Revenue Growth
Through Machine Learning
Ted Dunning – March 21, 2013
Agenda
• Intelligence – Artificial or Reflected
• Quick survey of machine learning
– without a PhD
– not all of it
• Avail...
Artificial Intelligence?
Artificial Intelligence?
• Turing and the intelligent machine
• Rules?
• Neural networks?
• Logic?
Reflected Intelligence!
• Society is not just a million individuals
• A web service with a million users is not the
same a...
What is Machine Learning?
• Statistics, but …
• New focus on prediction rather than
hypothesis testing
• Prediction means ...
The Classics
• Unsupervised
– AKA clustering (but not what you think that is)
– Mixture models, Markov models and more
– L...
Recent Insurgents
• Collaborative learning
– models that learn about you based on others
• Meta-modeling
– models that lea...
Techniques
• Surprise and coincidence
• Anomalous indicators
• Non-textual search using textual tools
• Dithering
• Meta-l...
Surprise and coincidence
• What is accidental or uninteresting?
• What is surprising and informative?
A vice president of South Carolina Bank and Trust in
Bamberg, Maxwell has served as a tireless champion for
economic devel...
The goal of learning is prediction. Learning falls into many
categories, including supervised learning, unsupervised
learn...
Surprise and Coincidence
• Which words stand out in these examples?
• Which are just there because these are in
English?
•...
More Surprise
• Anomalous indicators
– Events that occur before other events
– But occur anomalously often
• Indicators ar...
Example #1- Auto Insurance
• Predict probability of attrition and loss for
auto insurance customers
• Transactional variab...
Derived Variables
• Split training data according to observable
classes
• Define LLR variables for each class/variable
com...
Example #2 – Fraud Detection
• Predict probability that an account is likely
to result in charge-off due to fraud
• Transa...
Derived Variables
• Split training data according to observable
classes
• Define LLR variables for each class/variable
com...
Search Abuse
• Non-textual search using textual tools
– A document can contain non-word tokens
– These might be anomalous ...
Introducing Noise
• Dithering
– add noise
– less for high ranks, more for low ranks
• Softens page boundary effects
• Intr...
Meta-learning
• Which settings work best?
• Which indicators?
• A/B testing for the back-end
Available components
• Mahout
– LLR test for anomaly
– Coocurrence computations
– Baseline components of Bayesian Bandits
...
History matrix
One row per user
One column per thing
Recommendation based on
cooccurrence
Cooccurrence gives item-item
mapping
One row and column per thing
Cooccurrence matrix can also be
implemented as a search index
Input Data
• User transactions
– user id, merchant id
– SIC code, amount
• Offer transactions
– user id, offer id
– vendor...
Input Data
• User transactions
– user id, merchant id
– SIC code, amount
• Offer transactions
– user id, offer id
– vendor...
Cross-recommendation
• Per merchant indicators
– merchant id’s
– chain id’s
– SIC codes
– offer vendor id’s
• Computed by ...
Search-based Recommendations
• Sample document
– Merchant Id
– Field for text description
– Phone
– Address
– Location
Search-based Recommendations
• Sample document
– Merchant Id
– Field for text description
– Phone
– Address
– Location
– I...
Search-based Recommendations
• Sample document
– Merchant Id
– Field for text description
– Phone
– Address
– Location
– I...
SolR
Indexer
SolR
Indexer
Solr
indexing
Cooccurrence
(Mahout)
Item meta-
data
Index
shards
Complete
history
SolR
Indexer
SolR
Indexer
Solr
search
Web tier
Item meta-
data
Index
shards
User
history
Objective Results
• At a very large credit card company
• History is all transactions, all web interaction
• Processing ti...
Platform Needs
• Need to root web services and search system on the
cluster
– Copying negates unification
• Legacy indexer...
Additional Opportunities
• Cross recommend from search queries to
documents
• Result is semantic search engine
• Uses refl...
• What do customers really want?
Another Example
• Users enter queries (A)
– (actor = user, item=query)
• Users view videos (B)
– (actor = user, item=video...
The punch-line
• B’A recommends videos in response to a
query
– (isn’t that a search engine?)
– (not quite, it doesn’t loo...
Real-life example
• Query: “Paco de Lucia”
• Conventional meta-data search results:
– “hombres del paco” times 400
– not m...
Real-life example
Hypothetical Example
• Want a navigational ontology?
• Just put labels on a web page with traffic
– This gives A = users x...
Next Steps
• That is up to you
• But I can help
– platforms (Solr, MapR)
– techniques (Mahout, math)
tdunning@maprtech.com...
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Summit EU Machine Learning

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"The greater promise of Big Data lies not in doing old things in slightly new ways. Instead, it lies in doing new things that were previously not possible. One major class of new things is adding intelligence to large-scale systems. In this session I will present a survey of how machine learning can be applied to real-life situations without having to get a PhD in advanced mathematics. These systems can be built today from open source components to increase business revenues by understanding what customers need and want. I will provide real world examples of best practices and pitfalls in machine learning including practical ways to build maintainable, high performance systems." - Ted Dunning

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Summit EU Machine Learning

  1. 1. Revenue Growth Through Machine Learning Ted Dunning – March 21, 2013
  2. 2. Agenda • Intelligence – Artificial or Reflected • Quick survey of machine learning – without a PhD – not all of it • Available components • What do customers really want
  3. 3. Artificial Intelligence?
  4. 4. Artificial Intelligence? • Turing and the intelligent machine • Rules? • Neural networks? • Logic?
  5. 5. Reflected Intelligence! • Society is not just a million individuals • A web service with a million users is not the same as a million users each with a computer • Social computing emerges
  6. 6. What is Machine Learning? • Statistics, but … • New focus on prediction rather than hypothesis testing • Prediction means held-out data, not just the future (now-casting)
  7. 7. The Classics • Unsupervised – AKA clustering (but not what you think that is) – Mixture models, Markov models and more – Learn from unlabeled data, describe it predictively • Supervised – AKA classification – Learn from labeled data, guess labels for new data • Also semi-supervised and hundreds of variants
  8. 8. Recent Insurgents • Collaborative learning – models that learn about you based on others • Meta-modeling – models that learn to reason about what other models say • Interactive systems – systems that pick what to learn from
  9. 9. Techniques • Surprise and coincidence • Anomalous indicators • Non-textual search using textual tools • Dithering • Meta-learning
  10. 10. Surprise and coincidence • What is accidental or uninteresting? • What is surprising and informative?
  11. 11. A vice president of South Carolina Bank and Trust in Bamberg, Maxwell has served as a tireless champion for economic development in Bamberg County since 1999, welcoming industrial prospects to the county and working with existing industries in their expansion efforts. Maxwell served for many years as the president of the Bamberg County Chamber of Commerce and remains an active member today.
  12. 12. The goal of learning is prediction. Learning falls into many categories, including supervised learning, unsupervised learning, online learning, and reinforcement learning. From the perspective of statistical learning theory, supervised learning is best understood.
  13. 13. Surprise and Coincidence • Which words stand out in these examples? • Which are just there because these are in English? • The words “the” and “Bamberg” both occur 3 times in the second article – which is the more interesting statistic? Why?
  14. 14. More Surprise • Anomalous indicators – Events that occur before other events – But occur anomalously often • Indicators are not causes • Nor certain
  15. 15. Example #1- Auto Insurance • Predict probability of attrition and loss for auto insurance customers • Transactional variables include – Claim history – Traffic violation history – Geographical code of residence(s) – Vehicles owned • Observed attrition and loss define past behavior
  16. 16. Derived Variables • Split training data according to observable classes • Define LLR variables for each class/variable combination • These 2 m v derived variables can be used for clustering (spectral, k-means, neural gas ...) • Proximity in LLR space to clusters are the new modeling variables
  17. 17. Example #2 – Fraud Detection • Predict probability that an account is likely to result in charge-off due to fraud • Transactional variables include – Zip code – Recent payments and charges – Recent non-monetary transactions • Bad payments, charge-off, delinquency are observable behavioral outcomes
  18. 18. Derived Variables • Split training data according to observable classes • Define LLR variables for each class/variable combination • These 2 m v derived variables can be used directly as model variables
  19. 19. Search Abuse • Non-textual search using textual tools – A document can contain non-word tokens – These might be anomalous indicators of an event • SolR and similar engines can search for indicators – If we have a history of recent indicators, search finds possible follow-on events
  20. 20. Introducing Noise • Dithering – add noise – less for high ranks, more for low ranks • Softens page boundary effects • Introduces more exploration
  21. 21. Meta-learning • Which settings work best? • Which indicators? • A/B testing for the back-end
  22. 22. Available components • Mahout – LLR test for anomaly – Coocurrence computations – Baseline components of Bayesian Bandits • SolR – Ready to roll for search
  23. 23. History matrix One row per user One column per thing
  24. 24. Recommendation based on cooccurrence Cooccurrence gives item-item mapping One row and column per thing
  25. 25. Cooccurrence matrix can also be implemented as a search index
  26. 26. Input Data • User transactions – user id, merchant id – SIC code, amount • Offer transactions – user id, offer id – vendor id, merchant id’s, – offers, views, accepts
  27. 27. Input Data • User transactions – user id, merchant id – SIC code, amount • Offer transactions – user id, offer id – vendor id, merchant id’s, – offers, views, accepts • Derived user data – merchant id’s – SIC codes – offer & vendor id’s • Derived merchant data – local top40 – SIC code – vendor code – amount distribution
  28. 28. Cross-recommendation • Per merchant indicators – merchant id’s – chain id’s – SIC codes – offer vendor id’s • Computed by finding anomalous (indicator => merchant) rates
  29. 29. Search-based Recommendations • Sample document – Merchant Id – Field for text description – Phone – Address – Location
  30. 30. Search-based Recommendations • Sample document – Merchant Id – Field for text description – Phone – Address – Location – Indicator merchant id’s – Indicator industry (SIC) id’s – Indicator offers – Indicator text – Local top40
  31. 31. Search-based Recommendations • Sample document – Merchant Id – Field for text description – Phone – Address – Location – Indicator merchant id’s – Indicator industry (SIC) id’s – Indicator offers – Indicator text – Local top40 • Sample query – Current location – Recent merchant descriptions – Recent merchant id’s – Recent SIC codes – Recent accepted offers – Local top40
  32. 32. SolR Indexer SolR Indexer Solr indexing Cooccurrence (Mahout) Item meta- data Index shards Complete history
  33. 33. SolR Indexer SolR Indexer Solr search Web tier Item meta- data Index shards User history
  34. 34. Objective Results • At a very large credit card company • History is all transactions, all web interaction • Processing time cut from 20 hours per day to 3 • Recommendation engine load time decreased from 8 hours to 3 minutes
  35. 35. Platform Needs • Need to root web services and search system on the cluster – Copying negates unification • Legacy indexers are extremely fast … but they assume conventional file access • High performance search engines need high performance file I/O • Need coordinated process management
  36. 36. Additional Opportunities • Cross recommend from search queries to documents • Result is semantic search engine • Uses reflected intelligence instead of artificial intelligence
  37. 37. • What do customers really want?
  38. 38. Another Example • Users enter queries (A) – (actor = user, item=query) • Users view videos (B) – (actor = user, item=video) • A’A gives query recommendation – “did you mean to ask for” • B’B gives video recommendation – “you might like these videos”
  39. 39. The punch-line • B’A recommends videos in response to a query – (isn’t that a search engine?) – (not quite, it doesn’t look at content or meta- data)
  40. 40. Real-life example • Query: “Paco de Lucia” • Conventional meta-data search results: – “hombres del paco” times 400 – not much else • Recommendation based search: – Flamenco guitar and dancers – Spanish and classical guitar – Van Halen doing a classical/flamenco riff
  41. 41. Real-life example
  42. 42. Hypothetical Example • Want a navigational ontology? • Just put labels on a web page with traffic – This gives A = users x label clicks • Remember viewing history – This gives B = users x items • Cross recommend – B’A = label to item mapping • After several users click, results are whatever users think they should be
  43. 43. Next Steps • That is up to you • But I can help – platforms (Solr, MapR) – techniques (Mahout, math) tdunning@maprtech.com @ted_dunning @ApacheMahout
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