Evaluating the Effectiveness of Marketing Campaigns for Malls Using A Novel Interpretable Machine Learning Model
Posted: 18 Jun 2019 Last revised: 25 Jan 2021
Date Written: June 1, 2019
In this study, we use newly available data and develop a novel interpretable machine learning model to evaluate how different types of marketing campaigns and budget allocations influence customer traffic to malls. The data we use is a large-scale customer traffic dataset, collected through AI-chip-embedded sensors, across 25 malls for a two-year period, and we combine it with detailed campaign information for our analysis. We classify the campaigns into five categories based on the approach and timing of the campaigns. We then develop an innovative interpretable machine learning model, named “Generalized Additive Neural Network Model (GANNM)”, to accurately learn the response curves for different marketing campaigns. The response curves characterize the impact of campaign budget on customer traffic. We demonstrate that this new model has better predictive accuracy compared with current interpretable models and also yields additional business insights. We find that campaigns with experience incentives lead to larger increases in customer traffic than campaigns with sales incentives only, and the contrast is more significant for campaigns in off-peak periods. In addition, malls can piggyback on online promotion events and boost customer traffic with campaigns held at the same time. We further demonstrate that the optimized budget allocation based on the response curves learned by GANNM yields a 11.2% increase in customer traffic overall, compared with 3.2% achieved by a baseline with pre-assumed functional forms of response curves. Overall, our proposed model provides more accurate estimation for response curves and presents interpretable and actionable insights for managers.
Keywords: Interpretable Machine Learning, Response Curve, Mall, Marketing Campaigns
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