29,99 €
In the dynamic world of marketing, the integration of artificial intelligence (AI) and machine learning (ML) is no longer just an advantage—it's a necessity. Moreover, the rise of generative AI (GenAI) helps with the creation of highly personalized, engaging content that resonates with the target audience.
This book provides a comprehensive toolkit for harnessing the power of GenAI to craft marketing strategies that not only predict customer behaviors but also captivate and convert, leading to improved cost per acquisition, boosted conversion rates, and increased net sales.
Starting with the basics of Python for data analysis and progressing to sophisticated ML and GenAI models, this book is your comprehensive guide to understanding and applying AI to enhance marketing strategies. Through engaging content & hands-on examples, you'll learn how to harness the capabilities of AI to unlock deep insights into customer behaviors, craft personalized marketing messages, and drive significant business growth. Additionally, you'll explore the ethical implications of AI, ensuring that your marketing strategies are not only effective but also responsible and compliant with current standards
By the conclusion of this book, you'll be equipped to design, launch, and manage marketing campaigns that are not only successful but also cutting-edge.
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Veröffentlichungsjahr: 2024
Machine Learning and Generative AI for Marketing
Take your data-driven marketing strategies to the next level using Python
Yoon Hyup Hwang
Nicholas C. Burtch
Machine Learning and Generative AI for Marketing
Copyright © 2024 Packt Publishing
All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, without the prior written permission of the publisher, except in the case of brief quotations embedded in critical articles or reviews.
Every effort has been made in the preparation of this book to ensure the accuracy of the information presented. However, the information contained in this book is sold without warranty, either express or implied. Neither the authors, nor Packt Publishing or its dealers and distributors, will be held liable for any damages caused or alleged to have been caused directly or indirectly by this book.
Packt Publishing has endeavored to provide trademark information about all of the companies and products mentioned in this book by the appropriate use of capitals. However, Packt Publishing cannot guarantee the accuracy of this information.
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First published: August 2024
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ISBN: 978-1-83588-940-4
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Yoon Hyup Hwang is a data science and engineering leader who has authored multiple books on applied ML and data science. He has over a decade of experience and expertise in delivering extremely high ROI data products and solutions that result in multi-million-dollar annual recurring revenue and savings across various industries that include finance, insurance, ads and marketing, manufacturing, and supply chain. He holds an MSE degree in Computer and Information Technology from the University of Pennsylvania and a BA in Economics from the University of Chicago.
I would like to start by thanking my beautiful wife, Sunyoung. By sacrificing our weekends and family times so that I could work on writing this book over the past several months, she played a critical role in getting this book done and published.
To my family, I would like to thank you for your consistent love, support, and belief in me. I would not be where I am now without you.
I would also like to thank everyone on my publishing team at Packt who helped me uphold the highest quality standard.
Lastly, I would like to thank everyone reading this book. I hope you enjoy it and find it helpful!
Nicholas C. Burtch, PhD, is a recognized data science researcher and thought leader with over ten years of experience in leading complex, data-driven projects. He has an extensive track record of deploying end-to-end ML solutions for understanding large-scale structured and unstructured data in industries ranging from finance to scientific research. Nick has published dozens of peer-reviewed research articles that have received thousands of citations and is a US patent holder. He received his PhD and MS in Chemical Engineering from the Georgia Institute of Technology and holds a BS in Chemical Engineering from the University of Michigan.
I would like to express my deepest gratitude to the people closest to me who supported me throughout the creation of this book. Your encouragement and understanding have been invaluable. A special thanks to my loved ones for their patience and understanding throughout this journey.
I am also thankful to the Packt Publishing team for their guidance and commitment to excellence.
Finally, to the readers, I hope this book provides you with valuable insights that you can leverage in your own professional journey.
Dr. Na’im R. Tyson is a seasoned data scientist with extensive experience in natural language processing (NLP) and machine learning (ML). He holds a PhD in Linguistics from Ohio State University and an MS in Computational Linguistics from Georgetown University. His expertise spans developing ML models, implementing data ingestion pipelines, and refining NLP applications. Currently an Adjunct Assistant Professor at New York University, Dr. Tyson is passionate about education and holds several patents in language learning systems and keyword extraction methods, focusing on practical applications that drive meaningful results.
Oluwole Fagbohun currently serves as the Vice President of Engineering and Environmental Data at ChangeBlock, where he leads initiatives to combat climate change through innovative ML solutions. He holds a master’s degree in data science, has published several peer-reviewed papers, and is a published author. He is a frequent speaker at multiple conferences and universities and has mentored participants at various hackathons. As the founder of Readrly, an EdTech company, Oluwole leverages AI techniques to enhance children’s reading skills by providing captivating stories from around the globe.
Oluwole is passionate about playing chess and cherishes spending quality time with his family. Originally hailing from Nigeria, he now resides in London with his wife and three children.
I would like to extend my heartfelt gratitude to my wife and children for their unwavering support, now and always. Special thanks to my parents for their enduring love and encouragement.
Konstantin Pikal is a PhD Candidate at LUISS University in Rome, specializing in marketing technologies. With over a decade of experience as a marketing leader, he has developed an expertise in data-driven marketing, data analytics, and content marketing. His research focuses on bridging the gap between marketing research and practical applications, aiming to bring academic insights into real-world marketing strategies and to classrooms around the world.
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Preface
Who this book is for
What this book covers
To get the most out of this book
Get in touch
The Evolution of Marketing in the AI Era and Preparing Your Toolkit
The evolution of marketing with AI/ML
The pre-AI era of marketing
The advent of digital marketing
The integration of AI/ML in marketing
Core data science techniques in marketing
Predictive analytics
Understanding customer data
A/B testing and experimentation
Segmentation and targeting
Customer lifetime value modeling
Integrating AI for enhanced insights
Setting up the Python environment for AI/ML projects
Installing the Anaconda distribution
Installing essential Python libraries for AI/ML
Integrating your environment with JupyterLab
Verifying your setup
Navigating the Jupyter notebook
Training your first ML model
Step 1: Importing the necessary libraries
Step 2: Loading the data
Step 3: Exploratory data analysis
Step 4: Preparing the data for ML
Step 5: Training a model
Step 6: Evaluating the model
Summary
Decoding Marketing Performance with KPIs
Understanding marketing KPIs
Awareness stage
Engagement stage
Conversion stage
Retention stage
Loyalty stage
Computing and visualizing KPIs from data with Python
Conversion rate
Overall conversion rate
Demographics and conversion rate
Sales channel and conversion rate
CLV
Overall CLV
Geolocation and CLV
Product and CLV
CPA
Overall CPA
Sales channel and CPA
Promotions and CPA
ROI
Overall ROI
ROI per sales channel
ROI per promotion
Correlations across KPIs
Tracking marketing performance with KPIs
Choosing the right visualization for KPIs
Ongoing KPI tracking
Summary
Unveiling the Dynamics of Marketing Success
Why people engage in regression analysis
Target variable
Continuous variables
Categorical variables
Factorize
Categorical
Dummy variables
Regression analysis
Interaction variables
Why people convert with decision tree interpretation
Target variable
Continuous versus categorical variable
Decision tree analysis
Why people churn with causal inference
Causal effect estimation
Causal model
Estimation
Refutation
Graphical causal model
Causal influence
Anomaly attribution
Summary
Harnessing Seasonality and Trends for Strategic Planning
Time series analysis basics
Basic time series trends
Moving averages
Autocorrelation
Product trends
Trend and seasonality decomposition
Additive time series decomposition
Multiplicative time series decomposition
Time series forecasting models
ARIMA
Training the ARIMA model
ARIMA model diagnostics
Forecasting with the ARIMA model
Prophet time-series modeling
Training a Prophet model
Forecasting with a Prophet model
Other time-series models
Summary
Enhancing Customer Insight with Sentiment Analysis
Introduction to sentiment analysis in marketing
The significance of sentiment analysis
Advancements in AI and sentiment analysis
Practical example: Twitter Airline Sentiment dataset
Preparing data for sentiment analysis
Traditional NLP techniques for data preparation
Cleaning text data
Tokenization and stop word removal
Lemmatization
Class imbalance
Evaluating class balance
Addressing class imbalance
GenAI for data augmentation
Performing sentiment analysis
Building your own ML model
Feature engineering
Model training
Model evaluation
Classification report
Using pre-trained LLMs
Implementing pre-trained models
Evaluating model performance
Translating sentiment into actionable insights
Creating your own dataset
Collecting twitter data
Collecting data from other platforms
Performing NER on a dataset for a fictional retailer
Understanding topics and themes
Using word clouds
Discovering latent topics with LDA
Temporal trends: tracking the brand narrative
Mapping sentiments using geospatial analysis
Summary
Leveraging Predictive Analytics and A/B Testing for Customer Engagement
Predicting customer conversion with tree-based algorithms
Tree-based machine learning algorithms
Building random forest models
Target and feature variables
Training a random forest model
Predicting and evaluating random forest model
Gradient boosted decision tree (GBDT) modeling
Training GBDT model
Predicting and Evaluating GBDT Model
Predicting customer conversion with deep learning algorithms
Train and test sets for deep learning models
Wide neural network modeling
Training the wide neural network model
Predicting and evaluating wide neural network model
Deep neural network modeling
Training deep neural network model
Predicting and evaluating the deep neural network model
Conducting A/B testing for optimal model choice
Simulating A/B Testing
Two-tailed T-test
Summary
Personalized Product Recommendations
Product analytics with market basket analysis
Apriori algorithm – finding frequent itemsets
Association rules
Collaborative filtering
User-based collaborative filtering
Recommending by the most similar customer
Recommending by the top products bought by similar customers
Item-based collaborative filtering
Recommending by the most similar items
Recommending by the purchase history
Other frequently used recommendation methods
Summary
Segmenting Customers with Machine Learning
One-time versus repeat customers
The need to retain customers
Analyzing the impact of retaining customers
Customer segmentation with purchase behaviors
K-means clustering
Without log transformation
With log transformation
Silhouette score
Customer segmentation with product interests
Summary
Creating Compelling Content with Zero-Shot Learning
Fundamentals of generative AI
A probabilistic approach
Foundational models
Generative adversarial networks
Variational autoencoders
Long short-term memory networks
Transformers
When GenAI is the right fit
Introduction to pre-trained models and ZSL
Contextual embeddings
Semantic proximity
Pre-trained models
Model weights
Model architecture
Preprocessing steps
Zero-shot learning
Mechanics of learning and prediction
Output parameters
ZSL for marketing copy
Preparing for ZSL in Python
Creating an effective prompt
Example 1: Product descriptions
Example 2: Blog post titles
Example 3: Social media captions
Impact of parameter tuning
Summary
Enhancing Brand Presence with Few-Shot Learning and Transfer Learning
Navigating FSL
Understanding FSL through meta-learning
Implementing model-agnostic meta-learning in marketing
Overcoming challenges in FSL
Navigating transfer learning
The mechanics of transfer learning
Transfer learning using Keras
Transfer learning using API services
Overcoming challenges in transfer learning
Applying FSL to improve brand consistency
Benchmarking with ZSL and FSL
Developing an email marketing campaign
Step 1: Initial email creation
Step 2: Collect and analyze initial metrics and responses
Step 3: Iterative refinement
Step 4: Continued feedback integration
Summary
Micro-Targeting with Retrieval-Augmented Generation
Introduction to RAG for precision marketing
How RAG works
Mathematical model of RAG retrieval
The importance of data in RAG
Data freshness
Data specificity
Understanding the retrieval index
Indexing strategies
Data curation and updating
RAG implementation challenges
Applications of RAG in marketing
Building a knowledge retrieval system for marketing with LangChain
Introduction to LangChain
Understanding the external dataset
Designing the retrieval model with LangChain
Install and connect to Elasticsearch
Indexing data in Elasticsearch
Data ingestion into Elasticsearch
Integrating with LangChain using GPT
Implementing RAG for micro-targeting based on customer data
Determining the campaign strategy
Message timing
Choosing the brand
Using LangChain for micro-targeting
Case study 1: Targeted product discounts
Case study 2: Product upselling
Case study 3: Real-time content customization for bpw.style
Summary
The Future Landscape of AI and ML in Marketing
Consolidating key AI and ML concepts
Next-generation AI technologies in marketing
From RAG to ReAct
How ReAct works
Applications in marketing
Model architecture advances
Diffusion models
Neural radiance fields
Capsule networks
Multi-modal GenAI
Technical foundations
Multi-modal applications
AR and VR as emerging digital platforms
The role of ML in AR for marketing
Personalized AR experiences
Geolocation-based AR campaigns
Seamless product integration
The role of ML in VR for marketing
Immersive storytelling and brand experiences
Behavioral data insights
Virtual storefronts and events
Summary
Ethics and Governance in AI-Enabled Marketing
Ethical considerations in AI/ML for marketing
Model transparency and explainability
Model explainability tools
Bias mitigation
Addressing training data bias
Algorithmic fairness techniques
Diversity in model evaluation data
Grounding for LLMs
Chain-of-thought reasoning
Balancing privacy with personalization
Federated learning
Differential privacy and anonymization
Governance and regulatory compliance
Intellectual property protection
Data and model licensing and attribution
Internal data ownership and security
Data management and collection practices
Ethical governance frameworks
Internal AI ethics committees
AI policy development and reporting
Continuous training and awareness
Regulatory compliance
General Data Protection Regulation (GDPR)
California Consumer Privacy Act (CCPA)
Global regulations and standards
Industry-specific guidelines
Summary
Other Books You May Enjoy
Index
Cover
Index
In the dynamic world of marketing, the integration of artificial intelligence (AI) and machine learning (ML) is no longer just an advantage—it’s a necessity. AI/ML integration in marketing strategies represents a paradigm shift towards more data-driven, efficient, and impactful marketing practices. With the emergence of data science, businesses can now gain an in-depth understanding of the mechanics of their marketing successes and failures, understanding customer behaviors and interactions with unprecedented clarity. Moreover, the rise of generative AI (GenAI) is creating new opportunities for the facile creation of highly personalized, engaging content that resonates with the target audience on a whole new level. This book provides a comprehensive toolkit for harnessing the power of ML and GenAI to craft marketing strategies that not only predict customer behaviors but also captivate and convert, leading to improved cost per acquisition, boosted conversion rates, and increased net sales.
Starting with the basics of Python for data analysis and progressing to more sophisticated ML and GenAI models, this book is your comprehensive guide to understanding and applying AI to enhance marketing strategies. We will use hands-on examples to show you how you can harness the capabilities of AI to unlock deep insights into customer behaviors, craft personalized marketing messages, and drive significant business growth. We’ll also explore the ethical implications of AI, which will help you ensure that your marketing strategies are not only effective but also responsible and compliant with current standards.
By the conclusion of this book, you will have gained a robust understanding of various data science, ML, and GenAI techniques tailored specifically for marketing. Armed with this knowledge, you will be equipped to design, launch, and manage marketing campaigns that are not just successful but also cutting-edge, ensuring your business remains at the forefront of the digital marketing revolution.
This book targets a diverse group of professionals at the intersection of technology and marketing, including:
Marketing professionals at any level seeking to leverage AI/ML for data-driven decision-making and enhance their customer engagement strategiesData scientists and analysts in the marketing domain looking to apply advanced AI/ML techniques to solve real-world marketing challengesML engineers and software developers aiming to build or integrate AI-driven tools and applications for marketing purposesBusiness leaders and entrepreneurs who must understand the impact of AI on marketing to drive innovation and maintain their competitive advantage in today’s landscapeEach reader is presumed to have a foundational proficiency in Python programming and a basic to intermediate grasp of ML principles and data science methodologies. They are likely already in or aspire to be in roles where the application of AI/ML directly influences marketing outcomes and business strategies.
Chapter 1, The Evolution of Marketing in the AI Era and Preparing Your Toolkit, explores the evolution of marketing in the AI era, core AI/ML techniques shaping marketing’s future, and setting up a Python environment for marketing projects.
Chapter 2, Decoding Marketing Performance with KPIs, explains that every data-driven or AI/ML-driven marketing strategy starts with optimization and enhancement goals tied to key performance metrics (KPIs). Understanding and analyzing these KPIs is critical for evaluating the effectiveness of marketing campaigns and strategies. This chapter discusses how to identify and compute crucial marketing KPIs, leveraging them for explanatory data analysis, and using these insights to drive marketing decisions.
Chapter 3, Unveiling the Dynamics of Marketing Success, investigates the underlying dynamics contributing to marketing success. By utilizing data science and AI/ML techniques, you can gain deep insights into the factors driving successful marketing campaigns. The topics covered include analyzing customer interactions, identifying successful marketing patterns, and optimizing strategies based on data-driven insights.
Chapter 4, Harnessing Seasonality and Trends for Strategic Planning, discusses seasonality and trends, which play a vital role in shaping marketing strategies. This chapter focuses on leveraging AI/ML to identify and capitalize on predictable fluctuations in consumer behavior and market dynamics. By understanding these patterns, you can strategically plan and execute campaigns that align with consumer interests and market conditions.
Chapter 5, Enhancing Customer Insight with Sentiment Analysis, discusses customer sentiment, which is a valuable indicator of brand perception and customer satisfaction. This chapter explores how sentiment analysis, powered by AI/ML, can enhance customer insights. You will learn how to analyze customer feedback, reviews, and social media interactions to tailor your strategies to improve customer experience and engagement.
Chapter 6, Leveraging Predictive Analytics and A/B Testing for Customer Engagement, covers predictive analytics and A/B testing, which are essential tools for enhancing customer engagement. This chapter explains how to use AI/ML models to predict customer behavior and engagement levels. It also covers the design and execution of effective A/B tests to optimize marketing decisions and improve user experiences.
Chapter 7, Personalized Product Recommendations, explores personalized product recommendations, which significantly enhance the likelihood of purchase by aligning offerings with customer preferences and behaviors. This chapter covers various techniques for generating personalized recommendations, including market basket analysis, collaborative filtering, and other recommendation methods.
Chapter 8, Segmenting Customers with Machine Learning, discusses customer segmentation, which is a critical aspect of targeted marketing. This chapter discusses using ML to segment customers based on various factors, such as purchase behavior, demographics, and interests. It covers techniques like K-means clustering and leveraging large language models (LLMs) for deeper customer segmentation insights.
Chapter 9, Creating Compelling Content with Zero-Shot Learning, introduces zero-shot learning (ZSL), a technique that allows AI models to generate relevant marketing content without prior direct examples. ZSL enhances creativity and speed, allowing you to produce content for new categories and contexts using learned patterns and knowledge extrapolation. You will find practical examples and best practices for integrating ZSL into marketing strategies, showcasing how to create dynamic content for product descriptions, blog posts, and social media.
Chapter 10, Enhancing Brand Presence with Few-Shot Learning and Transfer Learning, covers few-shot learning (FSL), which is a method that’s used to adapt AI models to new tasks using only a small number of labeled examples.
This chapter covers the principles of FSL, including meta-learning, which enable models to generalize effectively to new scenarios. The practical examples demonstrate how you can apply FSL to marketing campaigns, emphasizing its importance in capturing nuanced aspects of brand ethos and refining marketing strategies based on customer feedback.
Chapter 11, Micro-Targeting with Retrieval-Augmented Generation, this chapter explores retrieval-augmented generation (RAG) as a tool for precision marketing, combining GenAI with real-time information retrieval. This hybrid approach allows the creation of highly personalized content by accessing and incorporating current data during the generation process. This chapter details RAG’s operational framework and its application in micro-targeting, showcasing how it can improve consumer engagement and conversion by providing contextually appropriate and accurate content.
Chapter 12, The Future Landscape of AI and ML in Marketing, consolidates key AI and ML concepts from previous chapters and discusses their future applications in marketing. It covers emerging technologies such as multi-modal GenAI, advanced model architectures, and the integration of AI with augmented and virtual reality. These advancements promise to create more dynamic, responsive, and personalized marketing strategies. This chapter provides insights into how these technologies will shape the future of marketing, enabling more immersive consumer experiences and innovative marketing practices.
Chapter 13, Ethics and Governance in AI-Enabled Marketing, addresses the ethical considerations and governance challenges associated with AI technologies in marketing. It explores data privacy, algorithmic bias, and the need for transparency, emphasizing their impact on consumer trust and brand integrity. The chapter also covers major regulatory frameworks such as GDPR and CCPA, providing strategies for responsible AI deployment, model transparency, and compliance. Finally, it discusses practical guidelines for mitigating bias, ensuring data privacy, and establishing robust governance structures to promote ethical AI use in marketing.
To maximize the benefits of this book, it is recommended that you have basic familiarity with Python. However, the book is structured to accommodate a wide range of expertise levels, from beginners to advanced practitioners. Here are a few tips to help you get the most out of this book:
Engage with the code examples: Practical examples are provided throughout the book to illustrate key concepts. Actively engaging with these examples by running the code and experimenting with variations will deepen your understanding and enhance your skills.Apply the knowledge: Try to apply the techniques and strategies discussed in the book to your own marketing projects. This practical application will help reinforce the concepts and demonstrate their real-world relevance.Stay updated: The fields of AI and ML are rapidly evolving. Staying up to date with the latest advancements, tools, and best practices through continuous learning and professional development will ensure that you remain at the forefront of this exciting domain.The line graphs in this book may look slightly different from those generated by the provided code. This is because the graphs have been optimized to ensure clarity and ease of understanding; feel free to play around with visualization to achieve the type of outcome you need!
The code bundle for the book is hosted on GitHub at https://github.com/PacktPublishing/Machine-Learning-and-Generative-AI-for-Marketing. We also have other code bundles from our rich catalog of books and videos available at https://github.com/PacktPublishing/. Check them out!
We also provide a PDF file that has color images of the screenshots/diagrams used in this book. You can download it here: https://packt.link/gbp/9781835889404.
There are a number of text conventions used throughout this book.
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