2.2

Targeting

The Limits & Biases of Predictive Marketing

Let's go!

Topic 2.2 The Limits & Biases of Predictive Marketing

Learning Goals

Understand the limitations of predictive models, including their reliance on past data and inability to foresee sudden changes.

Identify how endogeneity and biases can affect model outcomes and create self-fulfilling predictions.

Apply strategies to mitigate predictive pitfalls, using human judgment, experimentation, and ethical data practices.

Topic 2.2 The Limits & Biases of Predictive Marketing

Outline

Learning Goals

Pitfall #1: We can only predict the past

Pitfall #2: Endogeneity & Biases

Activities

Topic 2.2 The Limits & Biases of Predictive Marketing

Pitfall #1: we can only predict the past

Every predictive model is built on history, not foresight. That means our forecasts are projections of what has already happened—not guarantees of what’s ahead.

Topic 2.2 The Limits & Biases of Predictive Marketing

Did you know...

100%

of predictive marketing models trained on 2019 data failed to anticipate the sudden changes in 2020? Past behavior alone can’t predict the future!

Topic 2.2 The Limits & Biases of Predictive Marketing

Videos

The videos will allow you to explore the topics covered in this module in greater depth. Feel free to keep a notepad handy to jot down key points of interest to share during live sessions.

Go

Topic 2.2 The Limits & Biases of Predictive Marketing

Pitfall #1: we can only predict the past

Topic 2.2 The Limits & Biases of Predictive Marketing

Test yourself!

Quick exercise on the video you've just seen.

Topic 2.2 The Limits & Biases of Predictive Marketing

1/3

Topic 2.2 The Limits & Biases of Predictive Marketing

2/3

Topic 2.2 The Limits & Biases of Predictive Marketing

3/3

Topic 2.2 The Limits & Biases of Predictive Marketing

Pitfall #2: endogeneity and biases

Endogeneity occurs when our own decisions influence the very outcomes we’re trying to predict, creating biased and self-fulfilling models.

Topic 2.2 The Limits & Biases of Predictive Marketing

Did you know...

100%

of predictive models can fall into self-fulfilling loops if decisions influence the outcomes they try to predict? Endogeneity can turn predictions into reality!

Topic 2.2 The Limits & Biases of Predictive Marketing

Pitfall #2: endogeneity and biases

Topic 2.2 The Limits & Biases of Predictive Marketing

Test yourself!

Quick exercise on the video you've just seen.

Topic 2.2 The Limits & Biases of Predictive Marketing

1/3

Topic 2.2 The Limits & Biases of Predictive Marketing

2/3

Topic 2.2 The Limits & Biases of Predictive Marketing

3/3

Topic 2.2 The Limits & Biases of Predictive Marketing

Chapter completed!

Let's move on to Group Activityby pressing Exit Activity.