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Predictive Analytics

Decent Essays

Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die is a

good entry-level book into the realm of analysis based on gathered data. The

terminology used is not technical. The writing is humorous, optimistic, and engaging.

The content is eye-opening, insightful, terrifying, and thought-provoking –

simultaneously. Being both informative and enjoyable, the writing style reminded me of

Freakonomics in many ways. Graphic devices such as flow charts, cartoons, diagrams,

data tables, and other illustrations made the information easier to understand. The author

incorporates case studies, anecdotes, literature, quotes, theory, popular culture and other

elements to enhance the entertainment …show more content…

Corporations are observing, gathering, and analyzing our buying

patterns in order to determine our future decisions. This information is used to decide

how to customize advertisements to particular groups of consumers. Insurance

companies based premium rates on accident predictions. Creditors determine the

likelihood of missed payments in order to adjust interest rates.

In an attempt to market baby products, Target famously acquired new customers

by examining the probability of women who may become parents in the near future, and

targeting their specific needs.

In 2008, I was unaware that Netflix offered $1 million to any person or group who

could improve the ability of the company to predict the preferences of customers by

atleast 10 percent. At the time, they had accumulated 100 million ratings from 500,000

subscribers. As the result of their crowdsourcing campaign, 5,169 teams turned in 44,014

entries. Of the two entries free of programming errors that met the criteria, the award

went to the group that submitted 20 minutes earlier. The final product was a combination

of many algorithms to create an “ensemble model.” Ensemble models are able to decide

which models are appropriate to use in specific situations. According to the author, these

techniques can generally add between 5 percent and 30 percent to

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