Uplift modelling

Uplift modelling, also known as incremental modelling, true lift modelling, or net modelling is a predictive
modelling technique that directly models the incremental impact of a treatment (such as a direct marketing action)
on an individual's behaviour.

Uplift modelling has applications in customer relationship management for up-sell, cross-sell and retention
modelling. It has also been applied to political election and personalised medicine. Unlike the related Differential
Prediction concept in psychology, Uplift Modelling assumes an active agent.

Introduction
Uplift modelling uses a randomised scientific control not only to measure the effectiveness of an action but also to
build a predictive model that predicts the incremental response to the action. The response could be a binary
variable (for example, a website visit)[1] or a continuous variable (for example, customer revenue).[2] Uplift
modelling is a data mining technique that has been applied predominantly in the financial services,
telecommunications and retail direct marketing industries to up-sell, cross-sell, churn and retention activities.

Measuring uplift
The uplift of a marketing campaign is usually defined as the difference in response rate between a treated group and
a randomized control group. This allows a marketing team to isolate the effect of a marketing action and measure
the effectiveness or otherwise of that individual marketing action. Honest marketing teams will only take credit for
the incremental effect of their campaign.

However, many marketers define lift (rather than uplift) as the difference in response rate between treatment and
control, so uplift modeling can be defined as improving (upping) lift through predictive modeling.

The table below shows the details of a campaign showing the number of responses and calculated response rate for
a hypothetical marketing campaign. This campaign would be defined as having a response rate uplift of 5%. It has
created 50,000 incremental responses (100,000 - 50,000).

Group Number of Customers Responses Response Rate

Treated 1,000,000 100,000 10%

Control 1,000,000 50,000 5%

Traditional response modelling

Traditional response modelling typically takes a group of treated customers and attempts to build a predictive
model that separates the likely responders from the non-responders through the use of one of a number of predictive
modelling techniques. Typically this would use decision trees or regression analysis.

This model would only use the treated customers to build the model.
In contrast uplift modeling uses both the treated and control customers to build a predictive model that focuses on
the incremental response. To understand this type of model it is proposed that there is a fundamental segmentation
that separates customers into the following groups (their names were suggested by N. Radcliffe and explained in
[3])

The Persuadables : customers who only respond to the marketing action because they were targeted
The Sure Things : customers who would have responded whether they were targeted or not
The Lost Causes : customers who will not respond irrespective of whether or not they are targeted
The Do Not Disturbs or Sleeping Dogs : customers who are less likely to respond because they were
targeted
The only segment that provides true incremental responses is the Persuadables.

Uplift modelling provides a scoring technique that can separate customers into the groups described above.

Traditional response modelling often targets the Sure Things being unable to distinguish them from the
Persuadables.

Return on investment
Because uplift modelling focuses on incremental responses only, it provides very strong return on investment cases
when applied to traditional demand generation and retention activities. For example, by only targeting the
persuadable customers in an outbound marketing campaign, the contact costs and hence the return per unit spend
can be dramatically improved.

Removal of negative effects

One of the most effective uses of uplift modelling is in the removal of negative effects from retention campaigns.
Both in the telecommunications and financial services industries often retention campaigns can trigger customers to
cancel a contract or policy. Uplift modelling allows these customers, the Do Not Disturbs, to be removed from the
campaign.

Application to A/B and multivariate testing

It is rarely the case that there is a single treatment and control group. Often the "treatment" can be a variety of
simple variations of a message or a multi-stage contact strategy that is classed as a single treatment. In the case of
A/B or multivariate testing, uplift modelling can help in understanding whether the variations in tests provide any
significant uplift compared to other targeting criteria such as behavioural or demographic indicators.

History of uplift modelling

The first appearance of true response modelling appears to be in the work of Radcliffe and Surry.[4]

Victor Lo also published on this topic in The True Lift Model (2002),[5] and later Radcliffe again with Using
Control Groups to Target on Predicted Lift: Building and Assessing Uplift Models (2007).[6]

Radcliffe also provides a very useful frequently asked questions (FAQ) section on his web site, Scientific
Marketer.[7] Lo (2008) provides a more general framework, from program design to predictive modeling to
optimization, along with future research areas.[8]
Independently uplift modelling has been studied by Piotr Rzepakowski. Together with Szymon Jaroszewicz he
adapted information theory to build multi-class uplift decision trees and published the paper in 2010.[9] And later in
2011 they extended the algorithm to multiple treatment case.[10]

Similar approaches have been explored in personalised medicine.[11][12] Szymon Jaroszewicz and Piotr
Rzepakowski (2014) designed uplift methodology for survival analysis and applied it to randomized controlled trial
analysis.[13] Yong (2015) combined a mathematical optimization algorithm via dynamic programming with
machine learning methods to optimally stratify patients.[14]

Uplift modelling is a special case of the older psychology concept of Differential Prediction.[15] In contrast to
differential prediction, uplift modelling assumes an active agent, and uses the uplift measure as an optimization
metric.

Uplift modeling has been recently extended and incorporated into diverse machine learning algorithms, like
Inductive Logic Programming,[15] Bayesian Network,[16] Statistical relational learning,[12] Support Vector
Machines,[17][18] Survival Analysis[13] and Ensemble learning.[19]

Even though uplift modeling is widely applied in marketing practice (along with political elections), it has rarely
appeared in marketing literature. Kane, Lo and Zheng (2014) published a thorough analysis of three data sets using
multiple methods in a marketing journal and provided evidence that a newer approach (known as the Four Quadrant
Method) worked quite well in practice.[20] Lo and Pachamanova (2015) extended uplift modeling to prescriptive
analytics for multiple treatment situations and proposed algorithms to solve large deterministic optimization
problems and complex stochastic optimization problems where estimates are not exact.[21]

Recent research analyses the performance of various state-of-the-art uplift models in benchmark studies using large
data amounts.[22][1]

A detailed description of uplift modeling, its history, the way uplift models are built, differences to classical model
building as well as uplift-specific evaluation techniques, a comparison of various software solutions and an
explanation of different economical scenarios can be found here.[23]

Implementations

In Python
CausalML (https://github.com/uber/causalml)
DoubleML (https://docs.doubleml.org/stable/index.html)
EconML (https://github.com/microsoft/EconML)
UpliftML (https://github.com/bookingcom/upliftml)
PyLift (https://github.com/wayfair/pylift)
scikit-uplift (https://github.com/maks-sh/scikit-uplift)

In R
DoubleML (https://docs.doubleml.org/stable/index.html)
uplift package (https://cran.r-project.org/web/packages/uplift/index.html)

Other languages
JMP by SAS
 Portrait Uplift by Pitney Bowes
Uplift node for KNIME by Dymatrix
Uplift Modelling in Miró (http://www.stochasticsolutions.com/miro/) by Stochastic Solutions (http://ww
w.stochasticsolutions.com/)

Datasets
Hillstrom Email Marketing dataset (https://blog.minethatdata.com/2008/05/best-answer-e-mail-analyti
cs-challenge.html)
Criteo Uplift Prediction dataset (http://ailab.criteo.com/criteo-uplift-prediction-dataset/)
Lenta Uplift Modeling Dataset (https://www.uplift-modeling.com/en/latest/api/datasets/fetch_lenta.html
#lenta-uplift-modeling-dataset)
X5 RetailHero Uplift Modeling Dataset (https://www.uplift-modeling.com/en/latest/api/datasets/fetch_x
5.html#x5-retailhero-uplift-modeling-dataset)
MegaFon Uplift Competition Dataset (https://www.uplift-modeling.com/en/latest/api/datasets/fetch_m
egafon.html#megafon-uplift-competition-dataset)

Notes and references

1. Devriendt, Floris; Moldovan, Darie; Verbeke, Wouter (2018). "A literature survey and experimental
evaluation of the state-of-the-art in uplift modeling: A stepping stone toward the development of
prescriptive analytics". Big Data. 6 (1): 13–41. doi:10.1089/big.2017.0104 (https://doi.org/10.1089%2
Fbig.2017.0104). PMID 29570415 (https://pubmed.ncbi.nlm.nih.gov/29570415).
2. Gubela, Robin M.; Lessmann, Stefan; Jaroszewicz, Szymon (2020). "Response transformation and
profit decomposition for revenue uplift modeling". European Journal of Operational Research. 283
(2): 647–661. arXiv:1911.08729 (https://arxiv.org/abs/1911.08729). doi:10.1016/j.ejor.2019.11.030 (ht
tps://doi.org/10.1016%2Fj.ejor.2019.11.030). S2CID 208175716 (https://api.semanticscholar.org/Corp
usID:208175716).
3. N. Radcliffe (2007). Identifying who can be saved and who will be driven away by retention activity.
Stochastic Solution Limited
4. Radcliffe, N. J.; and Surry, P. D. (1999); Differential response analysis: Modelling true response by
isolating the effect of a single action, in Proceedings of Credit Scoring and Credit Control VI, Credit
Research Centre, University of Edinburgh Management School
5. Lo, V. S. Y. (2002); The True Lift Model, ACM SIGKDD Explorations Newsletter, Vol. 4, No. 2, 78–86,
available at
http://citeseerx.ist.psu.edu/viewdoc/download;jsessionid=4FD247B4987CBF2E29186DACE0D40C3D?
doi=10.1.1.99.7064&rep=rep1&type=pdf
6. Radcliffe, N. J. (2007); Using Control Groups to Target on Predicted Lift: Building and Assessing
Uplift Models, Direct Marketing Analytics Journal, Direct Marketing Association
7. The Scientific Marketer FAQ on Uplift Modelling (http://scientificmarketer.com/2007/09/uplift-modellin
g-faq.html)
8. Lo, V. S.Y. (2008) “New Opportunities in Marketing Data Mining.” In Encyclopedia of Data
Warehousing and Mining, 2nd edition, edited by Wang (2008), Idea Group Publishing.
9. Rzepakowski, Piotr; Jaroszewicz, Szymon (2010). "Decision Trees for Uplift Modeling". 2010 IEEE
International Conference on Data Mining. Sydney, Australia. pp. 441–450. doi:10.1109/ICDM.2010.62
(https://doi.org/10.1109%2FICDM.2010.62). ISBN 978-1-4244-9131-5. S2CID 14362608 (https://api.s
emanticscholar.org/CorpusID:14362608).
10. Rzepakowski, Piotr; Jaroszewicz, Szymon (2011). "Decision trees for uplift modeling with single and
multiple treatments" (https://doi.org/10.1007%2Fs10115-011-0434-0). Knowledge and Information
Systems. 32 (2): 303–327. doi:10.1007/s10115-011-0434-0 (https://doi.org/10.1007%2Fs10115-011-
0434-0).
11. Cai, T.; Tian, L.; Wong, P. H.; and Wei, L. J. (2009); Analysis of Randomized Comparative Clinical
Trial Data for Personalized Treatment Selections, Harvard University Biostatistics Working Paper
Series, Paper 97
12. Nassif, Houssam; Kuusisto, Finn; Burnside, Elizabeth S; Page, David; Shavlik, Jude; Santos Costa,
Vitor (2013). "Score as You Lift (SAYL): A Statistical Relational Learning Approach to Uplift Modeling".
Advanced Information Systems Engineering. Lecture Notes in Computer Science. Vol. 8190. Prague.
pp. 595–611. doi:10.1007/978-3-642-40994-3_38 (https://doi.org/10.1007%2F978-3-642-40994-3_3
8). ISBN 978-3-642-38708-1. PMC 4492311 (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC449231
1). PMID 26158122 (https://pubmed.ncbi.nlm.nih.gov/26158122).
13. Jaroszewicz, Szymon; Rzepakowski, Piotr (2014). "Uplift modeling with survival data" (http://cci.drexe
l.edu/hi/hi-kdd2014/morning_4.pdf) (PDF). ACM SIGKDD Workshop on Health Informatics (HI
KDD'14). New York, USA.
14. Yong, F.H. (2015), "Quantitative Methods for Stratified Medicine," PhD Dissertation, Department of
Biostatistics, Harvard T.H. Chan School of Public Health,
http://dash.harvard.edu/bitstream/handle/1/17463130/YONG-DISSERTATION-2015.pdf?sequence=1
.
15. Nassif, Houssam; Santos Costa, Vitor; Burnside, Elizabeth S; Page, David (2012). "Relational
Differential Prediction". Machine Learning and Knowledge Discovery in Databases. Lecture Notes in
Computer Science. Vol. 7523. Bristol, UK. pp. 617–632. doi:10.1007/978-3-642-33460-3_45 (https://d
oi.org/10.1007%2F978-3-642-33460-3_45). ISBN 978-3-642-33459-7.
16. Nassif, Houssam; Wu, Yirong; Page, David; Burnside, Elizabeth (2012). "Logical Differential
Prediction Bayes Net, Improving Breast Cancer Diagnosis for Older Women" (https://www.ncbi.nlm.ni
h.gov/pmc/articles/PMC3540455). American Medical Informatics Association Symposium (AMIA'12).
2012: 1330–1339. PMC 3540455 (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3540455).
PMID 23304412 (https://pubmed.ncbi.nlm.nih.gov/23304412).
17. Kuusisto, Finn; Santos Costa, Vitor; Nassif, Houssam; Burnside, Elizabeth; Page, David; Shavlik,
Jude (2014). "Support Vector Machines for Differential Prediction". Machine Learning and Knowledge
Discovery in Databases. Lecture Notes in Computer Science. Vol. 8725. Nancy, France. pp. 50–65.
doi:10.1007/978-3-662-44851-9_4 (https://doi.org/10.1007%2F978-3-662-44851-9_4). ISBN 978-3-
662-44850-2. PMC 4492338 (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4492338).
PMID 26158123 (https://pubmed.ncbi.nlm.nih.gov/26158123).
18. Zaniewicz, Lukasz; Jaroszewicz, Szymon (2013). "Support Vector Machines for Uplift Modeling". The
First IEEE ICDM Workshop on Causal Discovery. Dallas, Texas.
19. Sołtys, Michał; Jaroszewicz, Szymon; Rzepakowski, Piotr (2015). "Ensemble methods for uplift
modeling" (https://doi.org/10.1007%2Fs10618-014-0383-9). Data Mining and Knowledge Discovery.
29 (6): 1531–1559. doi:10.1007/s10618-014-0383-9 (https://doi.org/10.1007%2Fs10618-014-0383-
9).
20. Kane, K.; Lo, V.S.Y.; Zheng, J. (2014). "Mining for the Truly Responsive Customers and Prospects
Using True-Lift Modeling: Comparison of New and Existing Methods". Journal of Marketing Analytics.
2 (4): 218–238. doi:10.1057/jma.2014.18 (https://doi.org/10.1057%2Fjma.2014.18).
S2CID 256513132 (https://api.semanticscholar.org/CorpusID:256513132).
21. Lo, V.S.Y.; Pachamanova, D. (2015). "From Predictive Uplift Modeling to Prescriptive Uplift Analytics:
A Practical Approach to Treatment Optimization While Accounting for Estimation Risk". Journal of
Marketing Analytics. 3 (2): 79–95. doi:10.1057/jma.2015.5 (https://doi.org/10.1057%2Fjma.2015.5).
S2CID 256508939 (https://api.semanticscholar.org/CorpusID:256508939).
22. Gubela, Robin M.; Bequé, Artem; Lessmann, Stefan; Gebert, Fabian (2019). "Conversion Uplift in E-
Commerce: A Systematic Benchmark of Modeling Strategies". International Journal of Information
Technology & Decision Making. 18 (3): 747–791. doi:10.1142/S0219622019500172 (https://doi.org/1
0.1142%2FS0219622019500172). hdl:10419/230773 (https://hdl.handle.net/10419%2F230773).
S2CID 126538764 (https://api.semanticscholar.org/CorpusID:126538764).
23. R. Michel, I. Schnakenburg, T. von Martens (2019). „Targeting Uplift“. Springer, ISBN 978-3-030-
22625-1

See also
Lift (data mining)

External links
 Abby Johnson explains how it works in this video broadcast (http://videos.smallbusinessnewz.com/20
11/01/05/how-uplift-modeling-boosts-marketing-efforts/)
Introductory white paper with full references (http://www.predictiveanalyticsworld.com/signup-uplift-wh
itepaper.php)
Eric Siegel: Uplift Modeling (http://www.predictiveanalyticsworld.com/pdf/YTW03080USEN/Uplift-Mod
eling-Optimizes-Marketing-Decisions-White-Paper.pdf)
User guide for uplift modelling on uplift-modeling.com (https://www.uplift-modeling.com/en/latest/user
_guide/index.html)

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