Each week, DataWorks defines a data-related term marketers need to know. Last week, we covered predictive analytics.
What is an algorithm?
An algorithm is a step-by-step set or rules or instructions necessary for performing a specific mathematical task or solving a particular mathematical problem. For instance, a retailer might use an algorithm to optimize product prices.
Kristopher Kubicki, chief architect of Dynamite Data, on algorithms:
An algorithm is a very general term to describe any kind of process or function. Typically, when computer science people talk about algorithms, they are describing a series of events the computer does to solve a problem. When a company like Dynamite Data builds a product for a customer, what we're really doing is building that method that can be used to answer an ongoing challenge again and again. This might be something very complicated and mathy -- like recommending the optimal price for a merchant. It could also be something a little more subjective, like recommending which products to promote based on gaps in a competitor's assortment.