What is an algorithm in digital marketing?

What does and algorithm do in Digital Marketing and how to reap the benefits

Another day in the world of marketing, another problem. And, another timely solution.

According to the dictionary, we can call an algorithm the set of systematic operations to be followed in calculations and offer a solution to a problem. For example, if we want to make a cake, the recipe would be our algorithm. As for marketing and its performance campaigns or branding, the use of algorithms is what will help us reach our goals.

Algorithms and why they’re important now

Initially, algorithms were used professionally in industrial processes or as market intelligence tools. However, in today’s world, business and technology is full of them, allowing for predictive calculations based on variables we either want or have.

In the digital marketing world, algorithms help us manage our customers, so that the right content can reach them in the best way.

For a successful algorithm, we need to base it on data on habits, behaviour, likes, experiences that we have gathered from our customers so far. In this way, we can decide who will receive what based off of different aspects like hobbies, age, location. This is called audience segmentation.

Where are algorithms used?

Some very common uses of algorithms in marketing are:

• Search engines: when you go on your search engine of choice to look something up, the search engine takes millions of possibilities and decides in a fraction of a second what will appear up the top of your search results. This is all thanks to algorithms.
• Social media: have you ever wondered why certain posts or pages appear first in your feed? Well, that’s algorithms once again, showing you both organic and paid content that you might be interested in.
• Streaming services: these offer us new content based on what we’ve already watched. Basically, they take our data to make predictions on content that could interest us and that’s how we continue watching.

With the right data, algorithms can help us improve spending and get the most out of our on going campaigns.

Smart bidding: Social Media and Performance’s Love Child

It’s very clear how important algorithms are for a brand, given that they can help with achieving one of the most important goals: conversion. This is why managing algorithms has become one of the main pillars of marketing strategies, with performance and paid media departments cementing it in place.

How effective an algorithm is and how it is used will be key for positioning products and even the brand itself (which is why not all search engines or streaming platforms are successful).

Advertisers are now able to pinpoint the results of their campaigns, taking away the guesswork and creating clear algorithms based on real information. Smart bidding is the set of bids used in ads, with the aim of increasing the budget and gaining more conversions for a smaller price.

These bids can be split into groups using key words, all based on campaign and client objectives, making investment more efficient.

More problems, more solutions. In the marketing world, there an ever-growing number of great solutions out there. Algorithms and all the technology that comes along with it makes our work much simpler and more effective. However, we can’t forget the importance of the human touch, which helps give such a key tool meaning.