Pseudo-Social Network Targeting from Consumer Transaction Data

31 Pages Posted: 28 Sep 2011

See all articles by David Martens

David Martens

University of Antwerp

Foster Provost

New York University

Date Written: September 2011

Abstract

This design science paper presents a method for targeting consumers based on a 'pseudo-social network' (PSN): consumers are linked if they transfer money to the same entities. A marketer can target those individuals that are strongly connected to key individuals. We present the PSN design and a large-scale empirical study using data from a major bank. For two different product offerings, consumers that are close to existing customers in the PSN have significantly higher take rates thanthe 'most likely' candidates identified by state-of-the-artsocio-demographic (SD) predictive modeling. Interestingly, the PSN targeting only does better for the closest neighbors. However, the different models capture different information: combining the two does significantly better than either alone. The results demonstrate that social targeting can be applied broadly, to settings where the network among consumers is unlikely to be a true social network, but nonetheless captures inherent similarity.

Suggested Citation

Martens, David and Provost, Foster, Pseudo-Social Network Targeting from Consumer Transaction Data (September 2011). Faculty of Applied Economics, University of Antwerp, Belgium; Departmentof Information, Operations a, Vol. , pp. -, 2011. Available at SSRN: https://ssrn.com/abstract=1934670

David Martens

University of Antwerp ( email )

Prinsstraat 13
Antwerp, Antwerp 2000
Belgium

Foster Provost

New York University ( email )

44 West Fourth Street
New York, NY 10012
United States

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