TITLE:
Recommender Systems as a Mobile Marketing Service
AUTHORS:
Donald J. Kridel, Daniel R. Dolk, David Castillo
KEYWORDS:
Marketing Service; Predictive Analytics; Recommender Systems; Collaborative Filtering; Similarity Measures; Euclidean Distance; Cosine Distance; Pearson Correlation; Recommender System Generator; Adaptive Modeling; Customer Targeting
JOURNAL NAME:
Journal of Service Science and Management,
Vol.6 No.5A,
December
31,
2013
ABSTRACT:
Recommender systems (RSs) have become a familiar artifact in cyberspace as a vehicle for increasing revenues while deepening customer loyalty and satisfaction. Typically RS are developed in house by companies with a large product line and customer base. However, the structure of RS is often straightforward, and effective systems can be developed at relatively low cost, and thus offered as a marketing service. We discuss the anatomy of a specific recommender system designed for a telecommunication carrier which uses predictive analytics in the form of collaborative filtering techniques to recommend products to users. Collaborative filtering (CF) is based upon the premise that users who have purchased a particular product will have similar preferences to other users who also purchased the product. We discuss and compare three versions of a CF-based recommender system based upon customer purchase history, customer browsing history, and user segments respectively. The results in terms of increased sales suggest that RS offer substantial value as a mobile marketing service. We suggest ways in which RS can be generalized into RS generators for more rapid development and deployment. We then invert the RS perspective from product-centric to user-centric and suggest how this would work in customer targeting for mobile advertising campaigns. We conclude that RS in the largest sense are heavily model-feedback in nature and require increasingly sophisticated automated modeling and predictive analytics capabilities layered on a scalable big data infrastructure.