Editor’s note: Benjy Weinberger is the engineering site lead for foursquare’s San Francisco office. He previously worked on infrastructure and revenue engineering at Twitter, and before that on search and ad engineering at Google for eight years.
Microsoft recently announced that it’s taking a huge $6.2 Billion writedown over the failed aQuantive acquisition. This news, and the scrutiny of Facebook’s business model following their IPO drama, show that, in online advertising, it’s all about the targeting.
As this Reuters analysis explains, there’s so much online advertising space that merely putting billboards up all over the internet is no longer a lucrative business. Meanwhile, Google AdWords remains phenomenally successful, generating over $36B in revenue in 2011. The key difference? targeting. Google’s sophisticated ad-targeting algorithms greatly increase the relevance to the user, and therefore the likelihood of the user clicking on an ad. This is what makes AdWords so much more effective than banner ads.
So why isn’t everyone just improving their targeting? Unfortunately, it’s not that simple. Ad targeting is a difficult artificial intelligence (AI) problem, and while you may not agree that it’s a worthy one, it does require a lot of technical heavy lifting. Here’s why (…) Leer más “Ad Targeting Is Hard”