Class 1

His Intro

  • Purchases are downstream of behavior and the behavior influences the repayment of loans.

Cobra

  • Randomization + observational equivalence
  • slicing
  • Business problem + outcomes

Randomization Check

  • Confound check: If you don’t have randomization, then you can’t isolate a variable. If all high income are in your test group, the high income could affect
  • Large p-values are good when it comes to randomization.
    • The high p value signals that it can’t distinguish from the two
  • He says that biz vs stats significance is v. different and that the absolute percentage, so is something between a 1 and 5% difference between populations matter?

Slice

  • Create segments;
  • Randomize in the large population, then gamer represents measure and instrument everything. Matryoshka doll example
  • Slicing shows us the base rate of control vs. test and it then shows the comparative life for each group.

Business analysis

  • Expected spend per customer that I contact = Spend x response
    • so $75 x #.##%
    • If you offer a discount of $75 to $25 (1/3) then you need an increase of 3x (remember that 200% is 3x)
    • understand the assumptions of our models: Lifetime contract value (if you change that, your multipliers)
      • What are the assumptions underpinning how you think about lifetime contract value and
  • A deeper question being we can’t disentangle the ad from the incentive it offered
  • Set-up your scoreboard before the experiment is ran; simulate the experiment first so that you can look at the results together

Digital Advertising Effects

  • ROAS = total Revenue / Spend on ad
  • iROAS = incremental dollars that otherwise wouldn’t have happened
    • how to get them to switch: Who in the network should you contact; how to enlist expertise; maybe chang ethe terminology? Reject hte premise
      • Velvetta cheese example: It’s not just velvetta cheese… and they’re a part of Kraft… and so Kraft cheese and all Kraft in… So ask what’s in the revenue number
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Class 1