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With programmatic growing to become the primary method for digital marketing, the traditional standardized algorithms for bidding can no longer meet the needs of advertisers who want to truly leverage the campaign data and reach outcomes unique to their own business.

What is Custom Algorithm?

A custom algorithm is a set of bidding dynamics that are generated on an individual campaign basis and designed to deliver outcomes that are aligned to a specific advertiser’s goals. It allows advertisers to own not only the data they input, such as the log level data file or data transfer found in DV360 or Campaign Manager, but also the resulting learnings.

How does it work?

Usually, these algorithms are supplied by demand-side platforms and so can’t be finely tuned to an advertiser’s customized goals. Advertisers use their own first-party data to power their custom bidding algorithms, which makes it possible to focus on factors relative to impression level data and therefore optimization based on historical data.

Understanding, evaluating and bidding on the variables or attributes of an impression at the price that makes sense to the advertiser can be achieved through multiple optimization methods, but it becomes most scalable through the development of custom models designed to achieve the advertiser’s business objectives.

The benefits

  • Be ahead of the game.Let’s say two competing brands were using the same DSP for bidding, they would be using the same algorithm, with access to the same 2nd and 3rd party data, and the same inventory. They would be completely competing on every impression, and the only way to deliver the campaign is to compete on price. There is no optimization model or unique inventory to rely on in order to meet the needs of the campaign. But with custom algorithms, the advertiser can be ahead of the game, they fuel their buying with both unique intelligence and impression level data that is unique to them and can pursue customers more valuable to them in a more efficient manner.
  • Choose your own optimization. Programmatic buying platforms enable advertisers to optimize to a standard set of performance goals such as viewability, click-through rate or cost per acquisition. Many have the function to allow you to upload your own algorithm which is great news for the industry. Some brands, for example, have a specific way to measure viewability or they optimize to reach people who spend a particular amount of time on their site. Whatever it is, building an algorithm allows control of the data points that are taken into account during the optimization process – so you can build your custom funnel into your algorithm.
  • Customize and utilize the unique assets.Sometimes unique assets from brands can’t be activated in a standard DSP or brands are reluctant to expose it within shared infrastructures. As a competitive differentiator, first-party data is becoming more and more powerful, and using it properly can have a significant impact on the performance of campaigns. Many advertisers collect vast amounts of learnings that are never extracted for activation and the team at Bidmath can help you embrace your first party data.

With new technology, skills and services more widely available in programmatic now, the barrier to entry for advertisers that create a custom algorithm is easier.

If you are interested and don’t know where to start then contact us to understand how this can work for you:

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