Demographic Targeting With Epsilon-greedy Exploration in Digital Advertising

Digital advertising agencies and advertisers place billions of ads on search network every day. Managing these ads brings a lot of workload. One of the biggest problems in the growing digital advertising industry is bid optimization. The selection of the target audience, the randomness of user inquiries, the determination of ads by the auction system are the main factors that complicate the optimization problem. Reinforcement learning algorithms have become popular with their structures that provide solutions to complex problems in the field of advertising optimization in recent years. In this study, we determined the device, age, city and gender information of the target audience that will maximize the conversion rate of the campaign by using the most basic of reinforcement learning algorithms which is epsilon greedy.