Machine Learning Framework

Use Case: Sales prediction based on money spent on different marketing platforms like Television, Radio, and Newspaper.

We are going to explain the above use case using components of Machine Learning decision-making building blocks are as follows:

1. Understanding the data:

In this step we are going to perform the following steps:

  • Finalize the independent and dependent variable. In this case, our dependent variable is “Sales” and the independent variable is money spent on different marketing platforms such as “Television”, “Radio” and “Newspaper”.
  • Then we will perform exploratory data analytics(EDA). This will help us to deep dive into the data, and we understand our data well. An example can be seen below where we visualize the dependent variable(Sales) with respect to the independent variable(Television, Radio, Newspaper):

We can observe that increase in money spent on television increases the sales but the radio and newspapers have mixed performance.

2. Predicting what will happen :

We have observed from the exploratory data analysis that this is a supervised learning regression problem as value to be predicted is “Sales” which is a continuous value. We will develop a linear regression model and predict the “Sales” as per money spent on different marketing platforms like “Television”, “Newspaper”, and “Radio”. 

3. Determining what to do :

In this step, we will try to find a balance between exploration and exploitation. We will explore new marketing platforms. In this use case, we can find new marketing platforms like Youtube ads, Facebook ads, and advertisements on other websites. We can perform exploitation by spending money for a month on new marketing platforms.

4. Determining what caused the outcome :

In this step, we will understand what went well and what went wrong. We will validate the impact of “Sales” when spent on the new marketing platform. If we will observe hike in “Sales” then we will change the marketing spending policy and try to spend more money on marketing platforms increasing “Sales”.  Also, we will explore more marketing platforms which can result in the increase of “Sales”.

References: 

[1] Kaggle: https://www.kaggle.com/ashydv/advertising-dataset (Links to an external site.) [2] EDA: https://medium.com/@purnasaigudikandula/exploratory-data-analysis-beginner-univariate-bivariate-and-multivariate-habberman-dataset-2365264b751

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