Bayesian Marketing Mix Models: State of the Art and their Future


AUTHORED BY

Thomas Wiecki

DATE

2022-11-11


Introduction

This event is a discussion between Luca Fiaschi and Thomas Wiecki about Bayesian modeling in online marketing with a special focus on Marketing Mix Models and Customer Lifetime Value models.

In the panel discussion, Luca Fiaschi shares his thoughts on the current state and the future of Bayesian data science in online marketing, based on many years of real-world experience leading teams at HelloFresh and Stitchfix. A special focus will be placed on Marketing Mix Models (MMM) and the work PyMC Labs has done with Luca during his time at HelloFresh. In addition, Customer Lifetime Value models play an ever more important role in marketing but remain stuck in old modeling approaches. We will discuss a potential way forward.

Video



Timestamps

00:00 Introduction by Thomas

01:39 Luca Fiaschi introduces himself

02:37 Alex Andorra introduces himself

03:57 Attribution methods have multiple use cases across businesses

04:39 Analyze media models

05:23 Find Optimal Budget Allocation(What-if scenarios and optimization)

05:55 Forecasting

06:27 Most common attribution methods

11:02 Structure of a Media Mix Model

12:04 Saturation and Adstock functions

14:04 Advantages of Bayesian Media Mix Models

17:14 Bayesian MMM can be calibrated to ensure consistency with incrementality measurements

19:50 Challenges encountered when developing Hello Fresh’s model

24:36 PyMC Labs work with Hello Fresh to build the model

33:12 Comparing the Hello Fresh model with the other different frameworks

36:05 Business insights that can be derived from the Hierarchical Gaussian Processes model

40:10 Question: How can business people and Data science efforts be aligned in an organization?

44:23 Question: Have you considered introducing relationships between regressor variables

48:19 Question: To what level of confidence are you able to say that you are at a certain saturation level and can you use Bayesian methods to do that?

54:28 Question: Have you ever settled for Gaussian Random walk parameters over latent Gaussian Processes(GPs) for the sake of simplification or explainability?

59:19 Question: Media Mix Models suffer from multicollinearity, any advice?

1:02:14 Thank you and closing remarks

Resources


Work with PyMC Labs

If you are interested in seeing what we at PyMC Labs can do for you, then please email info@pymc-labs.com. We work with companies at a variety of scales and with varying levels of existing modeling capacity. We also run corporate workshop training events and can provide sessions ranging from introduction to Bayes to more advanced topics.