Abstract
The relevance of decision support and the related potential has increased in the past years fostered by the rising number of data sources available inside and outside companies and total data points. The available data sources, especially company-external differ in their explanatory power and the effort needed to extract and process the data. To structure the available data and enhance the decision support process, we develop a construction model based on the principles of design science research for the development of a data landscape, which enables the definition of goal-oriented research questions and the identification of related available data in- and outside of the company. The framework is empirically tested in the field online advertising. The application reveals the landscapes contribution to the decision making which leads to economic valuable results.
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Notes
- 1.
“search” refers to clicks on paid search advertisements, “social” to clicks on advertisements on Facebook, “display” to clicks on generic banner advertisements, “affiliate” to clicks on banner advertisements of the affiliate networks, “newsletter” to clicks on emails sent to consumers, and “other” to further advertisement interactions that do not belong to one of the previous groups.
- 2.
For a more detailed description of preparing the clickstream data for the analysis, please see [30].
- 3.
In RTB, display advertising impressions are bought in an auction-based process and displayed in real time on the individual consumer level. In other words, the knowledge of a consumer’s success probability (such as a click or a conversion) at any given time is vital for accurately evaluating each advertising type and appropriately adjusting financial resources.
- 4.
We do so following Nottorf and Funk (2013) and [6] with respect to [27], who suggested ranking observations in decreasing order of predicted probabilities and classifying the first x as clicks (where x is the total number of clicks observed in the holdout sample) because the behavior to be predicted is relatively rare and the base probability of the outcome is very low. As Chatterjee et al. also emphasize, with a large number of nonevents (no conversions) and very few events (conversions), logistic regression models can sharply underestimate the probability of the occurrence of events.
- 5.
In a real setting, these expected CPOs should be calculated repeatedly because the parameter estimates may change over time and it is necessary to analyze the probabilities of new consumers.
- 6.
Note that there are additional costs (i.e., costs for data storage or for analyzing consumer-level data) that should also have been considered in the calculation above. For demonstration purposes, these costs are negligible. For example, the size of the initial dataset of 500,000 consumers is approximately 150 MB, and the data storage prices for 1 GB of data are less than €0.10 at Amazon web services. While estimating the model is computationally expensive, determining the conversion probabilities is not. Therefore, we can neglect the costs for the computation of the expected conversion probability for an individual advertising exposure.
- 7.
\(loss_{exp} = 470.906*0.25*0.50-962*75\).
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Hansmann, T., Nottorf, F. (2015). Decision Support in the Field of Online Marketing - Development of a Data Landscape. In: Obaidat, M., Holzinger, A., Filipe, J. (eds) E-Business and Telecommunications. ICETE 2014. Communications in Computer and Information Science, vol 554. Springer, Cham. https://doi.org/10.1007/978-3-319-25915-4_5
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