System and method for building a targeted audience for an online advertising campaign

A system for building a targeted audience for a present online advertising campaign is disclosed. The system comprises a database for storing data related to each of the plurality of products with each product associated with a previous online advertising campaign and a processor in communication with the database and configured to execute computer-readable instructions causing the processor to utilize the data to identify at least one previous online advertising campaign as being similar to the present online advertising campaign, learn from the identified previous online advertising campaign(s) to predict a probability of conversion of each of a plurality of customers when exposed to an impression of the present online advertising campaign, and build the targeted audience for the present online advertising campaign based on the predicted probability of conversion. A method for building a targeted audience for a present online advertising campaign is also disclosed.

FIELD OF THE DISCLOSURE

The present disclosure relates generally to a system and method for building a targeted audience for a present online advertising campaign.

BACKGROUND

Online advertising campaigns are often used to advertise a particular company, service, and/or product through a coordinated series of advertisements or promotional marketing messages delivered to a targeted audience by way of an online or Internet-based marketing channel. Online advertising campaigns are typically used to boost awareness of the particular company, service, and/or product for purposes of generating a demand for the product, the service, and/or products and services of the company.

There are various ways of assessing the effectiveness of an online advertising campaign. One way of assessing the effectiveness of an online advertising campaign is by calculating a click-through rate (CTR). The click-through rate generally represents the number of clicks on an icon or hyperlink of an online advertisement per the number of times the advertisement was shown. Typically, a click-through rate of 0.2% or higher is indicative of an effective online advertising campaign. Although useful, the click-through rate does not take into account activity which occurs offline, such as data pertaining to transactions and/or consumer behavior that take place in an offline store. A targeted audience for an online advertising campaign which is developed solely utilizing the click-through rate is therefore limited to consumers and consumer activity that occurs online.

Another way of assessing the effectiveness of an online advertising campaign is to target a high conversion rate. However, conversion is often a delayed response compared to click-through rates, and it is typically difficult to learn from the same campaign as conversion occurs at a later part of the campaign. This is particularly true for conversion that takes place in an offline store. In some instances, the online advertising campaign is over before products are purchased and conversion can be properly assessed.

The present disclosure is aimed at solving the problems identified above.

SUMMARY

A system for building a target audience for a present online advertising campaign comprises a database for storing data for each of the plurality of products with each product associated with a previous online advertising campaign and a processor in selective communication with the database and configured to execute computer-readable instructions causing the processor to: utilize the data to identify at least one previous online advertising campaign as being similar to the present online advertising campaign; learn from the identified at least one previous online advertising campaign to predict a probability of conversion of each of a plurality of consumers when exposed to an impression of the present online advertising campaign; and build the targeted audience for the present online advertising campaign based on the predicted probability of conversion.

A method for building a targeted audience for a present online advertising campaign with one or more steps of the method being performed utilizing a processor. The method comprises the steps of obtaining product data related to each of a plurality of products with each product associated with a previous online advertising campaign; building a database including the data for each of the plurality of products; utilizing the data to identify at least one previous online advertising campaign as being similar to the present online advertising campaign; learning from the identified at least one previous online advertising campaign to predict a probability of conversion of each of a plurality of consumers when exposed to the present online advertising campaign; and building the targeted audience for the present online advertising campaign based on the predicted probability of conversion.

DETAILED DESCRIPTION

Any combination of one or more computer-usable or computer-readable media (or medium) may be utilized. For example, a computer-readable media may include one or more of a portable computer diskette, a hard disk, a random access memory (RAM) device, a read-only memory (ROM) device, an erasable programmable read-only memory (EPROM or Flash memory) device, a portable compact disc read-only memory (CDROM), an optical storage device, and a magnetic storage device. Computer program code for carrying out operations of the present invention may be written in any combination of one or more programming languages.

Several (or different) elements discussed below, and/or claimed, are described as being “coupled”, “in communication with” or “configured to be in communication with”. This terminology is intended to be non-limiting, and where appropriate, be interpreted to include without limitation, wired and wireless communication using any one or a plurality of suitable protocols, as well as communication methods that are constantly maintained, are made on a periodic basis, and/or made or initiated on an as needed basis.

The present disclosure particularly describes how to build a targeted audience for an online advertising campaign utilizing advertisement impression data related to previous online advertising campaign(s) and product conversion data obtained from online and/or offline sources. Particularly, the present disclosure describes how a system learns from advertisement impression data related to previous online advertising campaign(s) and/or product conversion data from online and offline sources to build a behaviorally targeted audience which is expected to convert at a high rate after being exposed to an impression of an online advertising campaign.

With reference to the figures and in operation, the present disclosure provides a system10and a method for building a targeted audience for an online advertising campaign.

An example of a system10which is usable for building a targeted audience for an online advertising campaign is shown inFIG. 1. The system10includes at least one server12with a processor14and a memory16operatively associated with the server(s)12. The processor14may be a controller, a microcontroller, a microprocessor, an application specific integrated circuit (ASIC), or a processor working in conjunction with a central processing unit (CPU) performing the function of a general purpose computer. The processor14is configured to execute computer programs containing computer-readable and executable instructions for performing one or more steps of the method for building a targeted audience of a present online advertising campaign. In an example, the processor14is configured to execute a computer program containing computer-readable and executable instructions for performing all of the steps of a method for building a targeted audience for a present online advertising campaign. The memory16may include a read only memory (ROM) and random access memory (RAM) for storing the computer-readable instructions for performing the step(s) of the method.

The system10further includes one or more communication network(s)18that enable communication between the various computing devices of the system10. The communication network(s)18may be used to establish any wired and/or wireless connection. Non-limiting examples of communication network(s)18include the Internet, a file transfer protocol (FTP), an Intranet, a local area network (LAN), a virtual private network (VPN), a cellular network, and a wide area network (WAN). The various communication networks18may be used alone or in conjunction with one another.

In an example, the communication network(s)18enables communication between the server(s)12and a user device20. The user device20may be any suitable device that enables a user (such as a potential consumer) to access and communicate with the system10including sending and/or receiving data from the system10and displaying data received from the system10to the user. Non-limiting examples of user devices20include a laptop or notebook computer, a desktop computer, a tablet computer, a personal data assistant (PDA), an Internet-enabled mobile telephone (such as a smartphone), a hand-held mobile device such as a cellular phone, and/or the like.

The communication network(s)18also enables communication between the server(s)12and one or more advertising providers22. The advertising providers22generally assist with implementing advertising campaigns using various forms of advertising media. Non-limiting examples of advertising media include advertising displays (e.g., signs, billboards, banners, etc.), online advertising media (e.g., web banners), radio advertising, television advertising, video game advertising, print advertising (e.g., advertisements printed in magazines, newspapers, etc.), short message service (SMS) advertising messages, electronic mail (email) advertising messages, etc. For online advertising campaigns, the advertising providers22assist with implementing the online advertising campaign using online advertising media.

The communication network(s)18also enables communication between the server(s)12and one or more online and/or offline sources. In an example, the offline source is an offline store24, and the communication network(s)18enable communication between the server(s)12and one or more computing devices23of the offline store24. The offline store24may include a physical location where products are kept for sale. Non-limiting examples of offline stores24include a retailer store, a restaurant, a gas station, a beauty salon, a fitness center, a grocery store, a convenience store, and/or the like. Typically, transactions occurring in an offline store involve the user physically visiting the store and purchasing one or more products from the store at that time. In some instances, the offline store(s)24has no online presence and/or is not integrated with a specified networked purchasing service. In another example, the online source is an online store16, and the communication network(s)18enable communication between the server(s)12and one or more computing devices25of the online store26. The online store(s)26may include any store that has an online presence, where users can purchase products online, for example, through a webpage associated with the online store26. In yet another example, the online source is the user device20, and the communication network(s)18enable communication between the server(s)12and the user device20.

The server(s)12typically establish a connection with the network(s)18for purposes of obtaining data from the user device20, the computing device(s)23of the offline store24, and/or the computing device(s)25of the online store26. The data obtained from the user device20, the computing device(s)23of the offline store24, and/or the computing device(s)25of the online store26may be related to products associated with one or more advertising campaigns and/or related to the advertising campaigns themselves. For example, the data may include online and/or offline product transaction data and/or data relating to consumer behavior(s) associated with various advertising campaigns. The transaction data may include specific elements of a transaction, such as price changes, sales orders, financial transactions, revenues, conversion rates, impression data, profits, and/or other transaction data associated with one or more products of the various advertising campaigns. Data related to consumer behavior associated with online and/or offline product transactions may be obtained, for example, from store receipts, credit card purchases, mail-order requests, information inquiries, browsers, cookies, and/or other sources related to customer preferences or predisposition to purchasing and/or using a particular product. The transaction data and/or the data related to consumer behavior further includes or may be used to obtain advertisement impression data and product conversion data, both of which may be used during a learning step of the method described in detail below.

As shown inFIG. 1, the system10further includes a database28coupled to the server(s)12. The database28is configured to store the data, such as the advertisement impression data and product conversion data. In an example, the data may be obtained from the user device20, the computing device(s)23of the offline stores24, and/or the computing device(s)25of the online stores26by the server(s)12, and the data may be stored in the database28.

Examples of the method for building a targeted audience for a present online advertising campaign is described below with reference toFIGS. 2 and 3. As shown inFIG. 2, the method generally includes obtaining data related to each of a plurality of products with each product associated with a previous online advertising campaign (as shown in method step202), building a database including the data for each of the plurality of products (as shown in method step204), utilizing the data to identify at least one of the previous online advertising campaigns as being similar to the present online advertising campaign (as shown in method step206), learning from the identified at least one previous online advertising campaign to predict a probability of conversion of a product associated with the present online advertising campaign (as shown in method step208), and building the targeted audience for the present online advertising campaign based on the probability of conversion (as shown in method step210).

A specific example of the method is described below with reference toFIG. 3. It is to be understood that the method described below with reference toFIG. 3includes a plurality of steps, which may be performed independently of, or in combination with other steps of the method. Furthermore, the steps of the method may be performed by one or a combination of components of the system10.

As shown inFIG. 3, the method includes obtaining product data related to each of a plurality of products with each product associated with a previous online advertising campaign (as shown in method step302). In an example, utilizing the communication network(s)18, the server(s)12are configured to communicate with the online and/or offline sources, such as the user device20, the computing device(s)23of the offline store(s)24, and/or the computing device(s)25of the online store(s)26. During this communication, the server(s)12are configured to obtain data directly from the user device20, the computing device(s)23of the offline store(s)24, and/or the computing device(s)25of the online store(s)26. For example, during the communication, the server(s)12can monitor the online activity of the user device20, the computing device(s)23of the offline store(s)24, and/or the computing device(s)25of the online store(s)26. The server(s) may be configured to continuously monitor the devices20,23,25, or may be configured to periodically monitor the devices20,23,25. In instances where the server(s)12is configured to periodically monitor the devices20,23,25, the server(s)12may check the online activity of the devices20,23,25after each of a plurality of time intervals, such as every 5 minutes, every 30 minutes, every 1 hour, every 12 hours, etc. Alternatively, the server(s)12may periodically monitor the devices20,23,25by checking the online activity of the devices20,23,25in response to a trigger. For example, the server(s)12may be triggered to check the online activity of the devices20,23,25upon detecting or receiving a signal that one or more of the device(s)20,23,25has logged onto a particular website and/or accessed a particular retailer online such as by instant messaging, emailing the retailer, and/or the like. Alternatively, during the communication, the server(s)12can request data from the user device20, the offline store24, and/or the online store26. The server(s)12can obtain a transmission of the data from one or more of the devices20,23,25to the server(s)12in response to the request.

In some instances, the data may not be readily available from an offline source. For example, the computing device(s)25of the offline store(s)26may not be connected or be able to connect through the communication network(s)18, or the offline store(s)26does not have a computing device. The server(s)12may obtain the data by submitting a request to the offline store26, for example, during a telephone call to the offline store(s)26. The offline store(s)26may provide the requested data during the telephone call, and the data may be recorded as a voice recording and transcribed into text before being stored in the database28. The offline store(s)26may alternatively provide the requested data in an email, an SMS message, a letter sent via postal mail, and/or the like.

The data obtained from the devices20,23,25may be utilized, by the processor14executing a computer program, to identify products and associated previous online advertising campaigns. The identified products and associated previous online advertising campaigns may be stored in the database28.

Referring toFIG. 3, the method further includes building the database28including the data (as shown in step304). In an example, the method step of building the database28comprises building a first dataset including category-brand pairs for each of the plurality of products stored in the database28. This may be accomplished by identifying a category and a brand for each of the plurality of products, and combining the category and brand for each product to form a category-brand pair for each product (as shown in step306). For example, the category-brand pair for an iPad® would be tablets-Apple Inc., the category-brand pair for Vitaminwater® would be sports drinks-Glacéau, the category-brand pair for Pledge® would be furniture polish-S.C. Johnson & Son Co., etc.

Once a category-brand pair has been identified for each of the plurality of products, the method further includes tagging the previous online advertising campaigns with the category-brand pair identified for the respective products (i.e., the product associated with that previous online advertising campaign) (as shown in step308). Typically, each previous online advertising campaign is associated with at least one product. Said differently, typically, each previous online advertising campaign advertised at least one product. Accordingly, at least one product may be associated with one particular previous online advertising campaign. In instances where one product is associated with a particular previous online advertising campaign, that particular online advertising campaign is tagged with one category-brand pair (i.e., the category-brand pair of the one product). In instances where multiple products (e.g., two or more products) are associated with a particular online advertising campaign, that particular online advertising campaign is tagged with multiple category-brand pairs (i.e., the category-brand pair of the first product, the category-brand pair of the second product, etc.).

In an example, the method step of building the database28may further comprise building a second dataset containing data related to consumer behavior. For example, for each consumer who was exposed to an impression of an online advertising campaign, data may be stored in the database28as part of the second dataset where such data indicates that the consumer did or did not buy a product relevant to that online advertising campaign after seeing the impression within a predetermined time period. In an example, the predetermined time period may be the time period during which the online advertising campaign ran. In another example, the predetermined time period may be the time period during which the online advertising campaign ran and an amount of time (such as 5 days, 1 week, 2 weeks, etc.) after the online advertising campaign ended.

The second dataset may also include data indicating that a consumer purchased a product associated with a previous online advertising campaign after being exposed to an impression of the online advertising campaign, and data indicating that the purchase was made from an online store or an offline store. In instances where the consumer purchased the product associated with the online advertising campaign from an online store26(such as, e.g., from Walmart.com), the data may be stored in the database28as part of the second dataset signifying that the consumer purchased the product from the online store26. In instances where the consumer purchased the product associated with the online advertising campaign from an offline store24(such as, e.g., a Walmart store), the data may be stored in the database28as part of the second dataset signifying that the consumer purchased the product from the offline store24. In an example, sales revenue associated with the purchased product may also be stored in the database28as part of the second dataset.

The method further includes forming a category-brand pair for the product associated with the present online advertising campaign. This may be accomplished by identifying a category and a brand for the product associated with the present online advertising campaign, and combining the category and brand for the product to form a category-brand pair for the product (as shown in step310). Once a category-brand pair has been identified for the product of the present online advertising campaign, the method includes tagging the present online advertising campaign with the category-brand pair identified for the product of the present online advertising campaign (as shown in step312).

As previously mentioned, the method of the present disclosure may be used for building a targeted audience for a present online advertising campaign. A high conversion rate is expected after users or potential consumers, who are members of the targeted audience, have been exposed to an impression of the present online advertising campaign. It is to be understood that the conversion rate depends, at least in part, on the type of product(s) being advertised and the duration of the adverting campaign which advertised the product(s). Typically, a high conversion rate is a higher than average conversion rate achieved by other methods of building a targeted audience for the same advertising campaign. For example, if other methods of building a targeted audience for an advertising campaign which advertises Product X is calculated to be 0.1%, then a high conversion rate is considered to be any percentage that is greater than 0.1%.

In an example, a targeted audience may be built by identifying previous online advertising campaigns that are similar to the present online advertising campaign, and utilizing advertisement impression data and product conversion data obtained from online and/or offline sources to predict a probability of conversion of the product associated with the present online advertising campaign. The probability of conversion is a quantitative measure of the chance that a user or consumer will convert (i.e., purchase the product associated with the present online advertising campaign) online or offline within a predetermined time period (e.g., 1 week, 2 weeks, 1 month, etc.) after being exposed to an advertisement of the present online advertising campaign. Said differently, the probability of conversion is a measure of the propensity of a user or consumer to buy a product advertised within a predetermined time period after being exposed to an impression of the online advertising campaign. The probability of conversion is typically a number from 0 to 1. The targeted audience for the present online advertising campaign may then be built having a particular size (e.g., a particular number of audience members) having the highest probability of conversion. It is to be understood that the size of the targeted audience may be adjusted according to need such as, for example, the number of impressions needed to be delivered to the targeted audience within a particular time period.

Referring again toFIG. 3, the method includes comparing the category-brand pair tagged to the previous online advertising campaigns with the category-brand pair tagged to the present online advertising campaign (as shown in step314). The method involves determining if there are any matches, i.e., determining if any of the previous online advertising campaigns is/are tagged with a category-brand pair that is common with the category-brand pair of the present online advertising campaign. This step is shown in method step316. In instances where there are no matches (i.e., there are no previous online advertising campaigns tagged with a common category-brand pair as the present online advertising campaign), then a targeted audience cannot be built for the present online advertising campaign (as shown in step318). However, in instances where there is at least one match (i.e., there is at least one previous online campaign tagged with a common category-brand pair as the present online advertising campaign), then the previous online advertising campaign(s) is considered to be similar to the present online advertising campaign.

Once the previous online advertising campaign(s) has been identified as being similar to the present online advertising campaign, the method includes determining if there are more than one previous online advertising campaign that has been identified as being similar to the present online advertising campaign (as shown in step320). In instances where there is one previous online advertising campaign(s) that has been identified as being similar to the present online advertising campaign, the method includes determining the targeted audience for the present online advertising campaign using the one previous online advertising campaign that is similar to the present online advertising campaign (as shown in step322). Details of the method step of building the targeted audience for the present online advertising campaign using the one previous online advertising campaign are described below.

In an example, the method includes learning from the previous online advertising campaign that is similar to the present online advertising campaign to predict a probability of conversion of a consumer when exposed to an impression of the present online advertising campaign. A targeted audience for the present online advertising campaign may be built based on the predicted probability of conversion for each of a plurality of consumers. For example, advertisement impression data related to the previous online advertising campaign and product conversion data related to the product associated with the previous online advertising campaign may be utilized in a L1-regularized logistic regression model to predict the probability of conversion of each consumer when exposed to an impression of the present online advertising campaign. In general, L1-regularized logistic regression is a standard technique for modeling and predicting binary responses based on information about a set of regressor variables. The L1-regularized logistic regression model may be defined by Equation (1):

p⁡(y=1❘X;θ)=11+exp⁡(-θT·X)′Equation⁢⁢(1)
where y is the response variable, X is a vector of regressor variables, θ is the vector of regression coefficients, and p(y=1|X; θ) denotes the probability that y=1 given the regressor variables X and regression coefficient vector θ. T is the transpose of the vector of the regression coefficients θ. Since there are an M number of data points, L1-regularized logistic regression attempts to maximize a regularized likelihood function defined by Equation (2):

maxθ⁢∑i=1M⁢log⁡(p⁡(y=yⅈ❘Xⅈ;θ))-λ⁢θ1Equation⁢⁢(2)
where λ is the Lagrange multiplier and is greater than 0, yiis the i-th response variable and Xiis the regressor variable values corresponding to the i-th response.

Since one previous online advertising campaign was identified in the current example as being similar to the present online advertising campaign, the data related to the previous online advertising campaign may be divided up into three parts—a first part which is used for training purposes, a second part which is used for validation purposes, and a third part which is used for testing purposes. The first part is referred to as the training group, and is used to estimate the regressor coefficients, θ, for different values of λ. More particularly, the value of θ may be determined by maximizing Equation (2) for certain choices of λ, where Equation (2) is utilized multiple times for various choices of λ to determine the corresponding values of θ.

The second part of the data related to the one previous online advertising campaign is referred to as the validation group. More particularly, the validation group is utilized to determine which choice of λ (and corresponding value of θ) should be used for predicting the probability of conversion of the consumer when exposed to an impression of the present online advertising campaign. As described above, during training, corresponding values of θ were determined for each λ tested. During validation, the probability of conversion may be predicted for each choice of λ using the L1-regularized logistic regression model (i.e., Equation (1)) above.

Additionally, for the L1-regularized regression model, the regressor variables (or regressors), X, may be obtained utilizing the data stored in the database28, particularly previous online and offline purchases, previous online browses, and/or reactions to previous online advertising campaigns which ran within a predetermined time period (e.g., 6 months, 1 year, 2 years, etc.). For previous online purchases, categories and subcategories of products purchased by consumers within a particular time frame (e.g., within 2 months, 3 months, etc.) before the previous online advertising campaign started are stored in the database28as category-subcategory pairs. Further, each category-subcategory pair corresponds with a particular regressor variable, X. In an example, if a consumer purchased a product offline that falls within a particular category-subcategory pair within the particular time frame prior to when the previous online advertising campaign started, then the regressor variable, X, is given a value of 1. In instances where no purchases were made for a product that falls within the particular category-subcategory pair within the particular time frame prior to when the previous online advertising campaign started, then the regressor variable, X, is given a value of 0. It is to be understood that the regressor variables may also be built for each category-subcategory pair for all online purchases and browses. Also, 3 months prior to the start of the online advertising campaign is the time frame typically considered for online purchases, while 30 to 40 days prior to the start of the online advertising campaign is the time frame typically considered for online browses.

Reactions to previous online advertising campaigns for the same brand as the product of the present online advertising campaign may also be used when building regressor variables. For previous online advertising campaigns tagged with the same brand as the present online advertising campaign, if a consumer was exposed to an impression and purchased a relevant product within the campaign period or two weeks after the campaign ended, then the regressor value representing the reaction is given a value of +1. Alternatively, for previous online advertising campaigns tagged with the same brand as the present online advertising campaign, if a consumer was exposed to an impression and did not purchase a relevant product within the campaign period or two weeks after the campaign ended, then the regressor value representing the reaction is given a value of −1. For each category, the reactions from the previous online advertising campaigns tagged to that category are summed up. It is to be understood that since the previous online advertising campaigns being considered are for the same brand of product, the online advertising campaigns with matching categories will also be tagged to the same category-brand pair. Accordingly, for previous online advertising campaign reactions, each category corresponds to a variable (e.g., +1) if there are previous online advertising campaigns of the same brand in that category, otherwise the variable is assumed to have a value of 0.

Utilizing the regressor variables, X, described above, the predicted probability of conversion for each choice of λ is then compared to a plurality of preset threshold conversion values (e.g., a 35% conversion, a 50% conversion, a 62% conversion, etc.). In instances where the predicted probability of conversion is greater than a particular threshold value, the consumer response is predicted to have a value of +1 indicating that the consumers of the validation group are likely to convert. In instances where the predicted probability of conversion is less than the particular threshold value, the consumer response is predicted to have a value of −1 indicating that the consumers of the validation group are not likely to convert. A prediction error is determined for various threshold conversion values for each choice of λ. For example, with the value of λ fixed, the prediction error may be determined for each threshold conversion value. The value of λ which achieves the lowest overall prediction error is used for predicting the probability of conversion. Furthermore, the value of θ which corresponds to the selected value of λ, as well as the regressor variables, X, described above are used for predicting the probability of conversion of a consumer when exposed to an impression of the present online advertising campaign.

Once the value of λ and its corresponding value of θ have been selected for each consumer, utilizing the testing group, the method includes testing the selected value of λ to confirm that the selected value of λ can be used to objectively predict the probability of conversion of a consumer. This may be accomplished by determining the prediction error as described above except by keeping the value of θ constant.

Utilizing the selected value of λ, its corresponding value of θ, and the regressor variables, X (computed based on the latest purchase, browse, and advertisement reaction data as described above), the method involves predicting the probability of conversion of a consumer when exposed to an impression of the present online advertising campaign utilizing Equation (1) above. For example, the probability of conversion utilizing the selected value of λ and the corresponding θ obtained during training and validation (and confirmed during testing) and the regressor variables, X, may be predicted utilizing the L1-regularized logistic regression model described above.

Once the probability of predicting the conversion has been computed, the method involves building a targeted audience of a particular size for the present online advertising campaign based on the predicted probability of conversion for each of a plurality of consumers when exposed to an impression of the present online advertising campaign. In an example, the targeted audience includes the consumers having a predicted probability of conversion that is the highest.

Referring back to method step320inFIG. 3, if it is determined that there is more than one previous online advertising campaign that is similar to the present online advertising campaign, then the method includes utilizing the two most recent previous online advertising campaigns for building the targeted audience for the present online advertising campaign. In an example, the method includes determining which two of the more than one previous online advertising campaign are the most recent. Of the two most recent previous online advertising campaigns, the more recent campaign of the two may be used for validation and testing purposes, while the remaining previous online advertising campaign may be used for training purposes. In an example, from the most recent previous online advertising campaign, 25% of the responses are randomly selected and used as a test group and another 25% of the responses are randomly selected and used as a validation group. Further, all of the responses (i.e., 100% of the responses) of the remaining previous online advertising campaign may be used as the training group. The method further includes building the targeted audience of the present online advertising campaign using the two most recent previous online advertising campaigns (as shown in step324).

It is to be understood that when building the targeted audience by predicting conversion by training the L1-regularized logistic regression model, the following assumptions may be made. First, the data being trained utilizing the model covers a subset of the entire consumer population. Although the subset is not representative of the entire consumer population, it is assumed that the trained L1-regularized logistic regression model produces a valid result which is applicable to the entire consumer population. Second, although the method involves training the model to determine a conversion rate of a previous similar campaign, learning from the previous similar campaign produces valid results for the present online advertising campaign.

The following example is provided for purposes of illustrating the training, validation, testing, and predicting steps utilized when building the targeted audience for the present online advertising campaign. Assuming that the present online advertising campaign is for Hallmark® greeting cards, the targeted audience may be built as follows. The product(s) relevant to the campaign are identified (e.g., particular greeting cards), and a category and a brand are identified for the product(s). For example, “greeting cards” would be the category and “Hallmark” would be the brand for these product(s). The database28may be searched to locate previous online advertising campaigns tagged with the category-brand pair “greeting cards—Hallmark®”. If a previous online advertising campaign cannot be found, then a targeted audience for the present campaign cannot be built. However, if a previous online advertising campaign is found, then consumer responses from that previous online advertising campaign (which are stored in the database28) is divided to form training, validation, and testing groups. A targeted audience for the present online advertising campaign may be built in this example by training, validating, and testing is performed as described above to obtain a value of θ. Once the value of θ obtained, the method of predicting the probability of conversion for all consumers is accomplished utilizing Equation (1) above with regressor variables, X, constructed from the latest purchase, browse data, etc. Then, a targeted audience of a fixed or particular size is chosen from the entire consumer population and includes consumers having a predicted probability of conversion which is the highest.