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AI is Changing A/B Testing in Programmatic Advertising
Ad Optimization

How AI is Changing A/B Testing in Programmatic Advertising?

Abhilasha Sandilya
May 22, 2024
May 22, 2024

Changing, reshaping, or replacing, choose any term you like, but you can’t deny the way AI has disrupted the digital advertising industry. From content creation to monetization, AI has impacted every aspect of it, and A/B testing is no exception. 

Publishers are constantly seeking ways to optimize their ad inventory and maximize revenue. A/B testing has long been a cornerstone of this optimization process, allowing publishers to compare different ad creatives, placements, and targeting strategies to identify the most effective combinations.

However, the traditional A/B testing approach can be time-consuming and resource-intensive. Manually creating and analyzing variations can be a tedious task, and the sheer volume of data generated by programmatic setup can make it difficult to draw meaningful insights.

Here's where AI steps in as a game-changer by automating many of these tasks, freeing up your team's time and resources to focus on higher-level strategies. Today, we will be talking about how AI is changing the A/B testing landscape for publishers. 

But, Why Are We Talking About A/B Testing

A/B testing plays a crucial role in yield optimization strategies for publishers, particularly in the programmatic advertising space. This method allows publishers to systematically compare two versions of a variable to determine which performs better, thus making data-driven decisions to maximize revenue. Web publishers have numerous A/B testing opportunities, each targeting different elements of their programmatic stack.

For instance, they can test timeout rates to find the optimal auction time and SSP’s incremental value to identify the most profitable supply-side platforms. Layout changes and ad sizes can be tested to improve user engagement and ad effectiveness. Viewability’s impact is also crucial, as higher viewability often leads to better ad performance.

Other elements that can be A/B tested include floor prices to find the best price point, specific prebid configurations to maximize bids, and different ID solutions for better ad targeting. Additionally, testing different ad refresh rates can help determine the optimal frequency for refreshing ads to maximize revenue.

Through A/B testing, publishers can continuously refine their strategies, ensuring they are using the most effective combinations to enhance performance and revenue.

Manual A/B Testing and Why Publishers Need AI

The manual A/B testing involves creating and analyzing different variations of ad creatives, placements, and targeting strategies, which can be extremely time-consuming and resource-intensive. Each test requires careful setup, meticulous tracking, and thorough analysis to ensure accurate results. This is not only laborious but also prone to human error, which can skew the outcomes and lead to suboptimal decisions.

When publishers manage multiple websites, the complexity of manual A/B testing compounds. Coordinating and executing tests across various sites means dealing with different audiences, content types, and ad formats. Moreover, the dynamic nature of digital advertising, with constant changes in user behavior, ad performance, and market trends, requires rapid adaptation and decision-making, which is hard to achieve manually.

AI addresses these challenges by automating the entire A/B testing process. Advanced algorithms can quickly generate, deploy, and analyze numerous test variations, providing actionable insights in real-time. This not only accelerates the testing cycle but also ensures more accurate and reliable results. AI-driven testing can continuously learn and adapt to new data, improving the efficiency and effectiveness of optimization efforts.

AI in Programmatic Advertising 

AI in A/B testing refers to the use of generative or predictive artificial intelligence in the testing process. To make the programmatic setup more powerful, AdTech partners and publishers are now working on models, solutions, and tools incorporated with AI-powered A/B testing. 

Automated Multivariate Testing:

Traditional A/B testing typically involves comparing two versions of a variable to see which performs better. However, AI enables multivariate and A/B/n testing, where multiple variations of several elements can be tested simultaneously. This approach allows publishers to identify the best combination of ad creatives, placements, and targeting strategies more quickly and accurately. By analyzing multiple variables at once, AI reduces the time and complexity involved in manual testing and provides deeper insights into the factors driving ad performance.

Predictive AI in A/B Testing:

Predictive AI-powered A/B testing leverages machine learning to forecast the outcomes of different test scenarios before they are executed. This capability allows publishers to prioritize the most promising tests, saving time and resources. For example, AI can predict the impact of different timeout settings on ad auctions, helping to find the optimal duration that maximizes revenue without sacrificing user experience. Similarly, predictive models can evaluate various floor pricing strategies to determine the best price points that balance fill rates and revenue per impression.

Real-time Data and Dynamic Adjustments:

AI-driven platforms offer real-time data analysis and dynamic adjustments. This means that as soon as data from an A/B test starts coming in, AI can begin to adjust parameters like floor prices, ad refresh rates, and timeouts. For instance, if a particular floor price is underperforming, AI can dynamically adjust it to optimize revenue. Similarly, ad refresh rates can be modified in real-time based on user engagement metrics, ensuring that ads are shown at the most effective intervals.

Bonus tip -

Platforms, such as Mile, provide sophisticated dashboards that offer comprehensive insights into your A/B/n test results. These dashboards present data in a granular, accessible, and actionable format, allowing publishers to quickly understand the performance of different variations. 

End Notes

Various cons to A/B testing can be addressed using AI technology. A/B testing for optimizing demands a significant amount of human labor for publishers, and the landscape frequently changes by the time the changes are executed. 

AI excels at scaling the process of continual improvement. Great publishing and storytelling have always been about both art and science & nowhere do these two approaches clash more seamlessly than in the digital realm. 

AI and machine learning are relatively new contributors to the business, and they may assist publishers in implementing cutting-edge technology to pinpoint what promotes interaction.

Without question, artificial intelligence and machine learning will transform digital marketing in the upcoming years, automating testing processes, lowering test times, and learning swiftly to deliver data-driven solutions faster than ever before.

All you need is the right ad partner to help you! If you don't have one or are looking for one right now, get in touch with us.

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