How does Price Genius work?
Last edited: 2024/05/06
- First, we randomly divide the traffic into three groups: Exploration, Optimization and Benchmark:
- Publisher can control the share of Benchmark in the UI.
- The traffic managed by Price Genius is further divided into two fractions (this split is fixed):
- Exploration (10%) - part used for gathering data on how the inventory reacts to price changes, which is then the basis for modeling (we are running multiple parallel A/B tests).
- Optimization (90%) - the part where optimal prices are set.
- The essence of Price Genius is price prediction/modeling:
- Each ad unit gets individually estimated price forecasting models (per 2024.05, we have six various models - based on Machine Learning, Time series analysis, or mathematical modeling).
- Each model for each ad unit is recalculated and adjusted daily.
- Price Genius automatically selects which of the models best fits a particular ad unit and takes its prediction as an optimal price.
- Optimal prices are set daily (at night); to do that, we are using the GAMs API connection.
- We compare the performance of the entire Price Genius part of the traffic with Benchmark and present it in a dashboard.
- If Price Genius does not outperform your pricing strategy, it automatically switches to ‘standby mode’ and applies your pricing rules to 90% of the traffic allocated to Price Genius.
