Definition
Correlation is not causation — be very clear and minded about this concept. Correlation tells that A and B have relations but we are not sure what exactly the relations are. It will be on causation analysis.
Variable Selection
In marketing data analysis, we did a lot of correlation studies to understand marketing situation and chose the optimum data variables for business problems. Defining variables and selecting the good variables are two basic steps for a good correlation study.
How does correlation work for marketing?
Marketers need accurate views of their market spend, campaigns, social media and press impact. With the volatility of market condition, the measurement becomes a mystery box to uncover. Ray Dalio wrote a book “The Changing World Order” to share the economic model that he created after 10+ years of experiences in stock market. We can anticipate how hard it is to estimate the impact from macro and micro views.
In business such as e-commerce, we want to retain our consumers and acquire new users. Both ways are to expand our user base who can generate revenue for the business — thus increase market share. We can analyse from a few angels to find out the best correlation factors first, and from there how we can twist for better user attraction and engagement by using regression analysis for cause and effect analysis.
Short-term and long-term…
