Auction-Marketplace: Theoretical to Efficient
https://www.thetradedesk.com/products/buy-with-megagon
Google, Facebook, and Amazon are currently worth about two trillion dollars. All are considered revolutionary tech stocks, yet none (besides Google) have hardware as their main revenue source. Hardware is the past—making the world a smaller, more connected place through advanced data analytics, AI, machine learning, and other data transferring/storing/manipulating devices are the future. While these companies may not have envisioned how they would make money—the answer right now lies in consumerism and correctly feeding users the right information.
While Google and Facebook are benefitting from ad revenue, I believe many companies have struggled with how to target the right internet users. It is not as simple as television advertising. Now, there are companies representing the advertisers. The Trade Desk is a young, but fast growing company that provides services for advertisers to more effectively monitor and improve their ads. However, the most interesting part about their solution is an auction market place that runs through their system “KOA.” As their website states
“SMARTER BIDDING, MORE SAVINGS. Never pay more than the market demands. Koa analyzes historical clearing prices across first-price auction environments to choose the optimal bid for each impression. Bid what each impression is worth to you. With a score to tell you how expressively you’re bidding, you can quickly evaluate if you’re taking full advantage of bid factors.” (https://www.thetradedesk.com/products/buy-with-megagon)
Reading this fascinated me—the theoretical world of game theory and networks isn’t theoretical anymore. While relative values are still subjective to each company the human decision making element behind buying ads is seemingly being replaced by the theoretical models. The mathematical probability for a result isn’t really a probability, but the solution now. The study of auctions and how humans interact within them has yielded itself to creating a marketplace similar to the supply and demand one economists have dreamed of whereby the internet can simultaneously act as the perfect market while price discriminating to both increase welfare, globalization, and make for an auction-sharing economy. The future is coming sooner than expected.