lecture 4

Question 1

The goal of a marketing campaign is to

Answer 1

increase sales either short term or long term

Question 2

How to evaluate the performance of marketing

Answer 2

each campaign/channel is evaluated on incremental profit that it produces relative to its cost

Question 3

ROI Formula

Answer 3

incremental profit due to advertising - cost of advertising/cost of advertising

Question 4

potential issues that you can encounter

Answer 4

Lurking variables

Sample selection bias

No control group

Question 5

Lurking variables

Answer 5

variables that are not included as an explanatory or response variable in the analysis but can affect the interpretation of relationships between variables

Also called a confounding variable

Question 6

Sample selection bias

Answer 6

Faliling to ensure that the sample obtained is representative of the population intended to be analyzed

Question 7

No control group

Answer 7

effectiveness compared to no intervention (e.g. promotional strategy)

Question 8

“traditional” data driven marketing

Answer 8

anchor on data that is available

Finds a purpose for data

starts from what is known

Empowers data analyst/scientists

Question 9

Gold standard data driven marketing

Answer 9

anchor on a decision that needs to be made

Finds data for a purpose

Start from what is unknown

Empowers decision making

Question 10

Causal data driven marketing

Answer 10

what is the imipact of a marketing intervention (X) on an outcome (Y)

1. Hard to evaluate
2. Need to compute counterfactuals
3. Challenge: same person cannot both get treatment and not get treatment

Question 11

Field experiments

Answer 11

Field experimentation represents the conjunction of two methodological strategies: experimentation and fieldwork

Question 12

Core idea of field experiments

Answer 12

Sample of individuals are randomly assigned into group that receives intervention (treatment) and group that does not receive intervention (control)

Question 13

Key features of a field experiment

Answer 13

1) authenticity of treatments
2) representativeness of participants
3) Real world context
4) relevant outcome measures

Question 14

“Ture” experiments
Three identifiable aspects of “true experiments”

Answer 14

1) comparison of outcomes between treatment and control

2) Assignment of subjects is to groups is done through a randomization device

3) Manipulation of treatment is under control of a researcher/analyst

Question 15

Eight steps of an experiment

Answer 15

Write down a testable hypothesis (generally advocate a “no change” hypothesis)

Decide on two ore more treatments that might impact the outcome variable(s) of interest (generally, include a control treatment where nothing is changed to use as a baseline

Compute how many subjects to include in the experiment

Randomly divide subjects (people/stores) into groups

Expose each group to a different treatment

Measure the response in terms of an outcome variable(s) for subjects in each group

Compare responses via a (correct) statistical test

Conclude whether to reject or “fail to reject” your hypothesis based on (7)

Good experiments have a hypothesis that answers a strategic question for a business

Question 16

Experiment

Answer 16

statistical test where a hypothesis is subjected to data produced by a specific procedue in which some variables thought to affect an outcome is deliberately manipulated

Question 17

Experiments are often called

Answer 17

A/B tests or A/B/n tests