Advertising is the one of the hardest problems in the modern economy. Many of our favorite Internet sites and television shows depend on advertising revenue, from Facebook to Mad Men. Yet, in spite of the hundreds of billions spent annually worldwide and the tens of billions spent in the US digital advertising market alone, effective advertising is largely an unsolved problem. It’s a matter of finding the perfect balance between consumer attention and advertisers’ goals, which has largely been elusive to date. This magic equilibrium is a highly technical and artistic problem at a massive scale, since billions of pieces of content and daily viewed ads require a rare combination of skill sets and capabilities that most organizations lack.
Some of the smartest minds have been working on this problem at places like Google and Yahoo, and they’ve solved a large part of it — algorithmic relevancy. First, with search ads, they figured out a way to put the right advertiser in front of the right consumer using search history. Then, with contextual text ads, they extended their solution. Now, many of these great minds have figured out how to do the same with display advertising, so that a display ad reaches the right audience by using click, browse, and search histories. [Read more…]