 
Very few current attempts at campaign optimization qualify as real-time. Most barely even qualify as optimization, at all. Riddled with slowness and computational inaccuracy, current optimization procedures appear dramatically out of synch with the fleetingly quick campaign cycles and infamous accuracy of measurement that characterize Internet Advertising.
The crux of the trouble is that campaign optimization is, as things now stand, mostly a manual endeavor, wherein some person - typically working on behalf of the advertiser - is responsible for manually sifting through the mounds of data that are produced by a campaign, manually analyzing it, and manually
making mid-course campaign adjustments based on this analysis. By the time campaign adjustments are finally made, so much time has elapsed, and so much critical data has been either overlooked or misinterpreted, that the optimization process yields campaign performance boosts that are routinely minute.
Enter real-time optimization. The endeavor of real-time optimization, currently being pursued by a number of firms (Paramark, Advertising.com, and Poindexter Systems, among them), is to enable the effective harnessing of incoming campaign data, in true real-time. Whereas, with manual optimization, there are substantial limitations on how much and how quickly campaign data can be put to use to boost campaign performance, with real-time optimization - in theory, anyway - all incoming data is acted upon to boost campaign performance, immediately upon its availability.
Traditionally, optimization has played a relatively isolated role in Internet Advertising campaigns, and has been thought of mainly as a way of impacting campaign performance, on a campaign-by-campaign basis. While real-time optimization is able to reliably improve the performance of any single campaign by 10% to 250%, avant|marketer believes that the advent of real-time optimization is likely to have far wider impacts than merely this. As the following interview brings forth, real-time optimization has the potential to fundamentally alter the way in which ad targeting and personalization are implemented in the online environment.
In what follows, avant|marketer Editor, Ajay Segal engages Hitendra Wadhwa, Founder of leading real-time optimization technology firm, Paramark, makers of the PILOT real-time optimization platform, in a revealing and important discussion about the implications of real-time optimization for the future of Internet Advertising.
In the course of the discussion, in-depth consideration is given to the nature of real-time optimization; how real-time will supplant current manual optimization methods; the significant impacts real-time optimization is likely to have on ad targeting practices and campaign performance; the real-time optimization of Internet Branding campaigns, and the automated real-time optimization of the total media mix; and the “bigger picture” role of automation and real-time technology applications in the future landscape of Internet Advertising.
avant|marketer: What exactly is real-time optimization?
Hitendra Wadhwa: Real-time optimization is a particular process that allows interactive marketers to extract the best possible performance from direct response campaigns.
Basically, real-time optimization technologies are designed to be deployed to analyze the enormous piles of data that are collected through interactive channels during the course of a campaign, learn from these data piles, and translate that learning into action, by automatically adjusting interactive campaigns in real-time - as soon as those learnings become available to the system.
avant|marketer: Give us a synopsis of how campaign optimization is currently done. What are the specific areas in which the current optimization tactics are most lacking, and why do you believe the industry really needs real-time optimization?
Hitendra Wadhwa: Well, the most common way of doing optimization today is really not doing optimization at all. Certainly, in most campaigns, there is the appearance or feeling that optimization is being done: Lot's of data is being collected by advertisers, and via a whole variety of interactive channels - through banner, email, ecommerce servers, and so on. But, most of this data just sits there, and remains untapped.
The more diligent interactive marketers out there, who do engage in some actual optimization, might review campaign performance data periodically - typically, we're talking about these data reviews happening once every one to two weeks - and then, adjust their campaigns accordingly. This is essentially a manual optimization process, which typifies what goes on in the industry right now.
But, there are really a number of things significantly lacking in the manual optimization processes.
The first problem is that manual optimization is a very slow process, which means that, even if it does uncover important information, it does so after that information is useful, and, therefore, doesn't put the advertiser in a position to react to data swiftly enough to make any significant difference to campaign performance.
Manual procedures are also not done in a statistically rigorous fashion, and so, most often, doing optimization manually involves making misinformed judgments, based on overly simplistic rules of thumb.
I would say that the third critical problem is that manual optimization is not comprehensive in its analysis of the incoming campaign data. Therefore it's unable to identify and target different customer segments properly, even though a true, comprehensive data analysis would show that certain customer segments are statistically important, and could impact campaign performance significantly.
So real-time optimization, by basically automating the process of optimization and moving it to a truly real-time basis, in essence, is able to overcome these challenges, and allow advertisers to extract a much higher level of performance from Online Advertising.
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