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How will Big Data affect Marketing Scholarship?
K. Sudhir Yale School of Management
Editor-in-Chief Designate, Marketing Science
Presented at NYU Big Data Conference 10/23/2015
The Rise of Big Data
! Every aspect of human (or non-human) activity and interaction can leave a digital trail in today’s world
! Leading to BIG DATA
Characteristics of Big Data: The 3Vs
Volume
• IOT Cheap sensors Digital transac8ons-‐-‐Large X, N, T
• Loca8on-‐Time • Network • Text, Audio, Video
Velocity
• Sta8c • Regular events
• Streaming • Real 8me
Variety
• Structured • Unstructured • text, • audio • video
The Big Data Ecosystem: Infrastructure+Analytics Our Focus: Analytics that add Value (Fourth V)
How can big data affect marketing scholarship?
! The science of marketing ! Identify causal relationships between marketing relevant
outcomes (Y) and managerially relevant variables (X) ! Explosion of research questions and opportunities ! Detailed data in an integrated view and ease of
experimentation--a golden age for marketing science
! The practice of marketing ! Automated and time sensitive decision making—real
time algorithms, fast algorithms etc… ! Summarization and visualization techniques that can aid
managers in helping with valid decision making
IMPACT ON THE SCIENCE OF MARKETING
Big Data: How existing research areas will benefit ! Vast majority of work is motivated by targeting and
personalization of marketing mix ! Examples: Multichannel retailing, search advertising… ! In digitally native companies, this is product design… ! Backward integration into other org decisions-operations,
accounting, HR
! Converting unstructured to structured data, minimizing relevant information loss ! Path Data—Hui, Bradlow and colleagues ! Text data- online reviews (many opportunities to go beyond) ! Eye Tracking –Wedel and colleagues ! Video data – Ding and colleagues ! E.g., Will impact research on sales, customer service…
Big Data: Possibilities ! Less about purchases, more about consumption, usage,
conversations and buying journey—individual and social
! Data centric design of business models
! Customer facing marketing will backward integrate with rest of the organization
Big Data: Has machine learning beaten us to the door? ! Well suited for scale and distributed computing ! Many of the challenges of inferring causality remain
! E.g., Endogeneity, selection, omitted variables, reverse causaliity
! “Marketing Science” has still a lot to offer “domain independent” computer scientists and mathematicians ! Unfortunately, we don’t have as many masters and PhD
students to teach practice what we do… ! May be the new MS Analytics students will be good
ambassadors for us
AUTOMATED DECISION MAKING
Real Time Bidding for Ad Display
Scalable algorithms that tradeoff accuracy and complexity (e.g., automatic bidding for advertising keywords in microseconds)
New Business Platforms—Marketing, Operations…
Speeding up algorithms through big data…
Lucic, Mario, et al. "Tradeoffs for space, time, data and risk in unsupervised learning." Proceedings of the Eighteenth International Conference on Artificial Intelligence and Statistics. 2015.
DATA SUMMARIZATION AND HEURISTICS
Summarization Example: Adding Clumpiness to RFM
Big Data is a tremendous opportunity for our field ! Big Data will help build the science and expand our
influence in organizations ! Go beyond targeting and personalization ! Advanced analytics of secondary data and experiments that go
beyond standard machine learning ! Big Data supports routine & automated decisions
! New marketing and business infrastructures will arise ! Link with computer science and OR ! Backward integrate with organizational functions
! Big Data will require validated summarization and visualization metrics ! As scholars we can divide and conquer science and practice
THANK YOU