How often does an agency media planner ask an ad tech company “what does your algorithm do?” Probably not very often. Media planners, young and overworked, afraid of making mistakes, want only to be reassured that they will get the reach and frequency they need within the budget they have. They don’t have the time or the training to look under the Emperor’s new clothes. But they should.
In this case, the fancy new clothes are algorithms. Each time the planner meets with an ad tech vendor, the talk turns to algorithms. Or more accurately, “proprietary algorithms.” What is an algorithm? It is a set of rules that tells a computer what to do. In ad tech, on a demand-side platform, the algorithm tells the computer what to buy to reach the advertiser’s goals. But there are many ways to reach a goal. For instance, let’s say your client makes wedding dresses. One algorithm could tell the computer to bid on bridal magazines and pay any price, while another algorithm might tell its computer to buy women 18-25 in North and South America, and still a third might instruct the computer to buy college campus newspapers or alumni magazines.
The example above is an oversimplification. Most algorithms will involve more complicated combinations of instructions, such as size of the ad, eCPM, reach, frequency, and even placement. The rules get more and more complex. A buyer of advertising buys with a target market, a customer avatar, and an ROI in mind. In the meeting with the vendor, she often shares that with him. The vendor says he can promise the market and the ROI. The planner thinks she is buying advertising space, but really she is buying algorithms. And because she doesn’t understand the differences between one vendor’s algorithm and the next, she’s buying blindly even though she knows her market and her goals. Without understanding the algorithms, she has no idea whether the vendor can deliver, or where her ads will show up.
She has no idea how the vendor she has chosen sorts all that data to come up with the most effective buy for her specific purpose.
How do we fix this? Training. Media planners must learn to ask intelligent questions that force the vendor rep to get geeky and talk about how his company’s algorithms work. Only then will they know whether a specific vendor can do the job that needs to be done.