The Israeli company, which raised $41.4 million in a London Stock Exchange IPO, uses big data and machine learning to target ads better than their competitors
Just as the game of chess had a turning point in 2005, when computer programs were able to beat even the best human players, something similar is happening in the world of advertising. Programmatic advertising, which involves the use of algorithms to automate the ad bidding and placement process, is projected to account for half of all digital ad sales by 2018.
Today, Israeli Adgorithms is placing its stake in the game: The company announced on Thursday that it completed an IPO on the Alternative Investment Market of the London Stock Exchange, raising £27.0 million ($41.4 million). Priced at ($2.03) per share, the company’s total market capitalization is currently about £82.1 million ($127 million).
Adgorithms allows businesses of any size to harness a software-as-a-service (SaaS), automated ad-bidding platform that learns and improves over time. The platform, which the company calls Albert, optimizes online display, mobile, video and social advertising campaigns.
“Machine intelligence is generating shareholder value in many fields: finance, transportation, manufacturing, defense and logistics, among others,” said Or Shani, founder and CEO of Adgorithms, in a statement. “The support shown by institutional investors is a strong endorsement of our technology, business model and future growth prospects as we continue to democratize access to ‘self-driving’ advertising for any size campaign or company.”
The company, which founder Or Shani launched in 2009, is headquartered in Tel Aviv with a sales and marketing office in New York.
Our artificial intelligence is better than your artificial intelligence
Let’s say you sell dog clothing and you want to target dog owners over the age of 50 who live in Evanston, IL, or outdoorsy women who live near Aspen, Colorado. No human being can possibly target the optimum cluster of people better than an algorithm can. Plus, an algorithm can work 24/7, bid in real time, and learn from what works: Maybe dog owners over 60 are twice as likely to buy your clothing as dog owners between 50-60.
But since most programmatic ad platforms say they use artificial intelligence of one kind or another, what makes Adgorithms stand out from the crowd?
On the company’s website, they explain, “By cultivating and adapting the newest, fresh out of the academy, models and techniques in the fields of machine learning and AI, we make sure that our clients get, not only the best and most precise optimization process, but also the most efficient process science can offer.”
In other words, our AI is better and newer than the competition’s. Just as one chess-playing computer program can be better than another’s, this is definitely possible, but the burden is on the company to prove it with conversions.
Featured Image Credit: Adgorithms / Vimeo