Real Time Ad Optimization: Data, Speed and Optimization

There's an interesting trend forming in online advertising. Right now you can purchase ads from ad exchanges by bidding on them. But what is that banner ad really worth? Depends on the site, the page, the person, the time and lots of other factors. People have been optimizing on some of the static stuff and basic behavioral and contextual information too, i.e. where you've been and what that means to you (that's right Mr. Porny).

But what if you knew everything about the user and the placement before placing your bid. You could optimize your bidding strategy. Impossible? Well, we are getting there. But it's a fascinating problem. How do you get all that info, process it, and come up with a bid in real time? How do you get so specific that you take advantage of all information but not so specific that your target is too narrow? The more narrow your focus, the smaller net you cast. How do you deliver the exact right ad for a million impressions a second? Tough stuff.

So what really matters? Is there some secret sauce? Well people are playing around right now with all kinds of info. Media 6 Degrees uses demographic info mixed with who your Facebook friends are (and you thought that was private right?). eBay calculates your propensity to buy based on previous site visits and other factors. But it could be anything and everything. You might be amazed what every ad network knows about you and what if that information was shared to vendors? There's going to be a lot of interesting development in understanding what makes the "right customer" ready for that exact ad, and it will be decided in milliseconds.

And if your net is too small looking for that exact red fish with blue gills, 1 ft long in the medittreanean, you'll probably miss out. With all that data, you'll now be able to realize that there is another correlation that really matters and allows you to extend your net. Maybe it's red fish with a spiny dorsal fin. There is going to be a lot of interesting work going out there on figuring out what really matters, and finally there will be the massive amount of data and computing power needed to do it with.

So what does this all mean? It means ads you'll want to click on. Ads that provide you value and enrich your experience even. It also means less ads, since each ad will therefore be worth more. It will be an approach that is used on the Internet, your mobile device and TV (which will be the Internet essentially anyway). It will be everywhere where you can be tracked.

Be prepared for a more personalized Internet. And probably a massive privacy scandal on the Internet like we haven't seen before. 2010 is going to be an interesting year.