The future of online advertising is big data and algorithms

The technological revolution is coming to advertising. Chatbots are replacing humans, data is threatening our privacy, and blockchain is tying it all together. In our series on technology and advertising, we take a look at how the industry is reshaping.

The challenge faced by advertisers and advertising professionals remains relevant in the face of fundamental technological change. Namely, algorithms and big data.

The combination of the two, in the form of automated, real-time buying and selling, redefines the business model and value proposition of advertising.

Advertising is now a world of software, super-fast networks and processing power, statistics, optimization, operations research, heuristics, data science and a range of related disciplines that come together to handle large volumes of rapidly changing data.

How advertisers adapt will determine their viability in the new world of online advertising. Period.

Trends combining data and advertising

A number of interconnected trends come together to create this world of data.

Over 40% of the world’s population now has access to the Internet. It is both a huge market for advertisers and a huge source of data. But the explosive smartphone adoption also attracted a large number of new Internet users – a fresh look for advertisers – and there are many more to come.

Global technology platforms, such as Google and Amazon, Facebook and LinkedIn, have created huge pools of data and have them all useful. Simply put, big data is data that is too large or complex to be effectively managed by the standard database technologies currently used by most organizations. But these platforms, among others, allow data to be analyzed and useful information to be extracted.

Historical data is also a potential goldmine in the right hands. It offers insight into industry trends and buying behaviors over time. Correlating historical data with “new data” can lead to the development of predictive models, which are also useful for advertising.

It’s not just the data we happily give to Facebook and LinkedIn that is useful, but also behavioral, demographic, geospatial and other data. metadata also. We all leave digital footprints every time we interact with the Internet.

The overall volume, speed and variety of this data is staggering. This data, together with the real-time information and patterns that can be extracted from it, forms the basis of tomorrow’s digital alchemy.

There is also a growth Garland intermediary organizations that collect, analyze, interpret and offer precisely targeted advertising services, all in near real time. At each stage, advertisers and intermediaries cut the ticket as they take their part to be involved in the overall management of the torrents of data that we generate and that are returned to us in the form of targeted advertising.

put it all together

Finally, there is the rise of programmatic advertising – the purchase and sale in real time and automated with algorithms, grouping several of these tendencies. There is now huge online marketplaces where the software buys and sells advertising space.

Lots of ads you encounter on the web are now programmatic, allowing advertisers to target who sees an ad, based on this growing array of data. This allows advertisers to pre-define criteria for their ads, showing them only to Australians at a specific time, for example.

As the Internet moves from an “open” and seemingly free network to a ubiquitous and highly monetized network, advertising is catapulted into a new paradigm. The value and growth of the online advertising market is reshaping the entire advertising industry, and the pace of change is not slowing.

The fundamental concepts of advertising remain unchanged. That is to say, to present the concepts, products and services of the advertiser who connects sellers with potential buyers.

What has changed, however, is that advertisers (and sellers) must be able to leverage the arsenal of real-time measurement and placement tools to focus their efforts with pinpoint accuracy and cost. minimal. Being able to use big data, analytics, and algorithms isn’t just “nice to have,” it’s essential.

Welcome to a new world of online advertising.