Business and Marketing / Economics Essay

What is an algorithm, and how does it work?

It is through several exchanges with marketing professionals, with social media managers as well as students, among the interventions that you can notice that the term and the notion related to algorithms were not always understood or understood.

In the era of Big Data, Machine Learning, and artificial intelligence, algorithms have become ubiquitous in our lives. But what exactly is an algorithm? Discover the definition of the term, its use cases, and some examples of the most famous and massively used algorithms.

The term algorithm was coined by the mathematician Mohammed Ibn Musa-Al Khwarizmi, in the course of the ninth century BC. With the rise of artificial intelligence, this term is used more and more and has joined the category of "buzzwords".

Today, algorithms are used to find love, to invest in the best stocks, to predict crime, to organize search results on the web, and for millions of other applications. Algorithms are ubiquitous and rule our economy, our society, and maybe even the way we think. But what exactly is an algorithm?

What is an algorithm?

In the field of mathematics, where the term originates, an algorithm can be thought of as an ordered and finite set of operations that must be followed in order to solve a problem. As a very simple example, let's take a cooking recipe. In each recipe, a specific procedure must be followed in order. The different steps of the recipe represent the operations that make up the algorithm.

Where things get a bit complicated is that an algorithm aims to solve a problem and therefore produce a result. If we want to create an algorithm that can work in the real world, it is necessary to include instructions allowing it to adapt to the different situations with which it may be confronted. This is why algorithms are like gigantic "trees" of instructions.

To illustrate this definition, let's base ourselves on a well-known example with "the omnipresence of algorithms in the kitchen" with the cooking of pasta:

- Our problem: how to cook pasta?

- The desired result: perfect cooking of the pasta.

- The operating rules: fill a saucepan with water, turn on the hotplate, salt (or not) the water, bring it to a boil, lower the heat, put the pasta in the water, cook, drain pasta.

Well done, we have just developed our first pasta cooking algorithm by adding each of the rules mentioned just below! If that sounds simplistic (and it is), this is a great way to understand what an algorithm is. Without pulling your hair while looking for mathematical formulas that you wouldn't even understand.

An algorithm can be translated by a programming language into a program that can be executed by a computer.

This is where the notion of technology and more precisely of computing comes into play. If the development of an algorithm can be as simplistic as the cooking of pasta, to solve other problems, humans need machines to solve calculations very quickly while eliminating the risk of errors specific to the Man. It should be remembered that computers were developed precisely for this.

What are algorithms used for?

Algorithms have countless use cases. In technology and computing, when a developer creates a program, they are actually creating a set of algorithms. Indeed, a computer program is a set of commands given to the machine, written in a specific language, in order to perform a series of specific operations to obtain a result.

Knowing that a computer is (still) incapable of understanding human language, the programmer uses a programming language. This language serves as a bridge between human language and the language that the machine can understand. With this tool, the programmer can create a series of instructions that the computer can "understand".

Who uses the algorithms?

Now that we have defined this notion and after an illustration in the field of cooking, let's take a look at the companies and the fields using an algorithm as the heart of the system allowing them to function today as we know them. We think then of the financial markets where values ​​are bought and sold automatically by machines. In the field of health, there are more and more of them to develop new skills such as more precise detection of cancers. This is also the case in the service sector with companies that have developed web applications or tools.

Google: its algorithm has enabled the company to establish its supremacy on the search engine market, some of which (no longer existing today) shared the place like Yahoo, Ask, or even Lycos. We can quote “PageRank" from Google. This is a set of algorithms used by Google to determine the importance of documents indexed by its web search engine. So when you do a search on Google, this is one of the things that determine the order in which the results are displayed. PageRank is arguably the most widely used algorithm in the world.

Netflix: The popular American video-on-demand service also uses an algorithm to personalize the highlights of series and films according to each profile. It even goes so far as to customize the content illustration thumbnail.

Amazon: in its early days, the e-commerce giant was criticized, but, among other things, due to its algorithm to refine cross-selling, the company was able to retain and increase the number of average baskets.

Spotify: More than a simple audio library (like Apple's iTunes before Apple Music), the Swedish service has been able to conquer market share due to musical discoveries based on user tastes as well as emerging trends.

Tinder: Dating apps and services are no exception. Chance does not exist on Tinder. Their algorithm defines a score of "desirability" according to the photos, the centers of interest, and your rating according to the swipes to the left or to the right.

Facebook: It is often the most cited, because also the most "feared" by social media managers as well as the media, Facebook's EdgeRank algorithm aims to resolve a problem: how to capture as much time as possible on the platform from people. Users? And in view of the studies, its algorithm works very well.

Another example is the Facebook Timeline. This is because the content that Facebook displays on your news feed is chosen by a set of algorithms. They decide what content to display based on various parameters such as your personal taste, your reactions to previously featured content, and more.

Another example is high-frequency trading algorithms. These are the algorithms used by the world's most important financial institutions, in order to allow them to place orders in the market according to the profit they hope to obtain and according to the market conditions at a specific time. These algorithms today have more influence on the global economy than human operators and are responsible for circulating billions of dollars every day.

As the last example, let us evoke the Round Robin algorithm. This is an algorithm widely used in the field of computing since it allows computers to determine which tasks they should perform first. As a general rule, this algorithm determines the time that the processor will spend on each current task.

This list is not exhaustive, but they are known by the majority of individuals in Western countries. Among these, several are in the top 10 companies whose brands are valued at several billion dollars in the markets.

What impacts on information and what are the reasons?

Let us now come to the impacts on the information conveyed by algorithms as well as the marketing and commercial reasons for their development. First of all, algorithms are very often criticized for their indirect creation of what is called the "filter bubble.” This term, presented by Eli Parisier, an Internet activist, is criticizing the abuses and the use of cookies on sites and today's algorithms. The filter bubble is presented by Eli Parisier as the "Internet paradox." Indeed, the Internet is presented (and rightly so) as a tool for democratizing culture and knowledge to as many people as possible. This access is no longer linked to a territory. on the web. However, the filter bubble phenomenon partitions Internet users into a sphere where information is centered around their areas of interest, their network, or even their geolocation (and many other factors).

Finally, what are the reasons? Take the concrete and real example of the social network Facebook. The platform is intended to be a tool allowing any user to communicate with his network (friends, family, professional acquaintances) and to obtain information. Its algorithm aims, mentioned above, to capture as much time as possible on the platform from my users. The operating rules, that is to say, the criteria are taken into account in the calculation, allow users to have "relevant" posts. However, these two elements take time for the user. And as the saying goes: "time is money.” Facebook does not sell advertising space (via the different formats), but time to advertisers! The video, the carousel, or the events are only formats and products from its catalog. It should be remembered that Facebook, in 2017, generated more than $ 39 billion in revenue due to advertisingWhat is an algorithm, and how does it work?, making him the second-largest player in the market behind Google.

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