use consumer data.

We need standards and best practices for efficiency, effectiveness and real safety with how the industry operates. AI leaders all have a responsibility to keep our collective commons safe, secure and thriving.

AI will have a profound effect on how brands talk to consumers and will deliver better, smarter and more relevant conversations and experiences. Consumers will get better and more relevant ads that they actually want. Everybody wins. But only if we get it right.

Credit by: IAB (@iab) and AdExchanger

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