WPP NextM event was held in Stockholm in May, and the Alma Programmatic team was there on-site learning about industry trends and meeting Nordic colleagues.
Three themes that emerged from more than 70 speakers were trust, humanity and creativity. Yet in the middle of the event, I saw an actual bid request displayed on the big screen. What was going on? Let’s take a closer look.
Algorithmic advertising diminishes effectiveness
83% of global ad spend is flowing through algorithms. Alex Steer, CDO of WPP Data & Technology Solutions, described how algorithms have changed over the past decades. Twenty years ago, advertisers set the rules for algorithms and had the possibility to gain exceptional returns.
Now, modern platform algorithms set the rules, and the algorithm itself decides how the advertiser participates in the auction and under which conditions. This modern algorithmic decision-making delivers predictable returns for advertisers, effectively equalising advertisers and leading to increasingly standardised and predictable outcomes. As advertiser data also flows to large platforms, platforms have built an unprecedented view of consumer behaviour, says Alex Steer.
As algorithms have become more effective, at the same time overall advertising effectiveness has decreased. Platform algorithms are productive for themselves, and there is not that much room for real growth for advertisers.
Adding false and misleading ads into this modern platform-driven ecosystem, trust, humanity and creativity will be the winning themes to focus on.
Advertising industry needs to look beyond the algorithms
The event underlined that we need to have a courage to analyse and make decisions outside of the platforms. As AI is speeding up the race, human insights and creativity are more needed than ever to create outcomes that deviate advertisers from the average.
At the same time, the context in which advertisers are seen has become one of the key elements of advertising effectiveness. Context and media environment reliability are directly linked to brand trust.
With the power of AI, algorithms are also starting to optimise creatives by learning the elements that feed the algorithms and multiplying those across advertisers. Without human creativity and rethinking, this development will weaken advertisers’ recognisability and brand awareness, which are among the most effective drivers of long-term ROAS. (Alex Steer, CDO of WPP Data & Technology Solutions)
By understanding the power of algorithms, people in the advertising industry can make stronger and more differentiated decisions as humans. Continuous human decision-making will ultimately drive creativity and growth.
Contact: programmatic@almamedia.fi
