Dr. Jochen Schlosser
Chief Strategy Officer
1
Artificial Intelligence &
The Future of Data-Driven
Advertising
Dr. Jochen Schlosser
Chief Strategy Officer Adform
Owner of Adform’s strategy with
dedicated responsibility for Product & Technology.
• Broad Paid / Rented / Owned Media Experience
• Trained Data and Computer Scientist
with minor degree in psychology
• Happy to have survived 10+ years in Advertising
General Introduction
4
A computer program which has the ability to think, solve problems, learn, set goals, and create. It is the
science and engineering of making intelligent machines, especially intelligent computer programs. - John McCarthy, 2002
What is Artificial Intelligence?
Deep, Machine, Intelligence Learning?
Artificial Intelligence
Highly Simplified
A program that can “sense”, reason,
act, and adapt.
Machine Learning
Subarea of AI
Algorithms that enable machines to
make decisions and improve by
learning over time.
Deep Learning
Subarea of ML
Where multi-layered Neural
Networks learn based on
high volumes of data
5
Brief Timeline
Artificial Intelligence
Since 2000s - GAME CHANGER
Cost of computations and storage drop
Machine Learning
1805-1957
Algorithm groundwork and first self-
learning algorithm
Deep Learning
1965
”Birth”* of deep learning
(Ukraine)
6
* Principle of automatic models generation, inconclusive decisions, and selection by external criteria by Alexey Ivakhnenko
Keeping the Perspective
7
That is what we mostly doAccomplishment of one or a very few goals NARROW AI
8
SUPERVISED Learning
9
UNSUPERVISED Learning
Some examples on how that
works today
What exactly is
this about?
What exactly is
this about?
It is about GO and MOVE 37
AI vs HI - Humans still are still able to win!!!
A Major Challenge
Example on TRUST building
HIV prediction for medication combinatorics A,B,C or D,A,Z
The TRANSPARENCY Problem
Even if the outcome is correct, the path to it might not necessarily be the one you expected. The more
complex the algorithm, the more difficult to explain in human terms, the less we initially do trust them.
The TRAINING Problem
There is no such thing as free lunch and data plus “the lab” to be trained in needs to be funded. If the lab
can’t be simulated (as in Gaming), the question of money is - to no surprise - connected to real budgets.
The AI (r)evolution will take time
More than 1 million predictions for HIV drug resistance since ...
Trust me - I am a scientist (algorithm)
Prof. Dr. Dr. Thomas Lengauer
Dr. degree in Mathematics (FU Berlin)
Ph.D. in Computer Science (Stanford)
To the real world and some
opportunities
What Is AI?
23
Insurance ExampleGET BETTER
What Is AI?
24
Irrelevant Treatments / Leakage DetectionINNOVATION
AI in Advertising
The Internet: Trillions of signals
But how is this sensor data turned into something useful?
Adform’s Artificial Intelligence
Trading Algorithms Forecasting Dynamic Ads Product Retargeting
Audience Extension Cross-Device Fraud Detection Smart Throttling
WORKING DRAFT
1.03
2.31
10.32
18.43
21.48
43.98
36.98
34.65
56.67
60.16
94.60
94.98
97.83
0.10 EUR
0.23 EUR
1.03 EUR
1.84 EUR
2.15 EUR
4.40 EUR
3.70 EUR
3.47 EUR
5.67 EUR
6.02 EUR
9.46 EUR
9.50 EUR
9.78 EUR
1.03
1.28
8.01
8.11
3.05
22.50
- 7.00
- 2.33
22.02
3.49
34.44
0.38
2.85
Consumer journey1 Bid (CPM)Conv. likelihood, %
Impression (1 sec, 53%)
Impression (4 sec, 35%)
Video view (completed)
Campaign click
Time on site (90 sec)
Search click (product search)
Time on site (3 sec)
Impression (1 sec, 15%)
Visited comparison site
Social click
Sign up for offers
Video view (completed)
In-banner engagement
Example of mined consumer interaction patterns Exemplary bid change based on random consumer pattern
Advert
iser’s w
ebsite
Publis
her’s w
ebsite
Sale
Non-value adding signal Value adding signal Customer Journey
Billions of signals are mined for patterns Each interaction1 influences maximum bid price
28
Adform example of AI
Product
Information
Price
Comparison
App
DownloadOffer
Signup
Product
Search
Electronic
News
1) Hundreds of parameters or combinations of these are used to determine the conversion likelihood, e.g., Domain, URL, Time of Day, Date, Weekday, Category, Browser, Format, Banner Interactions, Viewability, Time on Site, Channel, Campaign, Media Type, …
Product
Details
Delta
Category
How Adform Trading Algorithms use AI
WORKING DRAFT
1.03
2.31
10.32
18.43
21.48
43.98
36.98
34.65
56.67
60.16
94.60
94.98
97.83
0.10 EUR
0.23 EUR
1.03 EUR
1.84 EUR
2.15 EUR
4.40 EUR
3.70 EUR
3.47 EUR
5.67 EUR
6.02 EUR
9.46 EUR
9.50 EUR
9.78 EUR
1.03
1.28
8.01
8.11
3.05
22.50
- 7.00
- 2.33
22.02
3.49
34.44
0.38
2.85
Consumer journey1 Bid (CPM)Conv. likelihood, %
Impression (1 sec, 53%)
Impression (4 sec, 35%)
Video view (completed)
Campaign click
Time on site (90 sec)
Search click (product search)
Time on site (3 sec)
Impression (1 sec, 15%)
Visited comparison site
Social click
Sign up for offers
Video view (completed)
In-banner engagement
Example of mined consumer interaction patterns Exemplary bid change based on random consumer pattern
Advert
iser’s w
ebsite
Publis
her’s w
ebsite
Sale
Non-value adding signal Value adding signal Customer Journey
Billions of signals are mined for patterns Each interaction1 influences maximum bid price
29
Adform example of AI
Product
Information
Price
Comparison
App
DownloadOffer
Signup
Product
Search
Electronic
News
1) Hundreds of parameters or combinations of these are used to determine the conversion likelihood, e.g., Domain, URL, Time of Day, Date, Weekday, Category, Browser, Format, Banner Interactions, Viewability, Time on Site, Channel, Campaign, Media Type, …
Product
Details
Delta
Category
How Adform Trading Algorithms use AI
WHAT IF MORE
MOREDATA IS FED
INTO THE SYSTEM
WORKING DRAFT
Consumer journey1 Bid (CPM)Conv. likelihood, %
Impression (1 sec, 53%)
Impression (4 sec, 35%)
Video view (completed)
Campaign click
Time on site (90 sec)
Search click (product search)
Time on site (3 sec)
Impression (1 sec, 15%)
Visited comparison site
Social click
Sign up for offers
Video view (completed)
In-banner engagement
Example of mined consumer interaction patterns Exemplary bid change based on random consumer pattern
Advert
iser’s w
ebsite
Publis
her’s w
ebsite
Net
Sale
Non-value adding signal Value adding signal Customer Journey
Billions of signals are mined for patterns Each interaction1 influences maximum bid price
30
Adform example of AI
Product
Information
Price
Comparison
Offer
Signup
Social
Clicks
Product
Search
1) Hundreds of parameters or combinations of these are used to determine the conversion likelihood, e.g., Domain, URL, Time of Day, Date, Weekday, Category, Browser, Format, Banner Interactions, Viewability, Time on Site, Channel, Campaign, Media Type, …
Product
Details
Delta
Category
How Adform Trading Algorithms use AI
1.03
2.31
10.32
18.43
21.48
33.98
26.98
24.65
36.67
60.16
92.60
92.98
97.83
0.10 EUR
0.23 EUR
1.03 EUR
1.84 EUR
2.15 EUR
3.40 EUR
2.70 EUR
2.47 EUR
3.67 EUR
5.02 EUR
8.46 EUR
8.50 EUR
8.78 EUR
1.03
1.28
8.01
8.11
3.05
12.50
- 7.00
- 2.33
12.02
23.49
34.44
0.38
2.85
What’s next?
The Future
The New Marketing Human
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Natural Language Processing
Voice Synthesis
Classification & Offer Optimization
Computer Vision
Emotional Intelligence
Adform POC with Amazon Alexa API
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Access to user microphone
HTTPS Security and
Consent must be in place
for cam
Cloud speech API
enables Alexa
functionality in Ads
Alexa environment test
interface pulled in through
iFrame with added events
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The Intelligent Personal Assistant will be compatible with other digital voice assistants, thereby
providing a link to other rapidly growing ecosystems.
NEWS from the past …
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Good morning, you are driving by a local VF store, with free
parking in 5 minutes, would you like to pickup your new iPhone?
Done ... While being there, you can also upgrade your contract and pickup the new
GC which you showed interest in some weeks ago.
Exactly this one! There is a 4 week free trial which gives you
access to it during your vacation in 2 weeks.
Machine-to-Machine Marketing
Which Leaves Us…
The Value ofHuman Intelligence
Let’s CREATE something NEW
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