Insights from Advertising Week 2023: AdTech and AI lead the future

It’s late October, which means my team and I just got back from our annual trip to New York for Advertising Week.

Bringing together the entire advertising world, from AdTech companies, ad platforms, advertisers themselves, creative agencies, buy-side, sell-side, and everything in-between, this event never fails to deliver on interesting perspectives and insights that help guide us. Plus, the special guests are always fun; last year we had Elmo, and this year, Paris Hilton.

Twilio Segment was again proud to sponsor the Future of Programmatic content track, which produced some great insights from the industry’s top players. We learned that the advertising world is facing three key challenges: 

• Delivering the privacy demanded by modern customers, to build loyalty

• Transitioning from legacy customer data systems to Customer Data Platforms (CDP), in order to drive better Return on Ad Spend (ROAS), 

• Managing the exciting change to our industry brought by artificial intelligence

In an industry centered around creatives there’s been understandable concern that AI could eventually replace creativity, but the conversation at Advertising Week put a lot of that to rest. AI is actually making us more resource efficient, allowing us to spend less time on repetitive tasks and instead focus on creative agility. It’s helping businesses reduce costs as teams collaborate with data that connects across platforms. Not to mention how valuable the rapid analysis of data is – again, AI can free us up to focus on strategy. It was exciting to see how, as a unified source of consented and clean first-party data, and with recent launches of generative and predictive AI models, Twilio Segment brings a huge amount to the table for advertisers.

Another important topic was the discussion of how AI will accelerate the customer journey. In the future, a consumer’s product research and buying decision may happen entirely in conversation with an AI assistant. In that world, the value of powering that AI with a real-time, descriptive profile of that consumer’s traits couldn’t be more clear.

To unpack all of this and more, it was my pleasure to host a panel discussion with two key Twilio Segment partners: Chris Plambeck, VP, Marketing Science from Snap, and Ben Sylvan, GM, Data Partnerships at The Trade Desk. In our session “AI and First-Party Data: The Foundations for Successful Advertisers” we discussed the role of artificial intelligence in programmatic ad delivery, advertiser growth strategies, how platforms are managing in the cookieless world, and how first-party data is vital to any marketing strategy.

If you have an event pass you can watch the full session here, or just read on for a recap of the highlights.

Privacy and First-Party Data

It feels like every AdTech discussion for the past few years has included some mention of the privacy-first, cookieless future demanded by today’s consumers. Now we’re adding the need for better ad personalization to extend campaign impact on the open web, once third-party cookies are gone for good.

The combination of first-party data and novel AdTech solutions, like Conversions APIs and hashed user identifiers, have emerged as the industry’s solution to this problem. Ben Sylvan from The Trade Desk reminded everyone that things aren’t as simple as: first-party data equals “good,” third-party data equals “bad.” Bad actors could use first-party data without consent, and third-party data from, for example, a retailer’s loyalty program can be a perfectly consented, privacy-safe component of the data driving marketing decisions. Businesses need to find safe and compliant data, whether it’s first or third-party.

Sylvan went on to talk about The Trade Desk’s efforts to ensure that safety, by bringing the companies that make up the programmatic ad buying universe together around Unified ID 2.0, or UID2. This standard creates a privacy-first user identifier that is hashed and encrypted but maintains addressability, so advertisers can be confident they’re reaching the right audiences.

“The adoption is going really well. You’ve seen some of the largest CTV [Connected TV] platforms in the world, like Disney, Paramount, Hulu, and NBC Universal who have adopted it in recent years. And it’s also growing on the advertiser side, where our focus has been on democratizing the onboarding of first-party data by partnering with CDPs like Twilio Segment. Allowing advertisers to turn their emails or phone numbers into UID2s and then onboard them into our platform in a safe and secure way, so that you can activate against your first-party data at scale.”

Transitioning from Legacy Systems

Not only does delivering first-party data from a CDP like Segment to platforms like The Trade Desk have benefits for audience building on the “front end” of an ad campaign, but on the “back end” it improves the visibility of that campaign as well. Marketers gain new ways to observe and optimize it, through the use of Conversions APIs, as Chris Plambeck from Snap told the crowd. 

“One of our best practices is to send data in a redundant fashion. So if you have a pixel installed, send it using a Conversion API as well. A Conversion API is more resilient, but it’s also better in terms of data quality. When advertisers use the Conversion API as well as the Snap pixel they see 22% more attributed conversions – so, better reporting – and 25% higher purchase value – it’s giving better insight into the types of consumers who are purchasing.”

The panel agreed that efficiency is crucial at the moment, and every last bit of ad spend is being scrutinized closely. Being able to bring these new capabilities to bear across multiple ad platforms and channels at once is where the rubber meets the road for customer acquisition in 2024. To achieve real efficiency, businesses will need a way to execute across all their advertising touchpoints, a capability which DMPs and CRM systems could never offer. It’s no good calling a campaign “omnichannel” if what that really means is “a ton of different channels all managed separately.”

Artificial Intelligence as Enabler

The conversation then turned to AI. This year, Twilo Segment’s annual Growth Report found that 82% of businesses are using some form of AI automation in their 2023 marketing efforts. It’s clear, however, that there’s a big difference between using AI in a one-off part of the tech stack versus having a cohesive strategy for empowering teams across the business. We discussed a number of ways AI will impact AdTech and MarTech, with a general consensus that the power of AI will be most useful for automation and iteration. 

“Even within social, or within digital platforms, there are large differences in audiences and placements,” said Chris Plambeck, “So the same creative you may put on your Instagram campaign probably works decently well on Snap, but you could have better creative for Snap because our audience is different, our placements are different, people use our product in different ways. In the past that was super expensive, but now AI can bring down that constraint on the cost side, and give people ads that they like to see.”

Beyond the technology advancements, customer behavior will also change. AI-driven chat interactions have the potential to dramatically alter search behavior and accelerate the customer journey. A world where a consumer’s product research and buying decision is compressed into a continuous conversation with an AI assistant has major implications for what we think of as an “ad unit,” and for the importance of powering that AI with a real-time, descriptive profile of that consumer’s traits.

“So much of advertising is emotional,” said Ben Sylvan. “Trying to pull on those heartstrings to make decisions, and AI can’t do that. You need people who understand the consumers, what motivates them, and how you can speak to them. It’s going to be really important for up front planning to continue to be done by humans. To me AI is what happens around in-flight optimization based on those real-time signals.”

We wrapped up on a note of excitement about what AI will help us do as marketers, but also with the overall agreement that business shouldn’t jump headfirst into AI “just because it’s cool.” We all need the enabling technology of a CDP like Segment to provide a centralized source of data from which to train those AI models, and we need a strategy that foregrounds our customers, providing them value and great experiences.

Get started with Twilio Segment

Advertising Week was amazing once again. A huge thank you goes out to both of our partner speakers, and we’re already looking forward to next year. 

If you want to learn more about Twilio Segment’s AdTech solutions, we will also be appearing at AdWeek Nextech in November. And of course, you can always go deep with a demo from one of our experts, or join our AdTech Product Tour, to get a walkthrough of the product and ask questions live.