Table of Contents

CHAPTER 1. INTRODUCTION

-- 1.1 The Subject of Algorithmic Marketing

-- 1.2 The Definition of Algorithmic Marketing

-- 1.3 Historical Backgrounds and Context

-- -- 1.3.1 Online Advertising: Services and Exchanges

-- -- 1.3.2 Airlines: Revenue Management

-- -- 1.3.3 Marketing Science

-- 1.4 Programmatic Services

-- 1.5 Who Should Read This Book?

-- 1.6 Summary


CHAPTER 2. REVIEW OF PREDICTIVE MODELING

-- 2.1 Descriptive, Predictive, and Prescriptive Analytics

-- 2.2 Economic Optimization

-- 2.3 Machine Learning

-- 2.4 Supervised Learning

-- -- 2.4.1 Parametric and Nonparametric Models

-- -- 2.4.2 Maximum Likelihood Estimation

-- -- 2.4.3 Linear Models

-- -- -- 2.4.3.1 Linear Regression

-- -- -- 2.4.3.2 Logistic Regression and Binary Classification

-- -- -- 2.4.3.3 Logistic Regression and Multinomial Classification

-- -- -- 2.4.3.4 Naive Bayes Classifier

-- -- 2.4.4 Nonlinear Models

-- -- -- 2.4.4.1 Feature Mapping and Kernel Methods

-- -- -- 2.4.4.2 Adaptive Basis and Decision Trees

-- 2.5 Representation Learning

-- -- 2.5.1 Principal Component Analysis

-- -- -- 2.5.1.1 Decorrelation

-- -- -- 2.5.1.2 Dimensionality Reduction

-- -- 2.5.2 Clustering

-- 2.6 More Specialized Models

-- -- 2.6.1 Consumer Choice Theory

-- -- -- 2.6.1.1 Multinomial Logit Model

-- -- -- 2.6.1.2 Estimation of the Multinomial Logit Model

-- -- 2.6.2 Survival Analysis

-- -- -- 2.6.2.1 Survival Function

-- -- -- 2.6.2.2 Hazard Function

-- -- -- 2.6.2.3 Survival Analysis Regression

-- -- 2.6.3 Auction Theory

-- 2.7 Summary


CHAPTER 3. PROMOTIONS AND ADVERTISEMENTS

-- 3.1 Environment

-- 3.2 Business Objectives

-- -- 3.2.1 Manufacturers and Retailers

-- -- 3.2.2 Costs

-- -- 3.2.3 Gains

-- 3.3 Targeting Pipeline

-- 3.4 Response Modeling and Measurement

-- -- 3.4.1 Response Modeling Framework

-- -- 3.4.2 Response Measurement

-- 3.5 Building Blocks: Targeting and LTV Models

-- -- 3.5.1 Data Collection

-- -- 3.5.2 Tiered Modeling

-- -- 3.5.3 RFM Modeling

-- -- 3.5.4 Propensity Modeling

-- -- -- 3.5.4.1 Look-alike Modeling

-- -- -- 3.5.4.2 Response and Uplift Modeling

-- -- 3.5.5 Segmentation and Persona-based Modeling

-- -- 3.5.6 Targeting by using Survival Analysis

-- -- 3.5.7 Lifetime Value Modeling

-- -- -- 3.5.7.1 Descriptive Analysis

-- -- -- 3.5.7.2 Markov Chain Models

-- -- -- 3.5.7.3 Regression Models

-- 3.6 Designing and Running Campaigns

-- -- 3.6.1 Customer Journeys

-- -- 3.6.2 Product Promotion Campaigns

-- -- -- 3.6.2.1 Targeting Process

-- -- -- 3.6.2.2 Budgeting and Capping

-- -- 3.8.4 Multi-Touch Attribution

-- 3.9 Measuring the Effectiveness

-- -- 3.9.1 Randomized Experiments

-- -- -- 3.9.1.1 Conversion Rate

-- -- -- 3.9.1.2 Uplift

-- -- 3.9.2 Observational Studies

-- -- -- 3.9.2.1 Model Specification

-- -- -- 3.9.2.2 Simulation

-- 3.10 Architecture of Targeting Systems

-- -- 3.10.1 Targeting Server

-- -- 3.10.2 Data Management Platform

-- -- 3.10.3 Analytics Platform

-- 3.11 Summary


CHAPTER 4. SEARCH

-- 4.1 Environment

-- 4.2 Business Objectives

-- -- 4.2.1 Relevance Metrics

-- -- 4.2.2 Merchandising Controls

-- -- 4.2.3 Service Quality Metrics

-- 4.3 Building Blocks: Matching and Ranking

-- -- 4.3.1 Token Matching

-- -- 4.3.2 Boolean Search and Phrase Search

-- -- 4.3.3 Normalization and Stemming

-- -- 4.3.4 Ranking and the Vector Space Model

-- -- 4.3.5 TFIDF Scoring Model

-- -- 4.3.6 Scoring with n-grams

-- 4.4 Mixing Relevance Signals

-- -- 4.4.1 Searching Multiple Fields

-- -- 4.4.2 Signal Engineering and Equalization

-- -- -- 4.4.2.1 One Strong Signal

-- -- -- 4.4.2.2 Strong Average Signal

-- -- -- 4.4.2.3 Fragmented Features and Signals

-- -- 4.4.3 Designing a Signal Mixing Pipeline

-- 4.5 Semantic Analysis

-- -- 4.5.1 Synonyms and Hierarchies

-- -- 4.5.2 Word Embedding

-- -- 4.5.3 Latent Semantic Analysis

-- -- 4.5.4 Probabilistic Topic Modeling

-- -- 4.5.5 Probabilistic Latent Semantic Analysis

-- -- -- 4.5.5.1 Latent Variable Model

-- -- -- 4.5.5.2 Matrix Factorization

-- -- -- 4.5.5.3 pLSA Properties

-- -- 4.5.6 Latent Dirichlet Allocation

-- -- 4.5.7 Word2Vec Model

-- 4.6 Search Methods for Merchandising

-- -- 4.6.1 Combinatorial Phrase Search

-- -- 4.6.2 Controlled Precision Reduction

-- -- 4.6.3 Nested Entities and Dynamic Grouping

-- 4.7 Relevance Tuning

-- -- 4.7.1 Learning to Rank

-- -- 4.7.2 Learning to Rank from Implicit Feedback

-- 4.8 Architecture of Merchandising Search Services

-- 4.9 Summary


CHAPTER 5. RECOMMENDATIONS

-- 5.1 Environment

-- -- 5.1.1 Properties of Customer Ratings

-- 5.2 Business Objectives

-- 5.3 Quality Evaluation

-- -- 5.3.1 Prediction Accuracy

-- -- 5.3.2 Ranking Accuracy

-- -- 5.3.3 Novelty

-- -- 5.3.4 Serendipity

-- -- 5.3.5 Diversity

-- -- 5.3.6 Coverage

-- -- 5.3.7 The Role of Experimentation

-- 5.4 Overview of Recommendation Methods

-- 5.5 Content-based Filtering

-- -- 5.5.1 Nearest Neighbor Approach

-- -- 5.5.2 Naive Bayes Classifier

-- -- 5.5.3 Feature Engineering for Content Filtering

-- 5.6 Introduction to Collaborative Filtering

-- -- 5.6.1 Baseline Estimates

-- 5.7 Neighborhood-based Collaborative Filtering

-- -- 5.7.1 User-based Collaborative Filtering

-- -- 5.7.2 Item-based Collaborative Filtering

-- -- 5.7.3 Comparison of User-based and Item-based Methods

-- -- 5.7.4 Neighborhood Methods as a Regression Problem

-- -- -- 5.7.4.1 Item-based Regression

-- -- -- 5.7.4.2 User-based Regression

-- -- -- 5.7.4.3 Fusing Item-based and User-based Models

-- 5.8 Model-based Collaborative Filtering

-- -- 5.8.1 Adapting Regression Models to Rating Prediction

-- -- 5.8.2 Naive Bayes Collaborative Filtering

-- -- 5.8.3 Latent Factor Models

-- -- -- 5.8.3.1 Unconstrained Factorization

-- -- -- 5.8.3.2 Constrained Factorization

-- -- -- 5.8.3.3 Advanced Latent Factor Models

-- 5.9 Hybrid Methods

-- -- 5.9.1 Switching

-- -- 5.9.2 Blending

-- -- -- 5.9.2.1 Blending with Incremental Model Training

-- -- -- 5.9.2.2 Blending with Residual Training

-- -- -- 5.9.2.3 Feature-weighted Blending

-- -- 5.9.3 Feature Augmentation

-- -- 5.9.4 Presentation Options for Hybrid Recommendations

-- 5.10 Contextual Recommendations

-- -- 5.10.1 Multidimensional Framework

-- -- 5.10.2 Context-Aware Recommendation Techniques

-- -- 5.10.3 Time-Aware Recommendation Models

-- -- -- 5.10.3.1 Baseline Estimates with Temporal Dynamics

-- -- -- 5.10.3.2 Neighborhood Model with Time Decay

-- -- -- 5.10.3.3 Latent Factor Model with Temporal Dynamics

-- 5.11 Non-Personalized Recommendations

-- -- 5.11.1 Types of Non-Personalized Recommendations

-- -- 5.11.2 Recommendations by Using Association Rules

-- 5.12 Multiple Objective Optimization

-- 5.13 Architecture of Recommender Systems

-- 5.14 Summary


CHAPTER 6. PRICING AND ASSORTMENT

-- 6.1 Environment

-- 6.2 The Impact of Pricing

-- 6.3 Price and Value

-- -- 6.3.1 Price Boundaries

-- -- 6.3.2 Perceived Value

-- 6.4 Price and Demand

-- -- 6.4.1 Linear Demand Curve

-- -- 6.4.2 Constant-Elasticity Demand Curve

-- -- 6.4.3 Logit Demand Curve

-- 6.5 Basic Price Structures

-- -- 6.5.1 Unit Price

-- -- 6.5.2 Market Segmentation

-- -- 6.5.3 Multipart Pricing

-- -- 6.5.4 Bundling

-- 6.6 Demand Prediction

-- -- 6.6.1 Demand Model for Assortment Optimization

-- -- 6.6.2 Demand Model for Seasonal Sales

-- -- -- 6.6.2.1 Demand Data Preparation

-- -- -- 6.6.2.2 Model Specification

-- -- 6.6.3 Demand Prediction with Stockouts

-- 6.7 Price Optimization

-- -- 6.7.1 Price Differentiation

-- -- -- 6.7.1.1 Differentiation with Demand Shifting

-- -- -- 6.7.1.2 Differentiation with Constrained Supply

-- -- 6.7.2 Dynamic Pricing

-- -- -- 6.7.2.1 Markdowns and Clearance Sales

-- -- -- 6.7.2.2 Markdown Price Optimization

-- -- -- 6.7.2.3 Price Optimization for Competing Products

-- -- 6.7.3 Personalized Discounts

-- 6.8 Resource Allocation

-- -- 6.8.1 Environment

-- -- 6.8.2 Allocation with Two Classes

-- -- 6.8.3 Allocation with Multiple Classes

-- -- 6.8.4 Heuristics for Multiple Classes

-- -- -- 6.8.4.1 EMSRa

-- -- -- 6.8.4.2 EMSRb

-- 6.9 Assortment Optimization

-- -- 6.9.1 Store-Layout Optimization

-- -- 6.9.2 Category Management

-- 6.10 Architecture of Price Management Systems

-- 6.11 Summary


A APPENDIX: Dirichlet Distribution


INDEX


BIBLIOGRAPHY