Analysis of Real-Time Bidding

Question

I'm totally new to the topic of real-time bidding in which I know Machine Learning algorithms are used pretty often.

Can somebody explain me the system in a plain language i.e. a language for a non-technical person?

What is the bidding? Who bids on what? Where does Machine Learning get involve?

What is cookie matching mainly about?

Answer 1

A simplified example: suppose two companies: the webpage owner and a book store. And a customer named Jane, interested in reading.

The web page owner has some free space on its page, which can be sold for advertisement. The book store wants to place an advertisement on the same web page, in order to increase sales. Both companies meet eachother at an auction, where the web space is sold to the highest bidder in real-time.

So, the book store is bidding on the right to show an advertisement to Jane, who is visiting the page of the webpage owner.

The machine learning is done on the part of the book store, who receives information about the web page visitor. This can be all sort of information that the web page owner wants to release, and that could be of any use to the bookstore.

Based on this information, it is decided weather to make a bidding for the advertisement space or not, and the amount up to which the book store will want to make a bidding.

Without cookie matching, the webpage visitor Jane will probably not be identifiable by the bookstore, so the store must decide on bidding, based on parameters like geographical location of the customer, browser version (just to name a few ).

With cookie matching, each visitor/customer gets a unique identifier at the book store. Based on this identifier, the book store has more information of the visitor, like: what ads have been served before, and how long ago ? This visit to the web page can be linked to earlier visits and this information will likely ease the decision making process for doing the bidding on the advertisement space.

( There is more to it as there can be two more intermediary companies: one that holds the auction and one that delivers the ad )