Presenter: Tess Nesbitt, Senior Statistician, UpStream Software
Presentation Date: February 26, 2013
This presentation describes how Hadoop and Revolution R Enterprise provide the predictive analytics models for UpStream's revenue attribution application.
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The Impact of Big Data On Marketing Analytics (UpStream Software)
1. The Impact of Big Data on Marketing Analytics
FEBRUARY 2013
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2. Who we are
Company Overview
Experienced team with a proven history of solving difficult analytics
problems for Fortune 500 companies
Cloud-based software to manage marketing’s big data problems:
customer level revenue attribution and multi-channel optimization, triggered
marketing, and planning and reporting
Locations San Francisco, Seattle, and Hyderabad
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3. Marketing Analytics Goals
Identify the most profitable Target the right customers Understand what the spend
channels for every customer at the right time with the right in each marketing
and the most profitable message. channel contributes to sales.
customers for every channel.
“Advanced Revenue Attribution”
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4. Challenges with Multi-Channel Retail
Multi-channel marketers are unsure where to spend their next dollar.
Messy data with many Don’t understand how spending No easy way to identify the
marketing and order channels, on marketing affects conversion most profitable channels for every
disparate databases, various customer
execution platforms
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5. How do you approach the problem?
Enable retailers to conduct customer-level analysis on
big data to understand what motivates individuals to buy.
Assemble and standardize Apply the rigor of a medical Identify and attribute Know whom
all of a marketer’s data into researcher with patented the revenue drivers to reach
a Hadoop cluster methodology
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6. Advanced Revenue Attribution
What is it?
Data-driven time-to-event statistical modeling used to establish an objective and accurate revenue distribution, all
done at the individual user level
What are Common Attribution Buckets?
“Big Data” platform that handles and connects all of a company’s online and offline data (sales, web
analytics logs, catalog and email send data, display and search advertising logs, etc.)
Augment marketing campaign data with supplementary information to correctly distribute variance across
all contributing factors (i.e. Customer Driven (Store Location, Seasonal Factors), Special Cased (Branded
Search, Economic Conditions)
How is it different?
Modeling is done at the customer level
– facilitates both the micro and macro level analyses in tandem for the most comprehensive insights that a marketer can
extract
– empowers marketers to customize their strategies at this very same granular level
Focus on modeling time effectively enables the targeting of specific customers with specific treatments at
specific times
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10. Architecture: Hadoop – Revolution Integration
Current State: Revo v6
• Functions to read Hadoop output;
xdf creation CUSTOM VARIABLES
UPSTREAM DATA
FORMAT (UDF) • Exploratory data analysis (PMML)
• GAM survival models
• ETL • Scoring for inference
• N marketing channels • Scoring for prediction
• Behavioral variables
• 5 billion scores per day
• Promotional data per customer
• Overlay data
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11. Why Revolution R?
We used to prep data and build models with SAS / WPS
Current Hardware: Linux CentOS 6
We switched to Revolution R for the following reasons:
Cost effective
Comprehensive and easy-to-use statistical packages (especially familiar for people coming from academia)
Scale & Performance (increase 4x with Revo Scale R)
• (RevoScaleR) rxLogit on 36MM rows and 30 variables (full input data is 68MB) data runs in under 4
minutes
• Descriptive and modeling functions operate on compressed xdf files to preserve disk space
Beautiful graphics with high degree of user control
Open source environment enables the best and brightest in both academia and industry to contribute R
packages every day; unlimited growth potential
Ongoing Revo support – extremely receptive team to work with
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12. Case Study: Top Multi-Channel Retailer
180%
Attribution
160%
Impact Direct Load
Presented results that were contrary to 140%
company’s expectation; client validated Other
results internally 120%
Search
Within 3 months, reallocated $5MM
100%
marketing budget to another channel Display Remarketing
with more changes to follow
80%
Customer
Driven/Trade Area
Insights 60% Catalog
Marketing is responsible for ~50% of overall
40% Other
sales (offline and online). The other half
Search
account for the customer’s buying habit and
20% Display Remarketing
store trade area. Email Catalog
Email
Ecommerce significantly more influenced by 0%
marketing than retail or call-center channels Before After
Direct Load: UpStream credits marketing
activities that drove user “navigation” to
website.
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13. Case Study: Top Multi-Channel Retailer
Optimization
Impact
Already field tested head-to-head against industry leading model
+14% lift in response rate
+$270K in new revenue in a single campaign
Reallocated marketing circulation: identified best prospects to not mail that were likely to
purchase without receiving catalog
Scored 22MM households with 9 models all in the cloud
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14. Summary
The World is Changing:
The way customers are purchasing services is changing
Managing marketing budgets in the multi-channel world is challenging
Understanding attribution is critical to successfully deploy your marketing budget
To Be Successful, Your Attribution Solution Should:
Cover all of your data
Both online and offline
Be statistically relevant
Guess work doesn’t count
Scalable and flexible
Make sure you have the right technology platform and tools
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16. Example Findings
Google keywords often perform worse than you think
In many cases 20-40% worse
Display Advertising performs better than you think
Certain types of display, such as retargeting, performs better than you think and can have strong influence
especially at retail stores, which most attribution tools fail to pick up
Custom loyalty has the most impact at the retail store
Often retail sales are due to habit and loyalty, but the same trend doesn’t hold online
Retail sales are influenced by the presence of a store near home
Unfortunately the inverse is also true, web purchases are not typically driven by having a store nearby
Seasonal is much stronger at Internet than Retail or Call Center
The impact of season purchasing is almost double that of retail
Tenure of customers show significant differences
Newer customers are more sensitive to marketing, seasonal factors, and store area than established
customers (based on tenure).
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Notas do Editor
Tess Nesbitt, Statistician and Senior Consultant at Upstream / Business Researchers
We are a team of number crunchers, backgrounds in econ, math, statistics, physics, astrophysics, business…. the whole gamut of scientific and technical disciplines Started as BRI, a consulting company but have developed another aspect of the company called Upstream, which has been going for about 2 years where we focus primarily of working on big data problems for marketing revolving bullet 2
We hear multi-channel word used a lot in retail, but it is pretty an ambiguous word. We have 2 definitions of channel:Those on the left hand side are where you spend marketing budget, those on the right hand side are purchases are made---we separate these two out so we can see crossings (how much is email driving to store sales, how much is direct mail driving to online sales?)
This is an observational data problem---we read in a lot of data: every impression served, every click to the website, every email delivered clicked on every catalog every postcard and all the order data from every channel as well--we look at entire gamut of marketing how you reach customersWe tie this data together and later model it--we borrow techniques from biostatistics and medical research and apply them to this data (outcome instead of die is buy)-once we understand what drives conversion, we can use that to split up orders into channels that drove itwhen you undestandwhat drives sales, you can decide what marketing to buy next--So what we are doing is assigning credit of sales to various types of marketing you are conducting.--when we figure out what drives sales , then we want to move to figuring out how to redirect budget (Targeting)--Strategi Allocation c use this info it to make better decisions about how and when to market to customers--Incremental Response: can see how receptive people are to various types of marketing (reallocate catalog to customers who are most moved by certain treatments))
we want to understand co-occurrence of marketing phenomena-most of these survival analysis techniques are for small data, but we apply it to huge data-time-dependent outcome-majority of our inputs are time-dependent covariates-competing risks: survival framework is designed to handle competing risks ------you are exposing people to a cocktail of drugs, and we want to know if was it the aspirin that killed you?
Assume we already built a model, what can we do with it?Recency table is in days, sales is in dollars1)Retrospectively - 2 months email is well below the fold, you arent clicking on it (effect has decayed down to nearly zero) agaon so catalog gets credit email gets more credit in second case--we take into account the amplitude of the effect and timing
This distribution is what we are up against, what we are trying to modelhighly nonlinearpart of our methodology is to put terms in the model that control for a distribution like this, so we control for this while overlaying marketing treatments
we treat upsteam as scoring systemsame scoring system makes data for modelingin Hadoop, we do all the ETL--handle lots of data and files, we create behvioralvariabeles, time between purchases, number of purchases, promotional schedule, etc.Overlay data-demographic datawe push the data out in a cleansed way for survival modeling we use RevoRfor explorating work and modelingwhen these are finished, they are pushed back to Hadoop for scoringscoring for prediction (lift charts, use model for selection,etc.)creating 5 billion scores per day per retailer
Retails was double counting their sale s(over 100%)--savvy marketers want ot know this incremental effect--these percentages might not be smae if we only look at web sales, or only retails, etc...in this example we have combined all order hcnnales--this is 1 year of data and it is retrospective--could we use this info going forward?