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