“If you think about the [advertising technology] stack there’s lots of necessary elements but it seems to me the meat in the sandwich is the intelligence layer. It’s the engine that figures out, if-this-then-this. If you think about what the most important part is that seems to me to be at the nucleus.”

-Terrence Kawaja, LUMA Partners, March 5^th, 2011

As the first user-controlled medium, the web has a unique ability to match consumer interests and intent (if-this) with relevant information (then-this). This native dynamic seeds the entire value chain of digital media, exhausting attributes and metrics that allow the medium to be optimized based on testing and targeting. Brilliant!

Looking into the future based on Kawaja’s value proposition and current trends, two things are clear:

1. All media becomes performance media.
2. Media valuation becomes directly tied to advertiser performance.

Driving this media performance will be data, automation and realtime. They are the pillars of advertising’s intelligent future and thus the cornerstone of the web’s monetization.

For a glimpse of the future look no further than Search Engine Marketing, its 2 million advertisers and $25 billion global ad spend, which is predicted by eMarketer to double in the next 5 years. For years, Search has leveraged realtime activity streams, algorithmic data mining and automated matching rules to deliver unrivaled performance. The amount of data being collected to optimize Search is staggering. And maybe most important for anything built for the future, it is incredibly dynamic. 20-25 percent of the queries made each day on Google are new. That’s intelligent!

At Yieldbot, our technology is built for an underserved media intelligence and monetization market – Publishers. Incredibly, Publishers have higher value event and contextual data than Search. Our platform leverages data (collection, storage and organization), automation (rule configuration and management) and realtime (server-side, first party attribute-value pairs) to capture these relevant moments and create media based on intent. From our perspective, this is how we see the future:

Data

Every business is becoming a data business. Advertising is no different. Advertising’s future is being fueled by a true enlightenment in data collection, organization, storage, mining and visualization. Cloud services, open source software and advanced visualizations are accelerating value discovery in areas not seen before. However, it is not all 0s and 1s. Sculpting data is a creative endeavor and as much an art as anything in technology. Ultimately it is not only the shape of the data but the ability to take the learning and make it repeatable, actionable and even more intelligent by adding additional layers of data.

That leads to our next pillar…

Automation

Most advanced marketing technology is incredibly hard to use. When I founded Offermatica’s service unit five years ago it wasn’t because we wanted to sell Services, it was because no one was successful with the technology’s self-serve model (Offermatica was acquired by Omniture in 2007). This same technology/services paradigm continues to permeate online advertising to this day. It is especially true in Display where it takes longer to get a campaign live than TV. Automation creates the ability to act on data in near realtime. As optimization cycles shrink, marketing becomes smarter and thus more relevant. However, this does not mean that people are removed from the equation. Until machines can understand emotion, one of the key components to marketing, people will still be required.

That leads to our next pillar…

Realtime

Since Aristotle’s Rhetoric timing has always been a key component of persuasion. The “right time” has long been the hardest part for marketers to capture. Over the past two years there have been tremendous advances with the ability to price and purchase media. This market is called RTB (Real-Time Bidding). However, Forrester projects that 92 percent of display will still not be RTB enabled by the end of 2011. Relevance can’t be retrofitted. The intelligence needed to do relevant matching based on realtime session activity rather than previous behavior holds the key to increasing publisher media value by an order of magnitude more than RTB. That’s why we’re working on it.

The future of ad technology is no different than the future of all technology. It will continue to get more intelligent and useful as the tools of creation improve. At Yieldbot we’re building with Puppet, MongoDB, Amazon EC2, Hadoop/Cloudera, Cascalog/Clojure, Lucene and Python. We recently sharedsomeinsight into our technology. One thing we know for sure: An intelligent and relevant future is waiting.