Evaluating Marketing Initiatives using Explainable Machine Learning : An Alternative to Attribution Models

Abstract: Since its inception, Marketing has always needed more clearly defined incrementality, i.e., a measurement of advertisement effectiveness. Nowadays, Marketing is an evergrowing business; within it, Digital Marketing is taking the spotlight. Digital Marketing brings multiple benefits, such as a global reach and a lower cost associated with customer communication. However, more importantly, customer interaction and engagement can be clearly tracked, which can help measure Marketing impact. Nowadays, this problem is tackled in two ways, A/B testing and attribution models. Even though statistically solid and proven, A/B testing, a form of hypothesis testing, faces implementation issues and other practical aspects, leading to only sometimes being used in real-world applications. On the other hand, Attribution models are not comparable, thus not quantifiable, and good attribution models are hard to develop, leaving companies relying on third-party providers. In short, this paper suggests that the impact of each marketing campaign can be measured in a two-step process: (1) Training a model to predict a customer's conversion, given their previous advertisement interactions; (2) Applying explainable machine learning methods to said model to infer the importance of each advertisement interaction in a user journey. The main methods used are permutation feature importance and Shapley values. The dataset is designed such that each type of advertisement interaction is a model's feature; thus, an importance value can be calculated for each interaction. On top of that, a local method - counterfactual explanations - and a possible implementation of a hyper-personal application are discussed. The proposed solution is shown to provide more accurate attributions than most common attribution models, with the possibility of augmenting the accuracy by changing the underlying model. It is also suggested that it could benefit significantly from more data on customer demographics, generating insights into how campaigns affect different customer segments.