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Cross Channel by Zhou Yu Business Analyst Efficient Frontier

Cross channel by r

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I talked about using advanced time series methods to analyze cross channel advertising problems, like attribution analysis, cross channel budge allocation. I added an empirical study to analyze TV advertising and Search Advertising.

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Page 1: Cross channel by r

Cross Channel by

Zhou YuBusiness Analyst Efficient Frontier

Page 2: Cross channel by r

Before Crossing Channels

Single Channel Efficient Frontier

ORGANIC

Natural Search

Google

Email

Cost

Revenue

Page 3: Cross channel by r

Why Crossing Channels

• Interactive Effect• Attribution Analysis• Optimize budget across Channels

Cost

Revenue

TV Spend

SEM Spend

Page 4: Cross channel by r

How to Cross Channels: SVAR Model (Package vars)

11 tt yy Auto Regression

Vector Auto RegressionInteractive Relation ttt YAY

1

SVAR: Contemporary Impact

12111 tttt xyxy

12112 tttt xyyx

),( ttt yxY 1211 ttt xyy

1211 ttt xyx

ttt YAY

1

2

1

1

1

Page 5: Cross channel by r

An Empirical Study• TV Spending• SEM Spending, Clicks• Total Revenue

t

t

t

t

t

t

t

TV

SEM

REV

A

TV

SEM

REV

1

1

1

1321 tttt REVSEMTVREV

Page 6: Cross channel by r

How they interact: Impulse Response Function

Time Period (Weeks) Time Period (Weeks)

Impulse of TV Impulse of Search

SEM

Spend

TV Spend

TV has an effect on search spend while search spend doesn’t have significant effect on TV.

Page 7: Cross channel by r

Prediction

Incorporate two channels’ information to make prediction

Page 8: Cross channel by r

Attribution Analysis: A little Math

SEMTVvenue ReGoal

Model1321

1211

tttt

ttt

REVSEMTVREV

SEMTVSEM

Results

SEMTV

SEMSEMTVTV

REVSEMTVSEMTVREV

tttt

tttttt

12321131

231211321 )(

Page 9: Cross channel by r

Optimal Budget Allocation

ttttt

ttttt

SEMSEMTVTVREV

SEMSEMTVTVREV

231213111

12321131

12323212

11313111

1

)(

)()(

ttt

ttt

tt

SEMSEMSEM

TVTVTV

REVREVREV

131

tTV

REV232

tSEM

REV

Goal ?,

tt SEM

REV

TV

REV

Model

Results

TV Spend

SEM Spend

Page 10: Cross channel by r

Cross Channels by

Thank You!Zhou Yu

Business Analyst Efficient Frontier