Analysis of online advertisement performance using Markov chains
Poutanen, Riku (2020)
2020
Tuotantotalouden DI-tutkinto-ohjelma - Degree Programme in Industrial Engineering and Management, MSc (Tech)
Tekniikan ja luonnontieteiden tiedekunta - Faculty of Engineering and Natural Sciences
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Hyväksymispäivämäärä
2020-04-20
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:tuni-202004123195
https://urn.fi/URN:NBN:fi:tuni-202004123195
Tiivistelmä
The measurement and performance analysis of online marketing is far from simple as it is usually conducted in multiple channels which results depend on each other. The results of the performance analysis can vary drastically depending on the attribution model used. An online marketing attribution analysis is needed to make better decisions on where to allocate marketing budgets. This thesis aims to provide a framework for more optimal budget alloca- tion by conducting a data-driven attribution model analysis to the case company’s dataset and comparing the results with the de-facto last-click attribution model’s results. The frame- work is currently utilized in the case company to improve the online marketing budget allo- cation and to gain better understanding of the marketing efforts.
The thesis begins with literature review to online marketing, measurement techniques and most used attribution modeling models in the industry. The Markov’s attribution model was chosen to the analysis because of its promising results in other research and the ease of implementation with the dataset available. The dataset used in the analysis contains 582 111 user paths collected during 7 months period from the case company’s website. The analysis was conducted using R programming language and open source ChannelAttribution package that includes tools for fitting a k-order Markovian model in to a dataset and analyzing the results and the model’s reliability. The performance of the attribution model was analyzed using a ROC curve to evaluate the prediction accuracy of the model.
The results of the research indicate the Markov’s model gives more reliable results on where to allocate the marketing budget than then last-click attribution model that is widely used in the industry. Overall the objectives of this thesis were achieved, and this study pro- vides a solid framework for marketing managers to analyze their marketing efforts and real- locate their marketing budgets in more optimal way. However, more research is needed to improve the prediction accuracy of the model and to improve the understanding of the effects of budget reallocation.
The thesis begins with literature review to online marketing, measurement techniques and most used attribution modeling models in the industry. The Markov’s attribution model was chosen to the analysis because of its promising results in other research and the ease of implementation with the dataset available. The dataset used in the analysis contains 582 111 user paths collected during 7 months period from the case company’s website. The analysis was conducted using R programming language and open source ChannelAttribution package that includes tools for fitting a k-order Markovian model in to a dataset and analyzing the results and the model’s reliability. The performance of the attribution model was analyzed using a ROC curve to evaluate the prediction accuracy of the model.
The results of the research indicate the Markov’s model gives more reliable results on where to allocate the marketing budget than then last-click attribution model that is widely used in the industry. Overall the objectives of this thesis were achieved, and this study pro- vides a solid framework for marketing managers to analyze their marketing efforts and real- locate their marketing budgets in more optimal way. However, more research is needed to improve the prediction accuracy of the model and to improve the understanding of the effects of budget reallocation.