Technology | Media | Telecommunications

Friday, November 10, 2017

Enhancing Digital Advertising with Artificial Intelligence

Since the first online banner advert in 1993, advertising on digital platforms has seen significant developments. According to the Interactive Advertising Bureau, in 2013 digital advertising revenues overtook cable TV advertising within the U.S. market.

The process by which advertisements reach their target audiences has advanced from being the advertiser and publisher, and now includes a plethora of ecosystem stakeholders in between.

That said, it's not an easy task to fully understand the workings behind current digital advertising value networks. There's a significant degree of ongoing consolidation, as operations begin to become siloed.

Digital Advertising Market Development

According to the latest worldwide market study by Juniper Research, digital advertising spend will grow by an 18 percent compound annual growth rate (CAGR) over the next five years -- rising from $184 billion in 2017 to $420 billion in 2022. This include advertising spend across mobile, desktop, wearables and digital-out-of-home signage.

Contrary to the prior trend, the annual growth of online advertising spend will slow to only 4 percent globally by 2022, due to the impact of ad blocking adoption across desktop devices and the increasing usage of mobile devices as the primary means for browsing.


According to the research findings, advertising platforms will seek a greater degree of control over the types of ads being blocked through increased involvement in ‘Acceptable Ad’ initiatives.

Through these initiatives, digital ad platforms will shift focus to encouraging the use of adverts that are not blocked. While revenue loss owing to ad blockers will account for 17 percent of online advertising spend in 2017, this loss will be mitigated and increase by only 2 percent over the next five years, reaching 19 percent by 2022.

The research predicted that nearly 75 percent of all delivered digital ads will use artificial intelligence (AI) as a means of user targeting in 2022. Data sharing partnerships will enable publishers to increase targeting efficiency, utilizing acquired data -- such as geo-location, browsing cookies, and cross-device identification -- to provide highly tailored digital ads.

Outlook for Digital Advertising Growth

Despite consumer objections to perceived invasions of privacy, digital advertising platform providers will continue to seek innovative means of data collection to provide personalized online ads.

"The critical factor for maintaining advertising revenues lies in increasing the quality of experience for browsers. Whereas ad blocking will eliminate intrusive ads, platforms leveraging AI for targeting will deliver more personal and accepted ads," said Sam Barker, senior analyst at Juniper Research.