Blog Post

Programmatic Media Buying 101: What is the Difference Between AI, Machine Learning & Programmatic?

February 20, 2018 - Karen Moked

The world of digital advertising and programmatic advertising has developed its own language in the last couple of years, full of terms that are commonly heard and used everywhere but mean something very specific when attached to the word advertising. Most recently it’s almost impossible to read an article or even talk about media buying without bringing up the terms Artificial Intelligence (AI) or Machine Learning. The terms AI and machine learning are often used interchangeably but they are different. What is the difference between the two and what should they mean to us or me as a marketer or CMO?

AI for Programmatic Buying

Artificial intelligence is the concept of reproducing human intelligence in machines so they can execute on activities that normally would require a human brain to be involved in, such as making data-based decisions.  By using AI-powered systems brands and advertisers case save money and time by completing tasks faster than us mere humans and make less mistakes.  When you apply this to the programmatic media buying industry, you bring efficiency to the media buying process, freeing people who’s job it is buy media from the more tedious and allowing them to focus on the strategic and creative elements of their jobs.

The reason digital media executives keep talking about AI technologies is that they allow us to have algorithms that analyze a user’s behavior, allowing for real time programmatic campaign optimizations towards consumers who are more likely to convert. Advertisers then have the ability to gather all this rich audience data to then use it to be more accurate with their media buys and overall targeting tactics – ultimately spending less money and time and bringing in a higher ROI.

Will Machine Learning Replace Media Buyers?

The words Machine Learning can conjure up images of old sci-fi movies in which someone develops an intelligent robot that then dominates its creator or destroys a large city… leading to many questions about how this technology could affect the digital media industry.
Machine learning is a type of Artificial Intelligence that provides computers or robots with the ability to learn things by being programmed specifically to take certain actions, improving their knowledge over time, much in the same way our brains do.
Computers using machine learning focus on imitating our own decision-making logic by training a machine to use data to learn more about how to perform a task.

Imagine you ride your bike to work every day. Over time, after trying different ways to get to work, you will learn which route is faster or maybe which road or path is better according to the day of the week or based on the weather outside. This is exactly how machine learning works. You feed the computer or algorithm with large amounts of data so it will analyze information from the past and learn from it to apply the learnings to any new data it receives in the future.

When applied to programmatic advertising, machine learning algorithms can analyze large volumes of data from difference sources and draw conclusions from it. It means you can almost replicate the brain of an experienced media buyer in a machine or algorithm so it becomes capable of  predicting, planning and optimizing media. Almost…. but not yet, though the machines can certainly make programmatic advertising more efficient, faster and easier to implement, there remain many factors which need human brains to input link the machine learning to an overall media buying strategy.

So How are AI and Machine Learning Connected to Programmatic Advertising?

Programmatic advertising is the automated process of buying and selling ad inventory through an exchange, connecting advertisers to publishers rather than having to make individual deals with each publisher. This process uses artificial intelligence technologies to improve efficiency and make better decisions for the advertisers with their budgets.
There is a lot of investment being made in marketing and ad buying technologies to leverage AI.  Companies like Xaxis, are betting heavy on AI for improving their future Programmatic Buying Platforms.  Fo right now marketers are using AI to stitch massive amounts of their data together, but it still hasn’t replaced human analysis.  For media agencies, Artificial Intelligence is still more a buzzword or a catchphrase to get peoples attention.

David Lee, programmatic lead at ad agency The Richards Group, said that he regularly gets pitches for AI-enabled products but the AI part of the products usually “doesn’t seem to affect performance outside of being a buzzword.”

You need Machine Learning to feed AI but you don’t need AI for Machine Learning. What that means is that machine learning is the technique — using algorithms to process data, learn from insights and make predictions for future programmatic campaigns which then trains the AI.
Both Machine Learning and AI are here to stay.  If you are a marketer or a media buyer, get familiar with these terms as they will continue to occupy the press and blogs like ours.  But for now they are not taking over for humans, that’s still in the sci-fi section of the video library.

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