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Jun 12, 2023

The Trade Desk on Kokai platform, AI in ad tech and retail media

The Trade Desk touted retail media connections in its AI advertising products.

The Trade Desk touted retail media connections in its AI advertising products.

The Trade Desk is revealing an AI makeover to its platform, riding a wave of interest in the emerging technology throughout the ad tech industry. The Trade Desk announced yesterday Kokai, a platform for managing AI-based ad campaigns.

Several partners were announced for the rollout, including retailers Albertsons and Walgreens, which have retail media networks that contribute to the data used to enhance targeting and measurement. The Trade Desk's announcement was more of an evolution of the machine learning tools that already were in place in its demand-side platform, which is a gateway for advertisers to buy ads on the open web.

Kokai is a reference to a Japenese word for "open waters," The Trade Desk CEO Jeff Green said in a presentation to marketers in New York yesterday.

"I don't want it at all to be suggested that we’re in AI because it is trendy," Green said.

The Trade Desk hasn't always "implemented AI perfectly," Green said. Kokai was a chance to upgrade the sytems. The new AI infrastructure distributes the technology to more corners of The Trade Desk, refining the models it uses to perform tasks such as analyzing the quality of ad impressions, managing bids, targeting ads and measuring sales.

Green also touched on developing APIs—application programming interfaces—that could help incorporate generative AI into programmatic ad creation.

One of the most encouraging updates from The Trade Desk was not around AI, but Unified ID 2.0, according to Megan Pagliuca, chief activation officer at Omnicom Media Group. The Trade Desk has incorporated machine learning for years into its algorithms for custom bidding, Pagliuca said. But Unified ID 2.0 is The Trade Desk's answer for advertising after cookies are fully deprecated on web browsers, including on Google Chrome next year.

On that front, Green announced that the ad ID was making progress on availability in Europe, which has tougher regulations about how consumer data can be applied in ad tech. The Trade Desk also gave a forecast for adoption of the ad ID. By this time next year, more than 50% of connected TV inventory running through The Trade Desk will be compatible with Unified ID 2.0, Green said in his talk. "We would like more visibility into those numbers, but we’re happy to see that," Pagliuca said.

The ID is widely considered to be among the tools that will maintain ad targeting on the internet once cookies are no longer in use. Two years ago, OMG was the first major agency to endorse The Trade Desk's ad ID standards

The post-cookie identity and retail media partnerships do fit into AI strategy. AI makes it easier for buyers, going through The Trade Desk, Pagliuca said. The machines will handle more of the cumbersome tasks, such as finding the right audiences to target using retail data, Pagliuca said. "It works much better if you let the algorithm decide which points of data [to use]," Pagliuca said.

The Trade Desk, like so many ad tech players, has used machine learning—which is often considered a synonym for AI—in its ad products for years. In 2018, The Trade Desk released the first version of Koa AI, which is a tool that helps ad buyers sort through billions of ad impressions online every second and decide which ones to buy and how much to bid. The Trade Desk said that Kokai will infuse AI capabilities across more parts of its ad products.

Advertisers have seen an uptick of AI tools in ad tech for years, and there is renewed interest in the technology since OpenAI's ChatGPT brought generative AI to mainstream consumers earlier this year. Since then, tech platforms have been scrambling to launch new products that tout the benefits of AI.

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The Trade Desk is competing with Amazon, Google, Meta and others to offer automated ad products that take over some of the tasks related to buying programmatic ads. Last month, Google made AI a core part of Google Marketing Live, its annual advertising conference.

"Forms of AI have been in place inside of DSPs for a while," said Joanna O’Connell, an independent research analyst. "AI has infiltrated advertising."

"Platforms have to evolve their offerings," O’Connell said, which explains The Trade Desk's AI updates. It's important for agencies and brands to understand the new ways that AI is being deployed, however, O’Connell said.

The Trade Desk is trying to explain all the ways AI fits into its programmatic platform. The company designed what it called a "programmatic table of advertising elements," which is supposed to break down the component parts of an ad campaign, such as the audience, data sets, creative, media channels and measurement.

The Trade Desk released an early concept for the programmatic table, which resembled the periodic table of elements. The design was supposed to be a representation of what advertisers will see in the new-look buying portal. The Trade Desk still had some design work to do on the table before it would be released as the user experience for the programmatic ad buyers on its platform.

In its announcement, The Trade Desk described how AI would factor more into connected TV and retail media ad campaigns, which are another two hot topics in advertising. The Trade Desk announced that Walgreens Advertising Group and Albertsons Media Collective were early launch partners, but the company works closely with a number of other retailers. For instance, Walmart works with The Trade Desk to run its demand-side platform.

AI already plays a significant role in programmatic advertising on connected TVs, according to said Jeff Fagel, chief marketing officer at Madhive, which runs a demand-side platform that uses machine learning. "Programmatic advertising moves fast," Fagel said, "you have a tenth of a second to make a decision. This requires synthesizing troves of data, gauging available audiences and, ultimately, predicting outcomes. Before AI and machine learning, these analytics weren't possible."

Advertisers are looking for transparency around AI, O'Connell said. With the interest in AI, ad agencies and brands are starting to consider how it affects their campaigns, such as when and how these models are applied, O'Connell said. In Kokai, The Trade Desk will disclose when AI was used to enhance audience data.

Meanwhile, the Association of National Advertisers released an update to its guidance for agencies, advising that they account for AI in contracts. "An agency must obtain the advertiser's prior consent to use any artificial intelligence applications in the delivery of services," the ANA wrote in its advisory note about ad contracts.

In this article:

Garett Sloane is Ad Age's technology, digital and media reporter. He has worked in newspapers from Albany to New York City, and small towns in between. He has also worked at every advertising industry trade publication that matters, and he once visited Guatemala and once rode the Budapest Metro.