IBM Watson adds creative optimization to OTT, video

Since IBM Watson introduced its Advertising Accelerator in early 2020, brands like Toyota and Best Western have used the AI platform to deliver ads with optimized creative elements for display advertising. Now, Watson has expanded its AI-powered creative optimization capabilities to campaigns on OTT services and for online video.

The new video capabilities use data signals to select the best combination of video ad elements for an audience segment on OTT. By incorporating conversions and other signals into the campaign’s modeling, advertisers can also discover new segments to target.

“We launched our Accelerator in order to reinvent DCO (dynamic creative optimization), now for video and OTT, so that the time to value is shrunken significantly,” said David Olesnevich, head of product at IBM Watson Advertising. “AI is backing and powering the campaign with constant learning.”

To launch an optimized video campaign, the advertiser supplies a number of options for each section of a video ad, including assets for introduction, the body of the ad, music tracks and end cards. These are assembled at scale to deliver the right combinations to each of the audience segments that is most receptive to them. As a result, the campaign learns more and drives better results over time.

For display advertising, Accelerator campaigns have achieved a 60% reduction in cost per lead, according to Olesnevich. “We expect it to have the same results if not better [for OTT and video],” he said. “There are more opportunities to help brands, when you think about the assets that they have for video and how we can make use of those assets. We can take what they originally launched with and turn that into a bunch of new variants and drive performances.”

Brands that are already producing video assets across many digital and social channels can plug in versions of these assets and see what works best, as a campaign using AI learns more and evolves.

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The expansion of IBM Watson Accelerator into OTT and other digital video channels comes as advertisers are spending more of their budgets on digital video channels. CTV ad spending on CTVs — devices like smart TVs that show OTT content — saw a 22% increase year-over-year in 2020, according to the IAB’s “Video Ad Spend 2020 and Outlook for 2021” report released this week. Nearly three quarters of CTV buyers report shifting budgets from broadcast and cable to CTV as well.

Ad buyers are also increasingly interested in OTT as many TV watchers are ending or reducing their linear TV subscriptions. 

How DSPs can leverage creative optimization

An AI-powered campaign using creative optimization can determine the most effective combination of ad elements, but what about media placements based on similar audience insights? If an advertiser discovers that a particular soundtrack or intro gains traction with a segment, they would want to place that winning combination in front of more consumers within the segment.

For this reason, a DSP is an important part of an optimized video campaign, which is why IBM Watson has also entered into a close partnership with DSP Xandr to increase adoption of its optimization tech.

“The valuation of a media impression can comprise tens or even hundreds of variables when using advanced customization features,” said Doug Hurd, head of corporate strategy and Business Development at Xandr. “These variables can include things such as the device a consumer is watching content on, their geographic location and time of day, or a customer lifetime value score the marketer ascribes to a unique audience segment, each providing signals that inform the final bid price.”

And this is all before the complexity of rapidly shifting creative combinations is added to the campaign.

These technologies used together, will boost performance across the funnel from awareness, ad recall, engagement and, even, direct response and action, Hurd said.