AI Off The Rails

James Deaker, head of consultancy Korukea Media, warned that autonomous AI systems making commercial decisions without clear governance could pose significant risks to the digital advertising industry. Citing examples like Zillow’s failed AI-powered home buying service and Amazon third-party sellers losing millions due to runaway pricing algorithms, Deaker and AdExchanger’s Joanna Gerber discussed how companies must prepare for potential company-crushing failures as they adopt AI-run systems.

Thinking several steps ahead of where we are in agentic AI, things could go remarkably right – or terribly wrong. And that’s just speaking for digital advertising. James Deaker, head of consultancy Korukea Media, is studying how AI might transform pricing, yield and more for the digital advertising space, and has a nuanced take on what AI may do to our industry. “What happens when autonomous systems begin making commercial decisions without clear ownership, governance or accountability?” Deaker asks on this week’s episode of The Big Story. Deaker wrote a column https://www.adexchanger.com/data-driven-thinking/digital-advertising-needs-guardrails-for-ai/ this week in AdExchanger about the risk that AI unleashes on the industry. He also recently spoke at our Programmatic AI conference and posts The Yield Doctor https://www.youtube.com/@jamesdeaker videos on YouTube with his takes on the sell side. Along with our AI reporter, Joanna Gerber, we dive into his point of view on the potential company-crushing risks that come with moving to AI-run systems. From Zillow shutting down Zillow Offers https://jise.org/Volume35/n1/JISE2024v35n1pp67-72.pdf , its AI algorithm-powered home buying service, to heavy losses to Amazon third-party sellers hawking textbooks for $24 million https://www.wired.com/2011/04/amazon-flies-24-million/ due to pricing algorithms gone wild, we talk through how digital advertising companies should be thinking about what could go wrong as they harness the innovation that AI can unleash.