machine learning: the next revolution in online advertising

Machine LearningThe Next Revolution in Online Advertising

Cameron Hudson | FILM240: Media & Culture

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With paid media, advertisers are paying per click or per view [1], so every ad needs to be carefully chosen to lead to animpression

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It’s about targeting:

Showing the

right people the

right product at the

right time

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“Marketers are putting a premium on .the ability to unearth data about .

consumers to improve ad .targeting.” [2]

-Wall Street Journal

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“This requires an ability to capture data and turn that data into value for the customer by combining big and little data” [3]

-Harvard Business Review

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“More data has been created in the past two years than in the entire previous history of the human race” [4] but…

That data is growing fast:

-Forbes

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We’re not doing anything .with it, “only about 0.5 .

percent of that . data is ever

analyzed” [5]-MIT Business

Review

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USEthat much data?

So how do we

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Machine Learning (ML) isabout writing algorithms that let computerslearn to interpret data and perform tasks and to automatically improve their accuracy [6]

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The ML algorithm looks for correlationsin data and adjusts behavior of a service, such as ad insertion, based on what it’s been given

It also improvesperformance as new data is processed

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And Machine Learning .is already all around us: .

Apple’s Siri uses . machine learning to . better understand .

user requests . based on past .

experience[7] .

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A machine learning algorithm can identify which market segments are reacting to an ad and targetfuture campaigns based on what it learns[8]

In advertising,

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Media6Degrees, a machine learning company, partnered with researchers at NYU Stern School of Business to apply machine learning to targeted display advertising[9]

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Working for a shoe brand, the researchers consistently exceeded the client’s target return on investment by 220%, at times by up to 1000%[9]

The resultsimpressed:

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In a head to head test against .traditional ad networks for .

car brand Infiniti, the . machine learning . algorithm delivered .

3x more clicks on ads[9]

8xmore actions towards a sale[9]

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To Infiniti, Increasing actions is morevaluable since “digital interactions influenced 36 cents of every U.S. dollar spent in a retail store […] in 2013”[10] -Gian Fulgoni

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Marketing firms are starting to notice, collaborating with computer science researchersto get more value from their data[11]

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-VentureBeat

[12]

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In an age where advertising is “just part of our surroundings, […] a kind of cultural backdrop”, [13] machine learning may be the key to standing out and creating lasting impressions

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Sources 1[1] Matrix, S. (2017, January 31). The New Media Landscape: Integrated Marketing Mix &

Communications. FILM240 Media & Culture. Kingston, Ontario, Canada: Queen's University.

[2] Marshall, J., & Vranica, S. (2015, June 27). Business News: In Cannes, Advertisers Try On Digital. Wall Street Journal.

[3] Bonchek, M. (2014, October 10). Making Sense of Owned Media. Harvard Business Review.

[4] Marr, B. (2015, September 30). Big Data: 20 Mind-Boggling Facts Everyone Must Read. Retrieved from Forbes: https://www.forbes.com/sites/bernardmarr/2015/09/30/big-data-20-mind-boggling-facts-everyone-must-read/#5503a04917b1

[5] Regalado, A. (2013, May 3). The Data Made Me Do It. MIT Technology Review.

[6] Hern, A. (2016, June 28). Google says machine learning is the future. So I tried it myself. The Guardian.

[7] Weinberger, M. (2016, September 3). Apple is facing a crisis of salesmanship. Business Insider.

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Sources 2[8] Shortland, R., & Scarfe, R. (1995). Digging for Gold. IEEE Review, 5(41), 213-217.

[9] Perlich, C., Dalessandro, B., Raeder, T., Stitelman, O., & Provost, F. (2014, April). Machine learning for targeted display advertising: transfer learning in action. Machine Learning, 95(1), 103-127.

[10] Fulgoni, G. (2014, December). “Omni-Channel” Retail Insights and The Consumer’s Path-to-Purchase . Journal of Advertising Research, 54(4), 1-4.

[11] VerticalNews. (2014, May 3). Addictive Mobility Collaborates With University of Toronto to Strengthen Their Data Scientist Team. Marketing Weekly News, p. 75.

[12] VB Staff. (2016, December 5). How machine learning and AI will impact your marketing forever. Retrieved from VentureBeat: http://venturebeat.com/2016/12/05/how-machine-learning-and-ai-will-impact-your-marketing-forever-vb-live/

[13] Matrix, S. (2017, January 24). Promotional Media & Analyzing Adverts: Consumer Culture. FILM240 Media & Culture. Kingston, Ontario, Canada: Queen's University.

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