Mining the Network Value of Customers

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Mining the Network Value of Customers (2002)

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by Pedro Domingos , Matt Richardson

Venue:	In Proceedings of the Seventh International Conference on Knowledge Discovery and Data Mining
Citations:	568 - 11 self

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@INPROCEEDINGS{Domingos02miningthe,
    author = {Pedro Domingos and Matt Richardson},
    title = {Mining the Network Value of Customers},
    booktitle = {In Proceedings of the Seventh International Conference on Knowledge Discovery and Data Mining},
    year = {2002},
    pages = {57--66},
    publisher = {ACM Press}
}

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Abstract

One of the major applications of data mining is in helping companies determine which potential customers to market to. If the expected pro t from a customer is greater than the cost of marketing to her, the marketing action for that customer is executed. So far, work in this area has considered only the intrinsic value of the customer (i.e, the expected pro t from sales to her). We propose to model also the customer's network value: the expected pro t from sales to other customers she may inuence to buy, the customers those may inuence, and so on recursively. Instead of viewing a market as a set of independent entities, we view it as a social network and model it as a Markov random eld. We show the advantages of this approach using a social network mined from a collaborative ltering database. Marketing that exploits the network value of customers|also known as viral marketing|can be extremely eective, but is still a black art. Our work can be viewed as a step towards providing a more solid foundation for it, taking advantage of the availability of large relevant databases. Categories and Subject Descriptors H.2.8 [Database Management]: Database Applications| data mining

Keyphrases

network value expected pro social network viral marketing solid foundation database application data mining independent entity large relevant database major application database management marketing action collaborative ltering database black art data mining subject descriptor intrinsic value potential customer markov random eld

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