WHAT IS UPLIFT MODELING? D. W. MCCORMACK, JR. QPRC 2013

WHAT IS UPLIFT MODELING?
D. W. MCCORMACK, JR.
QPRC 2013
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WHAT IS UPLIFT
INTRODUCTION
MODELING?
Company Confidential - For Internal Use Only
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WHAT IS UPLIFT
INTRODUCTION
MODELING?
Collect data on
possible target
recipients
Apply treatment to
target population
Find X that
optimizes
P(Y = 1) or Y^
But does this predict treatment success?
What about those who respond in the absence of the treatment?
And those who don’t respond because of the treatment?
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WHAT IS UPLIFT
INTRODUCTION
MODELING?
How much more likely am I to respond in the presence of a treatment?
Yes
Sure
Thing
Persuadable
No
Do Not
Disturb
Lost
Cause
Responds
to treatment
Yes
No
Responds without treatment
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Siegel, E. (2013)
WHAT IS UPLIFT
INTRODUCTION
MODELING?
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WHAT IS UPLIFT
MODELING?
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Uplift modeling attempts to:
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Determine the conditions associated with those most affected by the treatment.
Quantify the incremental benefit of applying a treatment over not applying a treatment.
Identify the proportion of the target population for which a treatment is profitable.
AKA: incremental response modeling, net lift modeling, true lift modeling,
differential value modeling, impact modeling.
Related to: Structural Mean Models and Differential Prediction.
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WHAT IS UPLIFT
WHERE IT CAN BE USED
MODELING?
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Marketing & Advertising
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Cross-sell (Fries with that burger?) and Up-sell (Super-size that?)
Retention
Content (Blue background or white?) and channel selection (e-mail or phone call?)
Personalized Medicine
Other
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Risk
Voter targeting
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WHAT IS UPLIFT
HOW IS IT DIFFERENT?
MODELING?
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Typical predictive models
P (Y = 1 X,T = 1)
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OR
f (Y X,T = 1)
Uplift models
P (Y = 1 X,T = 1) − P (Y = 1 X,T = 0)
OR
f (Y X,T = 1) − f (Y X,T = 0)
f Y g ( X,T ) , e.g., E Y = β X + φT + ϕ XT
(
)
(
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)
WHAT IS UPLIFT
MODELING?
Treatment
f (Y X,T = 1)
Collect data on
possible target
recipients
f (Y X,T = 1) − f (Y X,T = 0)
Control
f (Y X,T = 0)
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WHAT IS UPLIFT
HOW IS IT IMPLEMENTED?
MODELING?
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Trees (Radcliffe & Surry)
Logistic Regression (Lo)
Naïve Bayes (Larsen)
Neural Networks (Lo)
Inductive Logic Programming (ILP - Nassif)
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WHAT IS UPLIFT
HOW IS IT IMPLEMENTED?
MODELING?
• 
Commercial Software
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Portrait Uplift (Pitney Bowes)
Enterprise Miner 7.1, JMP Pro 11 (SAS)
InfiniteInsight (KXEN)
Freeware
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Aleph (ILP)
R (SimpleNet)
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WHAT IS UPLIFT
CHALLENGES
MODELING?
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Model implementation – One or two?
Variable Selection
Splitting and pruning criteria (trees)
Multilevel treatments
Multiplicative models
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WHAT IS UPLIFT
EXAMPLE
MODELING?
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Treatment – Marketing promotion incentive mailed to 4500 customers
Response – Purchase made in promotional period (1/0), sales ($)
Predictors – 32 measuring a number of customer characteristics such as
tenure, incentive club membership level, online ordering history, etc.
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WHAT IS UPLIFT
EXAMPLE
MODELING?
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Two model logistic regression approach used.
Sixteen variables selected based on net information value.
! P ( X = x Y = 1) P ( X = x Y = 0) $
T
i
C
i
&
NWOEi = log ##
&
" PC ( X = xi Y = 1) PT ( X = xi Y = 0) %
NIV = ∑{PT ( X = xi Y = 1) PC ( X = xi Y = 0) − PC ( X = xi Y = 1) PT ( X = xi Y = 0)}NWOEi
i
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WHAT IS UPLIFT
EXAMPLE
MODELING?
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WHAT IS UPLIFT
EXAMPLE
MODELING?
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WHAT IS UPLIFT
REFERENCES
MODELING?
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Heckman, J. (1979). Sample Selection Bias as a Specification Error. Econometrica, 47, 35 – 46.
Jaśkowski, M. & Jaroszewicz, S. (2012). Uplift Modeling for Clinical Trial Data. In ICML 2012
Workshop on Machine Learning for Clinical Data Analysis, Edinburgh, Scotland, June, 2012.
Larsen, K. (2005). Generalized Naïve Bayes Classifiers. SIGKDD Explorations, 7(1), 76 – 81
Lee, T., Zhang, R., Meng, X., & Ryan L. (2013). Incremental Response Modeling Using SAS®
Enterprise MinerTM. Paper 096-2013, SAS Global Forum, San Francisco, CA 2013
Lo, V.S.Y (2002). The True Lift Model - A Novel Data Mining Approach to Response Modeling in
Database Marketing. SIGKDD Explorations, 4(2), 78 – 86.
Nassif, H., Costa, V.S., Burnside, E.S., & Page, D. (2012). Machine Learning and Knowledge
Discovery in Databases. Lecture Notes in Computer Science Volume 7523, 617 – 632.
Radcliffe, N.J. & Surry, P.D. (2011). Real-World Uplift Modelling with Significance-Based Trees.
Portrait Technical Report TR-2011-1, Stochastic Solutions.
Siegel, E. (2013). Persuasion by the Number (Chapter 7 in Predictive Analytics: The Power to
Predict Who Will Click, Buy, Lie, or Die). John Wiley & Sons, Hoboken, NJ.
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WHAT IS UPLIFT
ACKNOWLEDGEMENTS
MODELING?
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Victor Lo (Fidelity)
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