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IBM Watson to Make Unruly's Digital Video Ads More Targeted
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Shares of International Business Machines Corporation (IBM - Free Report) have underperformed the broader Zacks Computer Integrated Systems industry on a year-to-date basis. While the industry generated a return of 29.5%, the stock returned 21.1%.
The underperformance of the stock could be attributed to the ongoing and heavily time-consuming business model transition to the cloud. Further, sluggish IT spending, particularly in the on-premises and data center hardware and foreign exchange volatility remain concerns. Moreover, intensifying competition in the cloud is a major headwind.
Nevertheless, IBM's strategic growth initiatives, including its Big Data & business analytics, cloud computing, mobile and social business are expected to drive growth. In addition, the company’s policy of making strategic acquisitions will lead to incremental revenues, strengthen its technology leadership, resulting in a more favorable mix of business. The acquisitions have also increased its scale of operations globally.
Meanwhile, the company recently announced that Unruly – a British ad tech company – has teamed up with IBM Watson to build a new cognitive powered psychographic targeting tool in order to make digital video ads more audience targeted and thus more effective.
How it Works?
Unruly DNA, comprising the ad tech company’s emotional intelligence tools, will now have the advantage of machine learning to zero in on prospective customers which are most likely to purchase a particular brand.
By categorizing customers based on certain personality traits, such as assertiveness, trust, empathy and imagination, Unruly DNA will be able to generate lists of recommended third-party audience segments, which could be tapped by the advertisers to improve their marketing campaign’s efficiency.
What does this Mean for IBM?
Per an IDC report, worldwide spending on cognitive systems and artificial intelligence is estimated to be over $47 billion by 2020 that is currently growing at a CAGR of 55.1%. Not surprisingly, there is stiff competition in the space, with the presence of some big players such as Google’s (GOOGL - Free Report) DeepMind, Amazon’s (AMZN - Free Report) Amazon AI and Microsoft’s (MSFT - Free Report) Microsoft Artificial Intelligence and Research Group.
Notably, in Oct 2016, IBM bought Promontory Financial Group – a Washington-based financial consulting firm – in a bid to broaden the reach of its artificial intelligence division, Watson, into analysis of financial regulations and provide the most appropriate course of action to financial institutions. (Read More: IBM to Create Watson Financial Services with Promontory Buy).
During third-quarter 2016, IBM introduced Watson Conversation Service and Watson Virtual Agent for Customer Service. The service has already been selected by the likes of The Royal Bank of Scotland Group plc.
Given IBM Watson’s popularity in the space, we anticipate seeing more of such adoptions in the future, which will definitely have a positive impact on the company’s bottom line.
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IBM Watson to Make Unruly's Digital Video Ads More Targeted
Shares of International Business Machines Corporation (IBM - Free Report) have underperformed the broader Zacks Computer Integrated Systems industry on a year-to-date basis. While the industry generated a return of 29.5%, the stock returned 21.1%.
The underperformance of the stock could be attributed to the ongoing and heavily time-consuming business model transition to the cloud. Further, sluggish IT spending, particularly in the on-premises and data center hardware and foreign exchange volatility remain concerns. Moreover, intensifying competition in the cloud is a major headwind.
Nevertheless, IBM's strategic growth initiatives, including its Big Data & business analytics, cloud computing, mobile and social business are expected to drive growth. In addition, the company’s policy of making strategic acquisitions will lead to incremental revenues, strengthen its technology leadership, resulting in a more favorable mix of business. The acquisitions have also increased its scale of operations globally.
Meanwhile, the company recently announced that Unruly – a British ad tech company – has teamed up with IBM Watson to build a new cognitive powered psychographic targeting tool in order to make digital video ads more audience targeted and thus more effective.
How it Works?
Unruly DNA, comprising the ad tech company’s emotional intelligence tools, will now have the advantage of machine learning to zero in on prospective customers which are most likely to purchase a particular brand.
By categorizing customers based on certain personality traits, such as assertiveness, trust, empathy and imagination, Unruly DNA will be able to generate lists of recommended third-party audience segments, which could be tapped by the advertisers to improve their marketing campaign’s efficiency.
What does this Mean for IBM?
Per an IDC report, worldwide spending on cognitive systems and artificial intelligence is estimated to be over $47 billion by 2020 that is currently growing at a CAGR of 55.1%. Not surprisingly, there is stiff competition in the space, with the presence of some big players such as Google’s (GOOGL - Free Report) DeepMind, Amazon’s (AMZN - Free Report) Amazon AI and Microsoft’s (MSFT - Free Report) Microsoft Artificial Intelligence and Research Group.
Notably, in Oct 2016, IBM bought Promontory Financial Group – a Washington-based financial consulting firm – in a bid to broaden the reach of its artificial intelligence division, Watson, into analysis of financial regulations and provide the most appropriate course of action to financial institutions. (Read More: IBM to Create Watson Financial Services with Promontory Buy).
During third-quarter 2016, IBM introduced Watson Conversation Service and Watson Virtual Agent for Customer Service. The service has already been selected by the likes of The Royal Bank of Scotland Group plc.
Given IBM Watson’s popularity in the space, we anticipate seeing more of such adoptions in the future, which will definitely have a positive impact on the company’s bottom line.
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Zacks Rank
At present, IBM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>