• by Joe Mandese  @mp_joemandese, October 25, 2011

The digital ad industry has invested billions of dollars to develop systems and technology to figure out the best display advertising impression to serve to the right user on behalf of an advertiser’s brand, but until now it has spent relatively little to figure out precisely what creative -- i.e., advertising message -- to put in it. That’s about to change as one of Madison Avenue’s top advertising technology platforms, agency trading desk Adnetik, integrates a new artificial intelligence-like system that will automatically determine the most effective creative based on the user’s past behavior.

“We use a lot of AI already, but most of it is used to determine the best media impression. What we’re doing now is applying it at the creative level, because creative is the next big ad tech frontier,” Adnetik CEO Edward Montes explains about the company’s decision to partner with Cognitive Match to integrate a new dynamic creative targeting platform into Adnetik’s systems.

Montes says similar technology has been developed in the past, but was quickly acquired and integrated into “the big monsters like Google and Yahoo,” and that Cognitive Match was the best independent player out there to partner with.

“Our system already looks for the best media impression -- that’s the bread and butter of what we do. Now we’re going to do the same thing for creative,” Montes explains -- not that the same reasons why technology is being used to automate the online display advertising marketplace is what is leading it to apply it to creative: “There are just too many options taking place in real-time -- millions, if not billions of decisions that need to be made. That’s where machines add value, because it is too complicated for human beings to process all that information.”

Montes said the technology will not replace people, but will enable advertisers and agencies to do a better job of planning and executing their strategies by leveraging user data dynamically, in real-time, based on those plans.

“A lot of technology has come into this space, but not a lot of people have come into it. As a result, very few people are attacking the planning process. They attack the buying process,” he said, adding that Cognitive Match is simply a more powerful tool for planners to use.

Alex Kelleher, CEO and Founder of Cognitive Match, agrees, noting that advertisers and agencies have figured out how to “apply science and art to buying the [media] impression,” but so far have applied little of it toward understanding the right ad message to put into it. He says Cognitive Match’s technology is based on “machine learning,” and that he’s been developing it for 15 years, initially by analyzing user behavior to determine the best advertising environments, and pages within those environments to serve an ad on, and now to determine which ad to serve.

“The trick is to make meaningful decisions in real-time,” he says, offering an example of a travel category advertiser trying to target users based on variables like location, weather conditions and time and date -- all of which can greatly influence a user’s predisposition to a specific advertising message.

“If it’s hot weather and they’re on the East Coast and they’re at work during a weekday we know that’s going to generate a different behavior than if they are someone from the West Coast and it’s cold and on the weekend,” he explains.