Algorithm
The automated decision-making system platforms use to determine which ads to show to which users and at what price.
What Algorithm means
In advertising, algorithms are the machine learning and rule-based systems that power ad delivery, auction mechanics, content moderation, and policy enforcement. Platform algorithms determine ad relevance scores, bidding outcomes, placement selection, and audience matching. From a compliance perspective, algorithmic transparency has become a major regulatory focus — the EU's Digital Services Act requires platforms to explain algorithmic decision-making, and the AI Act adds requirements for high-risk AI systems used in advertising. Understanding how algorithms evaluate and serve ads helps advertisers optimize within compliance boundaries and anticipate how policy changes may affect delivery.
Related terms
Ad Auction
The real-time bidding process where platforms determine which ad to show to a specific user based on bid, quality, and relevance.
Relevance Score
A platform-assigned quality metric that rates how well an ad resonates with its target audience, affecting delivery and costs.
Machine Learning
AI-powered systems used by ad platforms for automated ad delivery optimization, content moderation, and policy enforcement.
Digital Services Act
An EU regulation imposing transparency, content moderation, and advertising rules on online platforms and search engines.