Marketing optimization algorithms: How do they work?

ARTICLE

An algorithm is designed to fulfill a given goal 

Like for any advanced optimization machine, algorithms are the brain of Ambine. But what does this actually mean? Basically, an algorithm is a series of commands or calculation steps that define which actions help you achieve a given goal. Ambine has a straightforward goal: get more of desired key results, such as clicks, conversions, or completed video views, with a given media budget.

The means Ambine has at hand are simple as well: reallocating budget between programmatic line items, and thus controlling which line items get the biggest emphasis in the campaign. In this setting, it is the algorithm that defines exactly how the budget reallocations should be done, to best work towards the given goal. The algorithm replaces quite a bunch of manual analyses in a blink of an eye.

Two-fold optimization: increase efficiency & ensure budget spending

Ambine’s goal is to increase the number of key results, such as conversions or clicks, by redistributing the budget between line items. The road to this goal requires considering both line item efficiency and budget spending potential. Surely the most important factor here is efficiency: more efficient line items bring more bang for the buck and have the potential to significantly increase the total number of desired events in your campaign.However, it is not unheard of a line item being very efficient but still a lousy subject for extra budget. How? By not having budget spending potential. Only looking at efficiency can lead to severe under-spending and consequently a lot smaller catch.

To wrap it up, the two leading principles for the algorithm are:

 

  • Efficiency improvements help the budget stretch further.
  • In the end, unused budget is lost potential.

 

The algorithm then works to balance between these two to produce the maximum number of key results within the budget limits.

Inside the algorithm

With the simple goal and rather simple means to get there, the algorithm itself has a number of nuts and bolts to adjust in order to gracefully achieve the goal. Daily calculations for efficiency and potential predictions are at the core of the success of the algorithm.

Even the very fact that the changes are done daily has a big impact. This way, it is enough to make a short time frame prediction. When we learn new information, it is automatically ingested through the algorithm to enhance the budget allocations further. 

Summary

Algorithms are what makes, if not the world, at least optimization go round. A carefully crafted and reliable algorithm is what makes an optimization engine worth relying on and truly a necessary companion to reduce tedious and repetitive tasks. 
Are you ready to put algorithms to work and focus on other aspects of your marketing? Drop us a note or schedule a demo to see how our algorithms can boost your programmatic efficiency.

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