Data Mining

Yeow Wei Choong

Anne Laurent
Why Mine Data? Commercial Viewpoint

● Lots of data is being collected

and warehoused
– Web data, e-commerce
– purchases at department/
grocery stores
– Bank/Credit Card
transactions
Why Mine Data? Commercial Viewpoint

● Computers have become cheaper and more powerful

Why Mine Data? Commercial Viewpoint

● Competitive Pressure is Strong

– Provide better, customized services for an edge (e.g. in
Customer Relationship Management)
Why Mine Data? Scientific Viewpoint

● Data collected and stored at

enormous speeds (TB/hour)
– remote sensors on a satellite
– telescopes scanning the skies
– microarrays generating gene
expression data
– scientific simulations
generating terabytes of data
● Traditional techniques infeasible for raw data
● Data mining may help scientists
– in classifying and segmenting data
– in Hypothesis Formation
Why Mine Data? Scientific Viewpoint

● Data collected and stored at

enormous speeds (TB/hour)
– remote sensors on a satellite
– telescopes scanning the skies
– microarrays generating gene
expression data
– scientific simulations
generating terabytes of data
● Traditional techniques infeasible for raw data
● Data mining may help scientists
– in classifying and segmenting data
– in Hypothesis Formation
Why Mine Data? Scientific Viewpoint

● Data collected and stored at

enormous speeds (TB/hour)
– remote sensors on a satellite
– telescopes scanning the skies
– microarrays generating gene
expression data
– scientific simulations
generating terabytes of data
● Traditional techniques infeasible for raw data
● Data mining may help scientists
– in classifying and segmenting data
– in Hypothesis Formation
Mining Large Data Sets - Motivation
● There is often information “hidden” in the data that is
not readily evident
● Human analysts may take weeks to discover useful
information
● Much of the data is never analyzed at all
What is Data Mining?
● Many Definitions
– Non-trivial extraction of implicit, previously unknown
and potentially useful information from data
– Exploration & analysis, by automatic or
semi-automatic means, of
large quantities of data
in order to discover
meaningful patterns
What is (not) Data Mining?

●What is not Data ● What is Data Mining?

Mining?

– Look up phone – Certain names are more

number in phone prevalent in certain US
directory locations (O’Brien, O’Rurke,
O’Reilly… in Boston area)
– Query a Web – Group together similar
search engine for documents returned by
information about search engine according to
“Amazon” their context (e.g. Amazon
rainforest, Amazon.com,)
Origins of Data Mining

● Draws ideas from machine learning/AI, pattern

recognition, statistics, and database systems
● Traditional Techniques
may be unsuitable due to
Statistics/ Machine Learning/
– Enormity of data AI Pattern
Recognition
– High dimensionality
of data Data Mining
– Heterogeneous,
distributed nature Database
of data systems
 Knowledge Discovery Process

PaDern  Evalua;on  
◦ Data  mining:  the  core  of  
knowledge  discovery  process.  
Data  Mining  

Task-­‐relevant  Data  

Data  Warehouse   Selec;on  

Data  Cleaning  

Data  Integra;on  

Databases   13
Data Mining Tasks

● Prediction Methods
– Use some variables to predict unknown or
future values of other variables. Earthquakes
Volcano Eruptions
Stock Market Crash
Weather Forecast
● Description Methods
– Find human-interpretable patterns that
describe the data.
Land Description
Gene Description
Lifestyle Description
Demographic Description
Data Mining Tasks...

● Classification [Predictive]
● Clustering [Descriptive]
● Association Rule Discovery [Descriptive]
● Sequential Pattern Discovery [Descriptive]
● Regression [Predictive]
● Deviation Detection [Predictive]
Classification: Definition

● Given a collection of records (training set )

– Each record contains a set of attributes, one of the
attributes is the class.
● Find a model for class attribute as a function
of the values of other attributes.
● Goal: previously unseen records should be
assigned a class as accurately as possible
 Classification Example
Attributes

Tid Refund Marital Taxable Refund Marital Taxable

Status Income Cheat Status Income Cheat

1 Yes Single 125K No No Single 75K ?

2 No Married 100K No Yes Married 50K ?
3 No Single 70K No No Married 150K ?
Accuracy
4 Yes Married 120K No Yes Divorced 90K ?
5 No Divorced 95K Yes No Single 40K ?
6 No Married 60K No No Married 80K ? Test
7 Yes Divorced 220K No
10

Set

8 No Single 85K Yes

No
9 No Married 75K Learn
Training
10 No Single 90K Yes Model
10

Set Classifier

Model Contruction
Classification: Application 1

● Direct Marketing
– Goal: Reduce cost of mailing by targeting a set of
consumers likely to buy a new cell-phone product.
– Approach:
u Use the data for a similar product introduced before.
u We know which customers decided to buy and which
decided otherwise. This {buy, don’t buy} decision forms the
class attribute.
u Collectvarious demographic, lifestyle, and company-
interaction related information about all such customers.
– Type of business, where they stay, how much they earn, etc.
u Use
this information as input attributes to learn a classifier
model.
Classification: Application 2

● Fraud Detection
– Goal: Predict fraudulent cases in credit card
transactions.
– Approach:
u Usecredit card transactions and the information on its
account-holder as attributes.
– When does a customer buy, what does he buy, how often he pays on
time, etc
u Label past transactions as fraud or fair transactions. This
forms the class attribute.
u Learn a model for the class of the transactions.

u Use this model to detect fraud by observing credit card

transactions on an account.
Classification: Application 3

● Customer Attrition/Churn:
– Goal: To predict whether a customer is likely to
be lost to a competitor.
– Approach:
u Use detailed record of transactions with each of the
past and present customers, to find attributes.
– How often the customer calls, where he calls, what time-of-the
day he calls most, his financial status, marital status, etc.
u Label the customers as loyal or disloyal.
u Find a model for loyalty.
Classification: Application 4

● Sky Survey Cataloging

– Goal: To predict class (star or galaxy) of sky objects,
especially visually faint ones, based on the telescopic
survey images (from Palomar Observatory).
– 3000 images with 23,040 x 23,040 pixels per image.
– Approach:
u Segment the image.
u Measure image attributes (features) - 40 of them per object.
u Model the class based on these features.

u Success Story: Could find 16 new high red-shift quasars,

some of the farthest objects that are difficult to find!
Classification: Algorithms

● Baseline
● Naïve Bayes
● Knn
● Neural Networks
● Decision Trees
Classification: Quality Measures

– A test set is used to determine the accuracy of the

model. Usually, the given data set is divided into
training and test sets, with training set used to build
the model and test set used to validate it
– Other measures should be used:
u Precision
u Recall
Classifying Galaxies
Courtesy: http://aps.umn.edu

Early Class: Attributes:

• Stages of Formation • Image features,
• Characteristics of light
waves received, etc.
Intermediate

Late

Data Size:
• 72 million stars, 20 million galaxies
• Object Catalog: 9 GB
• Image Database: 150 GB
Clustering Definition

● Given a set of data points, each having a set of

attributes, and a similarity measure among them,
find clusters such that
– Data points in one cluster are more similar to
one another.
– Data points in separate clusters are less
similar to one another.
● Similarity Measures:
– Euclidean Distance if attributes are
continuous.
– Other Problem-specific Measures.
Illustrating Clustering

❘ Euclidean Distance Based Clustering in 3-D space.

Intracluster distances Intercluster distances

are minimized are maximized
Clustering: Application 1

● Market Segmentation:
– Goal: subdivide a market into distinct subsets of
customers where any subset may conceivably be
selected as a market target to be reached with a
distinct marketing mix.
– Approach:
u Collect different attributes of customers based on their
geographical and lifestyle related information.
u Find clusters of similar customers.

u Measure the clustering quality by observing buying patterns

of customers in same cluster vs. those from different
clusters.
Clustering: Application 2

● Document Clustering:
– Goal: To find groups of documents that are
similar to each other based on the important
terms appearing in them.
– Approach: To identify frequently occurring
terms in each document. Form a similarity
measure based on the frequencies of different
terms. Use it to cluster.
– Gain: Information Retrieval can utilize the
clusters to relate a new document or search
term to clustered documents.
Illustrating Document Clustering

● Clustering Points: 3204 Articles of Los Angeles Times.

● Similarity Measure: How many words are common in
these documents (after some word filtering).
Category Total Correctly
Articles Placed
Financial 555 364

Foreign 341 260

National 273 36

Metro 943 746

Sports 738 573

Entertainment 354 278

 Clustering of S&P 500 Stock Data
• Observe Stock Movements every day.
• Clustering points: Stock-{UP/DOWN}
• Similarity Measure: Two points are more similar if the
events described by them frequently happen together on
the same day.
• We used association rules to quantify a similarity measure.

Discovered Clusters Industry Group

1
Applied-Matl-DOW N,Bay-Net work-Down,3-COM-DOWN,
Cabletron-Sys-DOWN,CISCO-DOWN,HP-DOWN,
DSC-Co mm-DOW N,INTEL-DOWN,LSI-Logic-DOWN,
Micron-Tech-DOWN,Texas-Inst-Down,Tellabs-Inc-Down,
Technology1-DOWN
Natl-Semiconduct-DOWN,Oracl-DOWN,SGI-DOW N,
Sun-DOW N

2
Apple-Co mp-DOW N,Autodesk-DOWN,DEC-DOWN,
ADV-M icro-Device-DOWN,Andrew-Corp-DOWN,
Co mputer-Assoc-DOWN,Circuit-City-DOWN,
Technology2-DOWN
Co mpaq-DOWN, EM C-Corp-DOWN, Gen-Inst-DOWN,
Motorola-DOW N,Microsoft-DOWN,Scientific-Atl-DOWN

3
Fannie-Mae-DOWN,Fed-Ho me-Loan-DOW N,
MBNA-Corp -DOWN,Morgan-Stanley-DOWN Financial-DOWN

4
Baker-Hughes-UP,Dresser-Inds-UP,Halliburton-HLD-UP,
Louisiana-Land-UP,Phillips-Petro-UP,Unocal-UP, Oil-UP
Schlu mberger-UP
Association Rule Discovery: Definition

● Given a set of records each of which contain some

number of items from a given collection;
– Produce dependency rules which will predict
occurrence of an item based on occurrences of other
items.
TID Items
1 Bread, Coke, Milk
Rules Discovered:
2 Beer, Bread {Milk} --> {Coke}
3 Beer, Coke, Diaper, Milk {Diaper, Milk} --> {Beer}
4 Beer, Bread, Diaper, Milk
5 Coke, Diaper, Milk
Association Rule Discovery: Application 1

● Marketing and Sales Promotion:

– Let the rule discovered be
{Bagels, … } --> {Potato Chips}
– Potato Chips as consequent => Can be used to
determine what should be done to boost its sales.
– Bagels in the antecedent => Can be used to see
which products would be affected if the store
discontinues selling bagels.
– Bagels in antecedent and Potato chips in consequent
=> Can be used to see what products should be sold
with Bagels to promote sale of Potato chips!
Association Rule Discovery: Application 2

● Supermarket shelf management.

– Goal: To identify items that are bought
together by sufficiently many customers.
– Approach: Process the point-of-sale data
collected with barcode scanners to find
dependencies among items.
Diaper, Beer = 3
Association Rule Discovery: Application 2

● Supermarket shelf management.

– A classic rule --
u If a customer buys diaper and milk, then he is very
likely to buy beer.
u So, don’t be surprised if you find six-packs stacked
next to diapers!
Association Rule Discovery: Application 3

● Inventory Management:
– Goal: A consumer appliance repair company wants to
anticipate the nature of repairs on its consumer
products and keep the service vehicles equipped with
right parts to reduce on number of visits to consumer
households.
– Approach: Process the data on tools and parts
required in previous repairs at different consumer
locations and discover the co-occurrence patterns.
 Basic Concepts: Frequent Patterns
and Association Rules
Transaction-id Items bought
● Itemset X = {x1, …, xk}
10 A, B, D
● Find all the rules X à Y with minimum
20 A, C, D
support and confidence
30 A, D, E
– support, s, probability that a
40 B, E, F
50 B, C, D, E, F
transaction contains X ∪ Y
– confidence, c, conditional
Customer Customer probability that a transaction
buys both buys diaper having X also contains Y
Let supmin = 50%, confmin = 50%
Freq. Pat.: {A:3, B:3, D:4, E:3, AD:3}
Association rules:
Customer
A à D (60%, 100%)
buys beer D à A (60%, 75%)
Regression

● Predict a value of a given continuous valued variable

based on the values of other variables, assuming a linear
or nonlinear model of dependency.
● Greatly studied in statistics, neural network fields.
● Examples:
– Predicting sales amounts of new product based on
advertising expenditure.
– Predicting wind velocities as a function of
temperature, humidity, air pressure, etc.
– Time series prediction of stock market indices.
Regression
Regression
 Linear Regression Trendline

Statistics & Data Analysis within Microsoft Excel

http://www.online-tech-tips.com/ms-office-tips/add-a-linear-regression-trendline-to-an-excel-scatter-plot/
Deviation/Anomaly Detection

● Detect significant deviations from normal behavior

● Applications:
– Credit Card Fraud Detection
– Network Intrusion
Detection
● Also known as
Outlier Detection

Typical network traffic at University level may reach over 100 million connections per day
Anomaly/Outlier Detection
● What are anomalies/outliers?
– The set of data points that are considerably
different than the remainder of the data
● Variants of Anomaly/Outlier Detection
Problems
– Given a database D, find all the data points x ∈ D
with anomaly scores greater than some threshold
t
● Applications:
– Credit card fraud detection, telecommunication
fraud detection, network intrusion detection, fault
detection
Importance of Anomaly Detection

Ozone Depletion History

● In 1985 three researchers (Farman,
Gardinar and Shanklin) were
puzzled by data gathered by the
British Antarctic Survey showing that
ozone levels for Antarctica had
dropped 10% below normal levels

● Why did the Nimbus 7 satellite,

which had instruments aboard for
recording ozone levels, not record
similarly low ozone concentrations?

● The ozone concentrations recorded

by the satellite were so low they
were being treated as outliers by a
Sources:
computer program and discarded! http://exploringdata.cqu.edu.au/ozone.html
http://www.epa.gov/ozone/science/hole/size.html
Anomaly Detection

● Challenges
– How many outliers are there in the data?
– Method is unsupervised
uValidation can be quite challenging (just like for
clustering)
– Finding needle in a haystack

● Working assumption:
– There are considerably more “normal”
observations than “abnormal” observations
(outliers/anomalies) in the data
Anomaly Detection Schemes

● General Steps
– Build a profile of the “normal” behavior
u Profile can be patterns or summary statistics for the overall population
– Use the “normal” profile to detect anomalies
u Anomalies are observations whose characteristics
differ significantly from the normal profile

● Types of anomaly detection

schemes
– Graphical & Statistical-based
– Distance-based
– Model-based
 Data Streams
● Data streams
– continuous, ordered, changing, fast, huge amount
● Traditional DBMS—data stored in finite, persistent data sets
● Characteristics
– Huge volumes of continuous data, possibly infinite
– Fast changing and requires fast, real-time response
– Data stream captures nicely our data processing needs of
today
– Random access is expensive—single scan algorithm
(can only have one look)
– Store only the summary of the data seen thus far
Stream Data Applications
● Telecommunication calling records
● Business: credit card transaction flows
● Network monitoring and traffic engineering
● Financial market: stock exchange
● Engineering & industrial processes: power supply &
manufacturing
● Sensor, monitoring & surveillance: video streams, RFIDs
● Security monitoring
● Web logs and Web page click streams
● Massive data sets (even saved but random access is too
expensive)
Architecture: Stream Query Processing

SDMS (Stream Data User/Application

Management System)

Continuous Query

Results
Multiple streams
Stream Query
Processor

Scratch Space
(Main memory and/or Disk)
Challenges of Stream Data Processing
● Multiple, continuous, rapid, time-varying, ordered streams
● Main memory computations
● Queries are often continuous
– Evaluated continuously as stream data arrives
– Answer updated over time

● Queries are often complex

– Beyond element-at-a-time processing
– Beyond stream-at-a-time processing
– Beyond relational queries (scientific, data mining, OLAP)

● Multi-level/multi-dimensional processing and data mining

– Most stream data are at low-level or multi-dimensional in nature
Data Stream Mining
 Social Mining
“Social media has proven to be an
endless fountain of such data.
Each day over 350 million photos
are uploaded to Facebook and
over 500 million tweets are published.
That’s an amount of data being
created every day that would have
been unfathomable a century ago.”
Marc Blinder, Director, Social and Strategic Marketing at Adobe.

http://usefulsocialmedia.com/customer-insight/social-mining-part-1-how-big-data-transforming-
customer-insights
Challenges of Data Mining

● Scalability
● Dimensionality
● Complex and Heterogeneous Data
● Data Quality
● Data Ownership and Distribution
● Privacy Preservation
● Streaming Data
END
Exercise  1  
● Name  the  following  data  mining  techniques:  
● A  rule  in  the  form  of  “if  this  then  that”  associates  events  in  a  
database.  
● The  process  of  learning  to  dis:nguish  and  discriminate  
between  different  input  pa=erns  using  supervised  training  
algorithm.  
● The  process  of  grouping  similar  input  pa=erns  together  using  
an  unsupervised  training  algorithm  
● The  technique  determines  a  mathema:cal  equa:on  that  
minimizes  some  measure  of  the  error  between  the  predic:on  
and  the  actual  data  
● Also  know  as  anomaly  or  outlier  detec:on,  this  technique  
seeks  to  iden:fy  items,  events  or  observa:ons  which  do  not  
conform  to  an  expected  pa=ern  or  other  items  in  a  dataset  
Exercise  2  
● What  is  the  difference  between  classifica:on  and  
clustering  in  a  data  mining  environment?  
● Describe  the  followings:  
– Data  Stream  Mining  
– Social  Mining  
How  can  you  connect  the  two  concepts  above.  
● Draw  the  Knowledge  Discovery  Process  
● What  is  Customer  Rela:onship  Management  (CRM)?