Larraine Criss
Oct 24, 2017

What APAC’s rising AI capability means for advertisers

Here are two areas where AI is poised to have the greatest impact on the ad business.

What APAC’s rising AI capability means for advertisers

The APAC market is flourishing, not just in terms of digital advertising—with spend due to hit US$156 billion this year—but also technologically. More specifically, regional buoyancy has captured the interest of global players keen to leverage artificial intelligence (AI). For instance, China has already matched the overall US output of AI research, and by 2020 its AI industry is set to be worth US$9.1 billion, expanding at an annual rate of 50 percent.

So, the outlook seems bright for an AI-powered future, but the question is: what does this rising machine capability and prosperity mean for advertisers?

To answer it, let’s take a look at the two areas where AI is poised to have the greatest impact.

Ad fraud: closing down click farms

APAC is a highly connected region; its internet users alone make up half of the world’s entire online population. As a result, it produces an abundance of rich consumer data that is attracting both advertisers and fraudsters. China alone experiences fraud rates of up to 40 percent on a regular basis. Moreover, with the relatively nascent ad industry heavily reliant on click-based metrics, click fraud is becoming a particular issue: especially on mobile. For example, Singapore, Japan, and Malaysia, are among the top five most targeted markets when it comes to mobile ad fraud and, earlier this year, a vast click farm—where low-paid workers falsify content clicks—was uncovered in Thailand, with over 500 devices in use.

Fortunately, AI progression is making it easier to identify and isolate invalid traffic. At the moment, most innovations centre on machine learning: a subset of AI that can increase its own understanding over time, without being programmed. For instance, sophisticated ad platforms are harnessing the ability of machine learning algorithms to continuously monitor online traffic and spot suspicious patterns, such as users who frequently click on content but never make a purchase. Armed with this information, intelligent tools can take steps to keep traffic clean, like removing fake users, and make smarter decisions about ad placement. In China, for example, the country’s core internet provider, Tencent, has joined forces with Miaozhen to create a smart data auditing model that will instantly assess traffic quality.

Although it’s true these innovations are still in the early development stages, there are clear signs that with greater investment and human refinement, machine learning could eventually bring an end to the ad fraud problem—not just in APAC, but everywhere.

Large-scale tailoring has arrived

The concept of creative personalisation isn’t new to the APAC market; long before intelligent machines began to be viewed as an anti-fraud mechanism, automation was being harnessed to build tailored ad creative. But recent advances in machine learning have powered the construction of tools that are enabling APAC advertisers to enhance individual engagement on a huge scale, like dynamic creative optimisation (DCO).

Fundamentally, DCO is a combination of machine learning and data analysis that determines which version of an ad creative is most likely to interest specific consumers and how it should be delivered to maximise the chances of conversion. By collating and mining consumer data from multiple sources, it can pinpoint the formats, devices, and channels individuals prefer and select the best ad variants accordingly – and in real-time. Furthermore, DCO has the capacity to collect data about a user’s individual activity over time and predict what they are likely to want next.

Across APAC, DCO implementation has already attained a mature level; with advertisers not only using it to improve messaging relevance and sales, but also as a vehicle for telling linked up cross-channel stories that deepen long-term consumer relationships. And in the future, it’s possible that DCO could have an even wider impact; with better ad quality serving to reduce ad blocking and making genuine ads harder for fraudsters to mimic.

As a technique that can be used at any point in the consumer journey, and for any channel or device, DCO is a versatile tool that will help brands in the APAC region deliver richer, more relevant creative that enhances customer experiences at scale.

With the advertising market continuing to grow across APAC—now the world’s second largest investor in digital advertising—and its machine learning capability increasing at great speed, the time is right for the region to boost its global reach. By embracing emerging technological advances and using them to enhance the relevancy, impact, and efficacy of their campaigns, APAC is setting a machine-powered example that leaves the international ad community trailing in its wake.

Larraine Criss is chief product officer with MainAd.


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