Marketing Optimization

Predictive Analytics Use Case

Marketing Optimization
Sample Application

Description A company can determine the influence of the marketing

and advertising campaigns on sales and identify whether
marketing expenses are effective for the business and
optmize the marketing budget to increase sales or ROI.
Marketing Optimization
Sample Application

Target
Sales
Marketing Optimization
Sample Application

Influencing • Advertisement expense

Factors • Vacancy
• Wholesale gap
Marketing Optimization
Sample Application

Algorithm(s) To solve this problem, we first need to identify the

relationship between advertisement expense and sales
using a correlation algorithm. Correlation is a statistical
measure that indicates the extent to which two variables
fluctuate together.
• A positive correlation indicates the extent to which those
variables increase or decrease in parallel.
• A negative correlation indicates the extent to which one
variable increases as the other decreases.
 Marketing Optimization
Sample Application

Correlation
Model
Visualisation
 Marketing Optimization
Sample Application

Correlation
Interpretation
Marketing Optimization
Sample Application

The correlation coefficient value indicates the strength of the

relationship.
Correlation
Result
Marketing Optimization
Sample Application

Once the relationship is identified, we can further predict

Algorithm(s) sales using regression algorithm.
• Multiple Linear Regression is a technique that attempts to
explore the relationship between two or more
independent variables and one dependent variable.
• The higher the R-square value of a model(>=0.7), the
better the accuracy of the model.
• A lower R-square value of a model(<0.7) means the model
needs to be rebuilt using different input parameters or the
input dataset doesn't exhibit a structure suitable for
regression.
 Marketing Optimization
Sample Application

Regression
Model
Visualisation
 Marketing Optimization
Sample Application

Regression
Model
Visualisation
 Marketing Optimization
Sample Application

Regression
Model
Visualisation
Marketing Optimization
Sample Application

Regression
Model
Summary
 Marketing Optimization
Sample Application

Regression
Interpretation
Marketing Optimization
Sample Application

Predicted sales
Regression
Result
Marketing Optimization
Sample Application

Sales prediction with accuracy value (R-square value) based on

advertisement expense, wholesale gap and vacancy can be
Regression performed using APPLY functionality as shown below
Result
Marketing Optimization
Sample Application

Regression
Result
Marketing Optimization
Predictive Analytics Use Case

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Smarten – Marketing Optimization Use Case - 2019