Paper Type
full
Description
Customer scoring models are the core of scalable direct marketing. Uplift models provide an estimate of the incremental benefit from a treatment that is used for operational decision-making. Training and monitoring of uplift models require experimental data. However, the collection of data under randomized treatment assignment is costly, since random targeting deviates from an established targeting policy. To increase the cost-efficiency of experimentation and facilitate frequent data collection and model training, we introduce supervised randomization. Supervised randomization is a novel approach that integrates existing scoring models into randomized trials to target relevant customers, while ensuring consistent estimates of treatment effects through correction for active sample selection. An empirical Monte Carlo study shows that data collection under supervised randomization is cost-efficient, while downstream uplift models perform competitively.
Recommended Citation
Haupt, Johannes; Jacob, Daniel; Gubela, Robin; and Lessmann, Stefan, "Affordable Uplift: Supervised Randomization in Controlled Experiments" (2019). ICIS 2019 Proceedings. 24.
https://aisel.aisnet.org/icis2019/data_science/data_science/24
Affordable Uplift: Supervised Randomization in Controlled Experiments
Customer scoring models are the core of scalable direct marketing. Uplift models provide an estimate of the incremental benefit from a treatment that is used for operational decision-making. Training and monitoring of uplift models require experimental data. However, the collection of data under randomized treatment assignment is costly, since random targeting deviates from an established targeting policy. To increase the cost-efficiency of experimentation and facilitate frequent data collection and model training, we introduce supervised randomization. Supervised randomization is a novel approach that integrates existing scoring models into randomized trials to target relevant customers, while ensuring consistent estimates of treatment effects through correction for active sample selection. An empirical Monte Carlo study shows that data collection under supervised randomization is cost-efficient, while downstream uplift models perform competitively.