Much of the magic of real-time bidding can be found within machine learning. Sophisticated algorithms "learn" complex patterns based on large amounts of data in order to make optimal advertising decisions. Sum product is cost avoidance and value creation.To create machine learning magic, two ingredients are required: scale and prediction. Scale speaks to the need to make more users/impressions available through the auction marketplaces, and increase the number of advertisers bidding on these users. The bigger the scale, the more sophisticated the data-driven prediction can be. The second ingredient requires that the prediction to be "accurate enough."
In a recent ClickZ column, Xuhui Shao, Chief Technology Officer at Turn discusses machine learning magic in a real-time environment. more>>