The concept of self-programming computers was closer to science fiction than reality just ten years ago. Today, we feel comfortable conversing with smart personal assistant like Siri and keep wondering just how Spotify guessed what we like.
It’s not just the mobile apps that are becoming more “intelligent”. Advertising encouraging us to interact and install those apps has made its way onto a way new quality level as well. Thanks to advances in machine learning (ML), the baseline technology for AI, mobile advertising industry is now undergoing significant transformation.
AI can reduce mobile advertising fraud
In 2018, mobile ad fraud rates have doubled compared to the previous year. To tap into the expanding marketer’s ad budgets, hackers have created a host of new tricks to their playbook. According to Adjust data, the following mobile ad threats have prevailed:
SDK spoofing accounts represented 37% of ad fraud. In SDK Spoofing malicious code is injected in one app (the attacked) that simulates ad clicks, installs and other fake engagement and sends faulty signals to an attribution provider on behalf of the “victim” app. Such attacks can make a significant dent in an advertiser’s budget by forcing them to pay for installs that never actually took place.
Click injections accounted for 27% of attacks. Cybercriminals trigger clicks before the app installation is complete and receive credit for those installs as a result. Again, these can drain your ad budgets and dilute your ROI numbers.
Faked installs and click spam accounted for 20% and 16% of fraudulent activities respectively. E-commerce apps have been in the fraud limelight this year, with nearly two-fifths of all app installs being marked as “fake” or “spam”, followed closely by games and travel apps. Forrester further reports that 69% of marketers whose monthly digital advertising budgets run above $1 million admit that at least 20% of those budgets are drained by fraud on the mobile web.
If the issue is so big, why no one’s tackling it? Well, detecting ad fraud is a complex process that requires 24/7 monitoring and analysis of incoming data. And that’s where AI comes to the fore. Intelligent algorithms can operationalize large volumes of data at a pace far more accurate than any human analyst, spot abnormalities and trigger alerts for further investigation. What’s more promising is that with advances in deep learning, the new-gen AI-powered fraud systems will also become capable to self-tune their performance over time, learning to predict, detect and mitigate emerging threats.
AI brings increased efficiency and higher ROI for real-time ad bidding
One of the biggest selling points of “AI revolution” across multiple industries is the promise to automate and eliminate low-value business processes. Mobile advertising is no exception. Juniper Research predicts that by 2021, machine learning algorithms that increase efficiency across real-time bidding networks will drive an additional $42 billion in annual spend.
Again, thanks to robust analytical capabilities ML-algorithms can create the perfect recipe for your ad, displaying it at the right time to the right people. Google has already been experimenting with various optimizations for mobile search ads. The results so far are rather promising. Macy’s, for instance, has been leveraging inventory ads and displaying them to customers’ who recently checked-up on their products and are now in close geo-proximity to the store holding the goods they looked up a few hours ago.
AdTiming has been helping marketers refine their approach to in-app advertising. By leveraging and crunching data from over 1000 marketers, the startup has developed their recipe for best ad placements. “Prescriptive analytics will tell our users when is the best time to run their ads; what messaging to use and how frequently the ad needs to be displayed in order to meet their ROI while maintaining the set budget,” said Leo Yang, CEO of AdTiming.
Just how competitive AI-powered real-time ad bidding can be? A recent experiment conducted by a group of scientists on Taobao – China’s largest e-commerce platform – proves that algorithms are performing way better than humans.
- Manual bidding campaigns brought in 100% ROI with 99.52% of budget spent.
- Algorithmic bidding generated 340% ROI with 99.51% of budget spent.
It’s clear who’s the winner here.
AI enables advanced customer segmentation and ad targeting
Algorithms are better suited for detecting patterns than a human eye, especially when sent to deal with large volumes of data. They can effectively group and cluster that data to create rich user profiles for individual customers – based on their past interactions with your brand, their demographic data and online browsing behaviors.
This means that you are no longer targeting a broad demographic of “women (aged 25-35), based in the US”. You become capable to pursue more niche audiences, exhibiting rather specific behaviors e.g. regularly engaging with hair care products in the luxury segment on social media. This insight can be further applied by an AI system when entering an RTB auction to predict when your ad should be displayed in front of the consumer (matching your profile) and when it’s worth a pass.
The best part is that AI-powered advertising is no longer cost-prohibitive for smaller companies. With new solutions entering the market, it would be interesting to observe how the face of mobile advertising will change in 2019 and onward.