13 research outputs found
Analysis of online advertisement performance using Markov chains
The measurement and performance analysis of online marketing is far from simple as it is usually conducted in multiple channels which results depend on each other. The results of the performance analysis can vary drastically depending on the attribution model used. An online marketing attribution analysis is needed to make better decisions on where to allocate marketing budgets. This thesis aims to provide a framework for more optimal budget alloca- tion by conducting a data-driven attribution model analysis to the case company’s dataset and comparing the results with the de-facto last-click attribution model’s results. The frame- work is currently utilized in the case company to improve the online marketing budget allo- cation and to gain better understanding of the marketing efforts.
The thesis begins with literature review to online marketing, measurement techniques and most used attribution modeling models in the industry. The Markov’s attribution model was chosen to the analysis because of its promising results in other research and the ease of implementation with the dataset available. The dataset used in the analysis contains 582 111 user paths collected during 7 months period from the case company’s website. The analysis was conducted using R programming language and open source ChannelAttribution package that includes tools for fitting a k-order Markovian model in to a dataset and analyzing the results and the model’s reliability. The performance of the attribution model was analyzed using a ROC curve to evaluate the prediction accuracy of the model.
The results of the research indicate the Markov’s model gives more reliable results on where to allocate the marketing budget than then last-click attribution model that is widely used in the industry. Overall the objectives of this thesis were achieved, and this study pro- vides a solid framework for marketing managers to analyze their marketing efforts and real- locate their marketing budgets in more optimal way. However, more research is needed to improve the prediction accuracy of the model and to improve the understanding of the effects of budget reallocation
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New Analytics Paradigms in Online Advertising and Fantasy Sports
Over the last two decades, digitization has been drastically shifting the way businesses operate and has provided access to high volume, variety, velocity, and veracity data. Naturally, access to such granular data has opened a wider range of possibilities than previously available. We leverage such data to develop application-driven models in order to evaluate current systems and make better decisions. We explore three application areas.
In Chapter 1, we develop models and algorithms to optimize portfolios in daily fantasy sports (DFS). We use opponent-level data to predict behavior of fantasy players via a Dirichlet-multinomial process, and our predictions feed into a novel portfolio construction model. The model is solved via a sequence of binary quadratic programs, motivated by its connection to outperforming stochastic benchmarks, the submodularity of the objective function, and the theory of order statistics. In addition to providing theoretical guarantees, we demonstrate the value of our framework by participating in DFS contests.
In Chapter 2, we develop an axiomatic framework for attribution in online advertising, i.e., assessing the contribution of individual ads to product purchase. Leveraging a user-level dataset, we propose a Markovian model to explain user behavior as a function of the ads she is exposed to. We use our model to illustrate limitations of existing heuristics and propose an original framework for attribution, which is motivated by causality and game theory. Furthermore, we establish that our framework coincides with an adjusted ``unique-uniform'' attribution scheme. This scheme is efficiently implementable and can be interpreted as a correction to the commonly used uniform attribution scheme. We supplement our theory with numerics using a real-world large-scale dataset.
In Chapter 3, we propose a decision-making algorithm for personalized sequential marketing. As in attribution, using a user-level dataset, we propose a state-based model to capture user behavior as a function of the ad interventions. In contrast with existing approaches that model only the myopic value of an intervention, we also model the long-run value. The objective of the firm is to maximize the probability of purchase and a key challenge it faces is the lack of understanding of the state-specific effects of interventions. We propose a model-free learning algorithm for decision-making in such a setting. Our algorithm inherits the simplicity of Thompson sampling for a multi-armed bandit setting and we prove its asymptotic optimality. We supplement our theory with numerics on an email marketing dataset
Model-Based Design, Analysis, and Implementations for Power and Energy-Efficient Computing Systems
Modern computing systems are becoming increasingly complex. On one end of
the spectrum, personal computers now commonly support multiple processing
cores, and, on the other end, Internet services routinely employ thousands of
servers in distributed locations to provide the desired service to its users. In
such complex systems, concerns about energy usage and power consumption
are increasingly important. Moreover, growing awareness of environmental
issues has added to the overall complexity by introducing new variables to the
problem. In this regard, the ability to abstractly focus on the relevant details
allows model-based design to help significantly in the analysis and solution of
such problems.
In this dissertation, we explore and analyze model-based design for energy
and power considerations in computing systems. Although the presented techniques
are more generally applicable, we focus their application on large-scale
Internet services operating in U.S. electricity markets. Internet services are becoming
increasingly popular in the ICT ecosystem of today. The physical infrastructure
to support such services is commonly based on a group of cooperative
data centers (DCs) operating in tandem. These DCs are geographically
distributed to provide security and timing guarantees for their customers. To
provide services to millions of customers, DCs employ hundreds of thousands
of servers. These servers consume a large amount of energy that is traditionally
produced by burning coal and employing other environmentally hazardous
methods, such as nuclear and gas power generation plants. This large energy
consumption results in significant and fast-growing financial and environmental
costs. Consequently, for protection of local and global environments, governing
bodies around the globe have begun to introduce legislation to encourage
energy consumers, especially corporate entities, to increase the share of
renewable energy (green energy) in their total energy consumption. However,
in U.S. electricity markets, green energy is usually more expensive than energy
generated from traditional sources like coal or petroleum.
We model the overall problem in three sub-areas and explore different approaches
aimed at reducing the environmental foot print and operating costs
of multi-site Internet services, while honoring the Quality of Service (QoS) constraints
as contracted in service level agreements (SLAs).
Firstly, we model the load distribution among member DCs of a multi-site Internet
service. The use of green energy is optimized considering different factors
such as (a) geographically and temporally variable electricity prices, (b)
the multitude of available energy sources to choose from at each DC, (c) the necessity
to support more than one SLA, and, (d) the requirements to offer more
than one service at each DC. Various approaches are presented for solving this
problem and extensive simulations using Google’s setup in North America are
used to evaluate the presented approaches.
Secondly, we explore the area of shaving the peaks in the energy demand of
large electricity consumers, such as DCs by using a battery-based energy storage
system. Electrical demand of DCs is typically peaky based on the usage
cycle of their customers. Resultant peaks in the electrical demand require development
and maintenance of a costlier energy delivery mechanism, and are
often met using expensive gas or diesel generators which often have a higher
environmental impact. To shave the peak power demand, a battery can be used
which is charged during low load and is discharged during the peak loads.
Since the batteries are costly, we present a scheme to estimate the size of battery
required for any variable electrical load. The electrical load is modeled using
the concept of arrival curves from Network Calculus. Our analysis mechanism
can help determine the appropriate battery size for a given load arrival curve
to reduce the peak.
Thirdly, we present techniques to employ intra-DC scheduling to regulate the
peak power usage of each DC. The model we develop is equally applicable to
an individual server with multi-/many-core chips as well as a complete DC
with an intermix of homogeneous and heterogeneous servers. We evaluate
these approaches on single-core and multi-core chip processors and present the
results.
Overall, our work demonstrates the value of model-based design for intelligent
load distribution across DCs, storage integration, and per DC optimizations
for efficient energy management to reduce operating costs and environmental
footprint for multi-site Internet services
The attribution problem: an analysis for a focal company
In today’s digital world, companies use a multitude of online marketing channels to
communicate with potential consumers. The online customer journey is also more complex
than it has ever been. Consequently, firms face an attribution problem: how to allocate the
credit of a conversion to the consumers’ touchpoints with the brand? Focusing on a focal
company, by studying user’s characteristics, analyzing the online customer journey and
exploring the results given by different attribution models, it was discovered that the customer
journey for this firm was both short in terms of length and time. As the main output, the
present work appoints an attribution model as the one best reflecting the customer journey and
the focal firm’s advertising goals - the Position Based model. The implications of a switch in
attribution model are many fold and means to improve budget allocation were suggeste
Drei Studien zu Analyse und Management von Online-Konsumentenverhalten
Over the last two decades, the Internet has fundamentally changed the ways firms and consumers interact. The ongoing evolution of the Internet-enabled market environment entails new challenges for marketing research and practice, including the emergence of innovative business models, a proliferation of marketing channels, and an unknown wealth of data. This dissertation addresses these issues in three individual essays. Study 1 focuses on business models offering services for free, which have become increasingly prevalent in the online sector. Offering services for free raises new questions for service providers as well as marketing researchers: How do customers of free e-services contribute value without paying? What are the nature and dynamics of nonmonetary value contributions by nonpaying customers? Based on a literature review and depth interviews with senior executives of free e-service providers, Study 1 presents a comprehensive overview of nonmonetary value contributions in the free e-service sector, including not only word of mouth, co-production, and network effects but also attention and data as two new dimensions, which have been disregarded in marketing research. By putting their findings in the context of existing literature on customer value and customer engagement, the authors do not only shed light on the complex processes of value creation in the emerging e-service industry but also advance marketing and service research in general. Studies 2 and 3 investigate the analysis of online multichannel consumer behavior in times of big data. Firms can choose from a plethora of channels to reach consumers on the Internet, such that consumers often use a number of different channels along the customer journey. While the unprecedented availability of individual-level data enables new insights into multichannel consumer behavior, it also makes high demands on the efficiency and scalability of research approaches. Study 2 addresses the challenge of attributing credit to different channels along the customer journey. Because advertisers often do not know to what degree each channel actually contributes to their marketing success, this attribution challenge is of great managerial interest, yet academic approaches to it have not found wide application in practice. To increase practical acceptance, Study 2 introduces a graph-based framework to analyze multichannel online customer path data as first- and higher-order Markov walks. According to a comprehensive set of criteria for attribution models, embracing both scientific rigor and practical applicability, four model variations are evaluated on four, large, real-world data sets from different industries. Results indicate substantial differences to existing heuristics such as “last click wins” and demonstrate that insights into channel effectiveness cannot be generalized from single data sets. The proposed framework offers support to practitioners by facilitating objective budget allocation and improving team decisions and allows for future applications such as real-time bidding. Study 3 investigates how channel usage along the customer journey facilitates inferences on underlying purchase decision processes. To handle increasing complexity and sparse data in online multichannel environments, the author presents a new categorization of online channels and tests the approach on two large clickstream data sets using a proportional hazard model with time-varying covariates. By categorizing channels along the dimensions of contact origin and branded versus generic usage, Study 3 finds meaningful interaction effects between contacts across channel types, corresponding to the theory of choice sets. Including interactions based on the proposed categorization significantly improves model fit and outperforms alternative specifications. The results will help retailers gain a better understanding of customers’ decision-making progress in an online multichannel environment and help them develop individualized targeting approaches for real-time bidding. Using a variety of methods including qualitative interviews, Markov graphs, and survival models, this dissertation does not only advance knowledge on analyzing and managing online consumer behavior but also adds new perspectives to marketing and service research in general.Das Internet hat die Interaktion zwischen Unternehmen und Kunden grundlegend verändert. Die Etablierung eines interfähigen Marktumfelds bringt neuartige Herausforderungen für Marketingforschung und -praxis mit sich. Dazu zählt die Entstehung von innovativen Geschäftsmodellen ebenso wie eine Vervielfachung der verfügbaren Marketingkanäle und eine bislang unbekannte Fülle an Daten. Die vorliegende Dissertation untersucht diese Herausforderungen in drei unabhängigen Studien
Internet-mainonnan tehokkuuden arviointi attribuutiomallinnuksen avulla
The importance for data-driven planning in online advertising has become a significant factor for marketers. Advancements in data collection technologies have provided marketers the prerequisites for thorough analyses of the impacts of online marketing activities and most often attribution models are used to evaluate the performance. An attribution model defines the contribution of advertising channels in inducing conversions among customers i.e. purchase decisions. This Thesis proposes a framework for online advertising performance analysis and budget optimization using such techniques.
The empirical analysis is conducted with clickstream data collected across multiple websites using cookies. We use binary logistic regression model to classify customers to converters and to non-converters. To evaluate the cost performance of a channel, we present a metric that is based on the expected cost of conversions. The logistic regression model is estimated with and without bootstrap aggregation. The coefficients are averaged over 100 iterations and the posterior distribution of conversions is ensured in training samples.
The results suggest that the probability of conversion is highest at the first banner impression. Moreover, the search engines are significantly more efficient in inducing conversions than banners and direct traffic, but banner impressions increase the traffic of other channels. Last, the joint effects of advertisements were found beneficial.
While the research objectives of this Thesis were achieved, further research is required to improve the results of the proposed framework. Nevertheless, this study provides solid results for online marketing planners and means to optimize the online marketing activities in terms of budget allocation.Käyttäjätason Internet-käyttäytymistiedon merkitys on kasvanut Internet-mainonnan suunnittelussa. Kehittyneet tiedonkeruutekniikat mahdollistavat Internet-mainonnan vaikutusten yksilötason analysoinnin attribuutiomallinnuksella. Attribuutiomalli kuvaa, miten eri mainoskanavat ovat vaikuttaneet käyttäjän ostopäätökseen eli käyttäjän konversioon. Tässä tutkimuksessa esitetään attribuutiomallinnukseen perustuva viitekehys Internet-mainonnan tehokkuuden analysointia ja budjetin optimointia varten.
Työn empiirinen tarkastelu tehdään käyttäjätason internetkäyttäytymistiedon perusteella. Analysoitu aineisto on kerätty Internet-sivuilta evästeiden avulla. Kuluttajien ostokäyttäytymistä mallinnetaan binäärisellä logistisella regressiomallilla. Mainoskanavien kustannustehokkuuden mittaamiseen työssä esitetään metriikka, joka kuvaa sitä odotusarvoista kustannusta, millä käyttäjä kussakin kanavassa konvertoituu.
Tulosten perusteella käyttäjän todennäköisyys konvertoitua on suurimmillaan ensimmäisen bannerihavainnon jälkeen. Samoin näiden valossa hakukone on tehokas konvertoimaan käyttäjiä. Lisäksi havaittiin, että bannerimainokset vaikuttavat muiden kanavien kävijämääriin, ja useimmiten mainoskanavien yhteisvaikutukset lisäävät käyttäjän konvertoitumis-todennäköisyyttä.
Tutkimukselle asetut tavoitteet saavutettiin. Tutkimuksessa havaittiin, että markkinointikanavien välisten suhteiden parempi ymmärtäminen vaatii lisätutkimusta. Tutkimuksessa saatujen tulosten avulla Internet-mainonnan suunnittelijat pystyvät tehostamaan markkinointitoimenpiteitä ja markkinointibudjetin käyttöä