I wonder, with that massive amount of ads + searches Google has, if there’s some merit in allowing the software to figure it out for itself... evolutionary algorithms, self-learning style.AdWords and AdSense already self-optimize depending on ad clickthrough rates, but Philipp is talking about something more here.
Search sessions are automatically grouped into general patterns, and then random ads are presented, and when an ad performs well, more ads from that ad segment will be displayed next time, and so on, causing a "survival of the fittest ad" environment.
Then when Google meets the press in 2012, they can tell the journalists, "We don’t have a clue anymore how our ads work, but click-throughs are higher than ever."
Rather than have ad systems target to specific keywords, let's make the ad systems target to micro-groups of intent, where intent is determined both by current actions and past behavior.
Rather than specify exactly who to target an ad to using keywords, the keywords merely would be hints to the ad engine, a starting place for a likely target audience. Ads submitted enter a great pool of experimentation where ads are shown to different audiences with different behavior, culled where they fail, reinforced where they succeed.
As much as I like this idea, ad systems appear to be headed in the opposite direction, with offerings from Microsoft and Yahoo touting the additional controls -- the knobs and levers -- they give to advertisers.
It is not surprising that advertisers want control over their ads, but, in the long-term, ad systems are most effective when they serve two audiences, consumers and advertisers. Consumers pay attention to useful and helpful ads. Advertisers want effective ads that consumers pay attention to and use.
Relevant ads are useful, helpful, and effective. While giving up control may be hard for advertisers, it is inevitable that they will have to do so. It is impossible for advertisers to manually tune their ads to millions of micro-audiences with subtle variations of intent. Only an automated solution can deliver that.
Eventually, we will see organic, self-organizing advertising systems. Advertisers merely will give their ads some guidance as they nudge them out the door. Then, they will sit back and watch as the ads find the audiences they seek.
Update: If you might enjoy a version of this for search relevance instead of ad relevance, you might also be interested in my earlier post, "The perils of tweaking Google by hand".