CausalMMM: Learning Causal Structure for Marketing Mix Modeling

• URL: http://arxiv.org/abs/2406.16728v1
• Date: Mon, 24 Jun 2024 15:33:47 GMT
• Title: CausalMMM: Learning Causal Structure for Marketing Mix Modeling
• Abstract summary: In online advertising, marketing mix modeling (MMM) is employed to predict the gross merchandise volume (GMV) of brand shops. Traditional MMM methods leveraging regression techniques can fail in handling the complexity of marketing. We propose CausalMMM that integrates Granger causality in a variational inference framework to measure the causal relationships between different channels.
• Score: 18.093564060157394
• License: http://arxiv.org/licenses/nonexclusive-distrib/1.0/
• Abstract: In online advertising, marketing mix modeling (MMM) is employed to predict the gross merchandise volume (GMV) of brand shops and help decision-makers to adjust the budget allocation of various advertising channels. Traditional MMM methods leveraging regression techniques can fail in handling the complexity of marketing. Although some efforts try to encode the causal structures for better prediction, they have the strict restriction that causal structures are prior-known and unchangeable. In this paper, we define a new causal MMM problem that automatically discovers the interpretable causal structures from data and yields better GMV predictions. To achieve causal MMM, two essential challenges should be addressed: (1) Causal Heterogeneity. The causal structures of different kinds of shops vary a lot. (2) Marketing Response Patterns. Various marketing response patterns i.e., carryover effect and shape effect, have been validated in practice. We argue that causal MMM needs dynamically discover specific causal structures for different shops and the predictions should comply with the prior known marketing response patterns. Thus, we propose CausalMMM that integrates Granger causality in a variational inference framework to measure the causal relationships between different channels and predict the GMV with the regularization of both temporal and saturation marketing response patterns. Extensive experiments show that CausalMMM can not only achieve superior performance of causal structure learning on synthetic datasets with improvements of 5.7%\sim 7.1%, but also enhance the GMV prediction results on a representative E-commerce platform.

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