Algorithm driven Online Ad Optimization

Those who have done or have been doing SEM since it became popular last decade, would understand the importance of Pay Per Click Bid Optimization. How allocation of SEM budgets and CPC bidding tactics had to be applied in near real time across hundreds of thousands of Keywords, to maintain aggressive CPAs even while trying to meet Conversion targets. During initial years of SEM, which was specifically second half of last decade(2004-2010): 

• Competition was not tight 
• CPC prices were lower and
• Generating Leads was much easier.  

Now in 2013, all these 3 points have changed and 

• Competition has become bigger both in breadth and depth.
• CPC prices have increased, skyrocketed in some Industry Verticals.
• Generating qualified Leads has become even more difficult.

So manual intuitive bidding tactics or using Off-the-shelf bidding software is no longer useful.

Also other forms of Online Marketing like Online Display Ads and Email Marketing have seen huge improvements in Conversion Rates (%) over the years, due to application of successful Ad Re-Targeting algorithms. Just few years ago, SEM & SEO were the undisputed champions of Online Marketing. However now Algorithm driven Re-Targeted Online Display Ads are increasingly eating away Conversions from SEM & SEO. Google itself is promoting usage of Re-Targeted Online Display Ads to its Adwords accounts, offering multiple Ad formats apart from mainly Search Ads few years ago. 

Also new Online Channels like Twitter and Facebook have become more popular, though they are yet to prove their impact in Online Advertising, as their Online Ad share in still minuscule compared to Google Search Ads or Display Ads or even Email Marketing.

To summarize the above points

1. Changing Economic Cycles
2. Increasingly intense competition for generating qualified Leads or Customers Online
3. Ever rising CPC prices in SEM
4. Re-Birth of Online Display Ads and even Email Marketing as very reliable high Conversion Online Channels (both these had been written off few years ago) and 
5. Finally proliferation of new Online Channels like Twitter or Facebook etc.

.......Have all increased the sophistication of Online Marketing. It is no longer efficient or effective to manage Online Ad Campaigns by throwing some internal teams and some external agencies. 

Welcome to the world of Algorithm driven Online Ad Optimization. The need of today, is to develop Algorithms which can process massive volumes of Online Marketing content and data in real time to effectively allocate Online Ad budgets across Online Channels, identify right mix and delivery of targeted Online Ads at right time to prospects to meet Conversion targets and maintain ever more aggressive CPAs.

Just like in Financial Services sector, where savvy Hedge Funds use sophisticated Algorithms to allocate Clients budgets optimally across stock or asset portfolios, even Online Ad sector needs to create sophisticated Algorithms to allocate Account budgets optimally across Online Channels or Ad portfolios. It's just the same.

Signature: Roopkumar T.V.