{"id":3050,"date":"2021-03-10T10:34:53","date_gmt":"2021-03-10T10:34:53","guid":{"rendered":"https:\/\/escp.eu\/thechoice\/?p=3050"},"modified":"2021-06-08T14:37:12","modified_gmt":"2021-06-08T13:37:12","slug":"deep-learning-a-game-changer-for-marketing-analytics-or-is-it-really","status":"publish","type":"post","link":"https:\/\/escp.eu\/thechoice\/tl-dr\/deep-learning-a-game-changer-for-marketing-analytics-or-is-it-really\/","title":{"rendered":"Deep learning: a game changer for marketing analytics. Or is it?"},"content":{"rendered":"\n<p class=\"has-drop-cap has-medium-font-size\"><em><strong>An <a href=\"https:\/\/sloanreview.mit.edu\/article\/is-deep-learning-a-game-changer-for-marketing-analytics\/\" target=\"_blank\" rel=\"noreferrer noopener\">article from the MIT Sloan Management Review<\/a> discusses the performance of deep learning methods compared to traditional ones, and its ability to accurately predict consumer choices.<\/strong><\/em><\/p>\n\n\n\n<p><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Deep learning has been delivering impressive results in AI applications<\/p><\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\"><em><strong>What exactly is deep learning?<\/strong><\/em><\/h3>\n\n\n\n<p><strong>Deep learning <\/strong>consists in using a neural network of latent variables and hidden layers to predict an output variable such as consumer response, rather than using a single equation. The authors explain that deep learning has been delivering impressive results in AI applications these past few years: \u201cApple\u2019s Siri, for example, translates the human voice into computer commands that allow iPhone owners to get answers to questions, send messages, and navigate their way to and from obscure locations.\u201d<br><mark>The main advantage is the way it can handle verbal and visual data simultaneously with numeric inputs. This is particularly valuable in today\u2019s big data environment<\/mark>, where available data can include user comments and other non-numerical content.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Harnessing the powers of deep learning<\/strong><\/h3>\n\n\n\n<p>Because of these potential benefits, <mark>different organizations are making big investments to harness the powers of deep learning in their own ways<\/mark>. For instance, a bank \u201ccould leverage deep learning to develop new products or services and customize its promotions. By analyzing data on customer loan histories, credit card transactions, savings and checking account records, website clicks, social media behavior, product ratings, and search histories, it could gain insights into the things certain customers value.\u201d However, <mark>the key question that remains unanswered, in particular for marketers, is whether deep learning really provides better predictions for estimating consumers\u2019 shopping and choice behaviours compared to traditional methods?<\/mark><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Deep learning delivers only marginal gains for consumer choice prediction<\/strong><\/h3>\n\n\n\n<p><em><strong>The use of highly sophisticated deep learning methods has shown limited ability to improve predictions of consumers\u2019 choices over basic statistical methods<\/strong>, <\/em>in the context of a study conducted by the authors involving credit cards (an accuracy rating of 73% for advanced deep learning compared with 70.5% for the traditional models).<br><em>These small gains in predictive accuracy \u201care not likely to generate sufficiently high returns in most cases to justify significant investments,\u201d they conclude.<\/em><\/p>\n\n\n\n<p><strong>So what? Is deep learning another passing fad?<\/strong><\/p>\n\n\n\n<p>There is no question that <strong>deep learning methods are enabling revolutions in many domains<\/strong>, including image recognition, language translation, and many others. <mark>However, predicting consumers\u2019 choices is quite a complex task.<\/mark><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Deep learning\u2019s significant advantages over traditional models is in analysing \u201crich\u201d databases<\/p><\/blockquote>\n\n\n\n<p>That said, the <strong>prospects are bright in some contexts<\/strong>. As noted, deep learning\u2019s significant advantages over traditional models is in analysing \u201crich\u201d databases that include images, non-numerical data and user-generated content (such as Amazon reviews, Instagram posts, Facebook posts, and comments on company websites). Thus, <mark>the \u201cricher\u201d the data, the higher the predictive accuracy of deep learning methods<\/mark>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Prof. Vafainia takes a look at an article from the MIT Sloan Management Review discussing the performance of deep learning methods compared to traditional ones, and its ability to accurately predict consumer choices.<\/p>\n","protected":false},"author":1,"featured_media":3063,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-3050","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tl-dr","category-15","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Deep learning: a game changer for marketing analytics. 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