A Brief History of Math

Perspectives for the ad tech market

June 26, 2012By: Sunil Sharma

Most advanced math, including the “Pythagorean” Theorem, seems to have originated in India at least 6,000 years

ago

By 500 B.C., Pythagoras and his friends regularly cruised the Mediterranean on ancient party boats

Seriously…but they were much more than that…

They believed two central things about God

1. That God exists, and:

2. That God would never create “irrational” numbers (fractions)

The Pythagoreans, led by Pythagoras, were a fanatical religious cult that practiced mathematics and took lots of cruises

…. And what was his reward?

Until one day, when a Pythagorean named Hippasus proved that irrational numbers exist (while aboard a party boat)

They murdered him by throwing him overboard

*This photo is a reenactment

This incident teaches us two key lessons about human nature

1. Nobody likes a “know-it-all”

2. Ego; the defense of our viewpoints can close our minds to the truth, to innovation

Similarly, Vilfredo Parto fell victim to a classic cognitive fallacy when he proposed the “80/20 rule” to describe wealth distribution

1906: Pareto Principle shows 20% of people have 80% of wealth in all nations; accepted as a rule

1

Faulty reasoning: Only European nations studied; all had similar conditions2

As conditions changed globally, the 80/20 “rule” did not hold up and was debunked3

The 80/20 “rule” is a classic case of going by what the data “tells” us

Data tells us nothing… We infer from it… sometimes correctly

….In ad tech, 20% of companies are innovating, and the remaining 80% want to throw them overboard

“I have the best algorithm, and the best managed service, and the best

technology, and the shiniest objects, and the biggest ego…

For example, only a very tiny fraction of data is actually being leveraged to provide scalable performance to advertisers

Often less than 1% actually used; creates risks for market participants

Company type Risks Mitigation tactics

Buyers and sellers:•Advertisers •Publishers

• Wasted proprietary data• Commoditized optimization• Lack of scale

•Active engagement, not “set it and forget it”• Compel innovation into the supply chain

Intermediaries: •Agencies•DSPs•Networks•Optimization companies

• Commoditization• “Leapfrogging” of market leaders

• Avoid the “we can build everything” mentality• Management can make decisions too

No one company can do it all “the best,” and collaboration is necessary to provide maximum value to advertisers

Don’t be this guy

Be a lion… attack the innovation challenge