AI Powered ADS A STEP BY STEP GUIDE TO EXTREME PERSONALIZATION Mark Torrance CHIEF EVANGELIST, SIZMEK

Why? 8x Better ROI Superhuman performance: AI powered ads can outperform manually targeted ads by 8x or more in tests our clients have done.

Why ELSE? Labor savings through automation: Once a campaign is set up, it runs and improves automatically

Objective Measurement Feedback Loop Multi-Objective THE STEPS Objective Measurement Feedback Loop Multi-Objective Audience Context / Moment Creative Machine Learning

Objective + MEASUREMENT The first 2 steps go together, because it’s useless to define an objective if you can’t measure it. Many marketers lose sight of this, and focus on things they are able to measure easily, even if those do not correspond to their actual objective. For example if you really want to sell more products, then easy-to-measure digital metrics like Clicks, Viewability, and Video Views may or may not be useful proxies for that actual thing you want to measure. Advertising divides into “Direct Response” where measurement is direct + good – online purchases – and “Brand” advertising where the measurement is hard so advertisers use proxy metrics and later validate with surveys or general in-store sales measurement without “attribution”. AI can be used to improve performance against any of these metrics, even if they are not really correlated with important business outcomes. But if you aim at the wrong thing, you will get a lot of that wrong thing, but your business won’t be happy.

New Model feedback Ad Instance Reaction Machine Learning This first feedback loop is fully automated; new models are built frequently, such as nightly or even more often, in response to huge data about the reaction of many different users to the ads shown to them online. The outer feedback loop gives a chance for data scientists or marketers to improve the performance of the overall system, by inventing new features or new ways of constructing the machine learning models, and placing those new models “into the mix” so they can be evaluated against the incumbent models.

Multi-Objective Optimization CPA, Clicks, Viewability, Pacing/delivery, ROI, Max gross sales, video completion, low fraud/bot rates

AUDIENCE Understand as much as you can about your audience; using data from third party companies, direct observations of their behavior and their interactions with your brand and website, and things they have told you about their demographics, interests, or appetite for particular products and services. This requires true “big data”; we have about 50k of data on each of 13 billion individual device profiles worldwide.

CONTEXT / MOMENT Time of day Day of week Website or app Category Contextual content Brand safety of the context Device Ad size Predicted viewability Clutter Referrer Session depth

Creative Offer Message Products Price Colors Font Size Amount of text Gender of model Indoors/outdoors Value? Quality? Fear? Aspirational?

Machine learning CONCERNS Algorithm Feature Engineering Data Sufficiency Model Complexity Speed of Feedback Automatic Model Iteration Explore vs Exploit Automatic Model AB Testing

WHY NOT? Hints + Controls Insights ?? Customers may see AI ad campaigns as a black box, which they can’t understand or control They are very used to doing it themselves manually, and may worry this will put them out of a job Or they may feel ashamed about the performance they are delivering with yesterday’s tech to their client or boss, and be unwilling to explain why they were so inefficient for so long Solutions: Insights help dispel the black box, putting “human in the loop” through hints + controls can help defuse the fear of being displaced by automation. We’re still working on how to solve the problem of “but this is too much improvement…”

insights

insights

Hints

Machine learning VISUALIZATION - Models

Machine learning visualization - RESULTS

Machine learning visualization - RESULTS

Future: PSychographic influence recommendations Your customers divide into 6 personas. You are successfully reaching #1 and #2, but to reach the others you should create the following ads: #3: Action Sports #4: Time-sensitive call to action (sale or other time pressure) #5: Aspirational imagery #6: Quantitative features + benefits

mark@rocketfuel.com www.linkedin.com/in/marktorrance THANK YOU mark@rocketfuel.com www.linkedin.com/in/marktorrance