What is an Algorithm?

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Ever wondered how your computer performs day to day functions accurately? There are many forms of technology you may not think about consciously, but when you dive in, it can be beyond fascinating. It is amazing how one key principle in today’s digital era can be basis of various applications.

These days immense amount of work is performed by a digital process or an ambiguous set of rules called Algorithms for obtaining a legitimate task or action. In this growing world of technology, an algorithm is a very important element for speeding up the entire process of programming by finding quick solutions. From the weather update on your phone to maps for your destination, it is all algorithms.

An algorithm is a process of using set of instructions or a formula to solve a particular problem. As derived from a mathematical background, these come in numbers, graphs, coding etc.

Quite simply, if you want a coffee, the steps you take to make it, is an algorithm. Just how there are various steps you can take to make a coffee, an algorithm can vary too. An algorithm can either be basic for simple tasks like basic calculation, reasoning or dynamic. Relying on set of instructions, it will take any initial and completion steps. In programming, the logic and the types behind an algorithm are implemented by your desired coding.

Let us now relate the basis of an algorithm to programmatic media buying. In programmatic media buying algorithms are used for better evaluation, efficiency and optimisation of campaigns. These optimization algorithms traditionally refer to as Artificial Intelligence or Machine Learning (you might come across other types too - like the data mining algorithms that help the crunching of data and the audience segmentation in Data Management Platforms).

Being logical, systematic set of rules which do not blindly follow the pre-defined parameters, they work as a great benefit by learning and adapting along the way. Briefly, Machine Learning algorithms are much more efficient than humans at evaluating exactly what the campaign requires in real-time. Hence, the main goal stays to be choosing the correct bid, right audience and demographic information at the right time for better optimisation.

Real-Time Bidding (RTB) has successfully opened many doors for refined machine learning algorithms for real-time efficient solutions. Machine learning algorithms, therefore play a crucial role in the world of RTB, which is a consistent growing element of mobile and online advertising. Simultaneously, enabling automation and ultimate optimisation at the most granular level.