Managing Real-Time Advertising, How It Works

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July 12 (Bloomberg) -- Quantcast Co-Founder and CEO Konrad Feldman discusses real-time advertising exchanges with discusses Cory Johnson on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Your business is huge.

How many data centers do you operate?

Close to 20. we rent the space, but all of the machines and software is our own.

How do you describe what we do?

We specialize in audience measurement and real-time advertising.

We have created a technology that can take massive amounts of information and use predictions about people's interests to make the advertising on the web more relevant.

How big is the data you are working with every millisecond?

As many as a million transactions per second.

The process at as much as 30 petabytes a day.

That is massive.

The real-time processing is distributed.

The data centers need to be where consumers are and where these advertising exchanges are which are conducting these auctions.

I think of "madmen" ad buying, and a guy in an office with a phone saying, we will take a couple of ads on "i love lucy" tonight.

You are talking about instant auctions like a stock market almost.

You have buyers and sellers instantly exchanging information as the page is rendered.

That's exactly right.

Many of the ads we see online today are auctioned in real- time.

There are tens of billions of these auctions every day.

Each one is resolved in 100 milliseconds or less with the highest bidder winning.

In advertising, you would look at basic demographic information, household wealth, male, female, age.

Are those still the metrics used?

Those are still important, especially for brand advertisers.

But you can do more than demographics.

We will work with the advertisers to understand what is distinctive about the types of customers that are finding their products and purchasing them.

Then we will build models that update in real-time to find other people that are similar.

Give me an example of what a certain user would look like to an advertiser?

A user will have a set of interests that are expressed based on a range of factors including the media they have consumed.

People could create hypotheses about what might be relevant.

Using artificial intelligence you have a way of systematically finding patents that are relevant -- patterns that are relevant.

Until today, i've never expressed a great interest in shark or movies -- horror movies.

Are the advertisers able to figure out that people like me are discovering this new interest and serve it ? exactly.

Data is being incorporated in real-time.

A consumer may find something relevant and that can be used to adjust the content delivered.

What do you mean by artificial intelligence?

Computer systems that can respond with some ingenuity of human decision-makers.

These auctions are occurring hundreds of thousands of times a second.

There's too much information into short a time for humans to make those decisions.

We are getting machines to make the sorts of decisions that people would make if we had enough people and most people could make decisions quickly enough.

No more noting your nielsen guidebook.

Thank you very much.

This text has been automatically generated. It may not be 100% accurate.

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