What is Bayesian Belief? A Dummies Guide

Bayesian Belief Networks are networks of connected variables that generate predictions based on assumptions. These are generally used when there is a lack of data available.

Bayesian Belief Networks – Example

Let’s say we are determining the likelihood of a person owning a Michael Kors handbag and the average UK person has a likelihood of 20% of owning one. If we know some additional pieces of information, we can update our model based on this. We can then use this to determine the specific probability of owning a Michael Kors handbag using the information we currently know.

The Average Joe has a 20% chance of owning a Michael Kors handbag

Person A: 1) Owns a dog, 2) Is male, 3) Has a semi-detached house

Person B: 1) Owns a Michael Kors watch, 2) Is aged 20-25, 3) Is female

Person C: 1) is aged 40-45, 2) Shops in Prada 3) Wears Chanel perfume

 

The likelihood that these users own a Michael Kors handbag is different for each individual based on the variables that are known because the statistical links are measured between these types of variables.

With Bayesian modelling, we can update the likelihood that a user owns a handbag despite the sparse details available.

With the known information, the model uses this to predict the likelihood of owning a Michael Kors handbag vs. not owning one, despite the fact there are certain elements about the user we do not know.

 

Bayesian Belief Networks are part of the various advanced analytics techniques we use in our software solutions to derive meaningful insights into consumers. Our solutions PROFILE and Discovery help businesses to personalise marketing to boost ROI.

Check out our blog on Natural Language Processing

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Using consumer personality insights to maximise marketing success

In the USA alone, $170billion is spent on direct marketing each year but it offers little ROI.

A recent study revealed that 3% of recipients of physical mail bought something as a result, while the conversion rate for online ads into sales was a mere 0.01%.

Rather than direct marketing itself being the issue, maybe it is the persistent habit of using demographic data. Using age and sex to target advertisements can result in your effort-laden ad being interpreted as impersonal junk-mail.

Not only is understanding personality a vital aspect of maximising sales, it’s hugely relevant to the effectiveness of marketing styles.

The study

A study by Jacob Hirsh found that advertisements targeted to personality were rated as more effective than universal advertisements.

Using 324 participants, they created five advertisements, each designed to target one of the Big Five human personality traits. These are: Extraversion, Agreeableness, Conscientiousness, Neuroticism, and Openness. Individuals high in Agreeableness value familiarity, compassion, and belonging. Those high in Openness value intellect and aesthetics, and people high in Neuroticism tend to worry and value security and safety.

The advertisements contained a picture of a phone beside text which was altered to target different personality traits. Extraverted participants received the tailored ad reading “With XPhone, you’ll always be where the excitement is”. Neurotics had “Stay safe and secure with the Phone” and participants were asked to rate the ads on their effectiveness.

The findings

Targeted advertisements based on consumer personality insights were rated more effective than the universal one.

Hirsh stated “This research has broad implications for the development of tailored communication strategies across industries. Personality-based message design may be useful not only for advertisers, but also for fostering any number of outcomes, from health promotion, to civic engagement, to environmental responsibility.”

Huge amounts of money is spent every day on advertising tailored for demographic groups. Using consumer personality insights to target ads can improve effectiveness and help you understand your customers needs and motivations as well as how your products should be sold to them.

How you can gain consumer personality insights

PROFILE gives businesses consumer personality insights as well as insights into hobbies, spending habits, due diligence and more. With this, you can target your advertisements based on the things that truly matter.

Dig deeper into your consumer base. Find out more about PROFILE today.

Diversity in the workplace: Why every office needs a Slytherin

Workplace Diversity: Harry Potter Style

Workplace diversity can refer to many things (sex, race, etc.) but here we are talking about workplace diversity in the sense of personality types. Have you ever wondered which Harry Potter house you belong to and prayed that it was anything other than Slytherin? Well it turns out that being a Slytherin may not be so bad at all. Here’s why:

Personality is often explained using the Big Five: Extraversion, Agreeableness, Conscientiousness, Neuroticism, and Openness.

It is something that everyone has but that most people know very little about. Understanding personality can have benefits not just for yourself, but for businesses too.

Let’s put this in terms of Harry Potter houses:

Gryffindor:

Gryffindors are fiery and loyal, friends matter a lot to them. They are innovators and entrepreneurs with a lot of creative ideas. They love to compete and have a tendency to challenge authority. Adventure is a must for a Gryffindor and they may get bored if they are left alone with the same work every day. Be warned: hiring a Gryffindor may result in an adventurous Christmas party; think Skydiving.

Hufflepuff:

Hufflepuffs love to please and help others. Altruism is in their nature and you may find that these people are the one’s on the tea runs or organising charity events. They focus on team goals rather than being individually competitive. Hufflepuffs tend to fear the unknown and prefer familiarity- i.e. these people will definitely not partake in Gryffindor’s Skydiving party

Ravenclaw:

Ravenclaws are the most conscientious of the houses, they seek knowledge and love to learn. You may find that Ravenclaws tend to get lost in their heads and spend hours reading. They are the ones in the office that love to teach others but they cannot stand stupidity. They love to work alone and are very unlikely to get into conflicts with others.

Slytherin:

Slytherins value order, tradition, and authority. They have respect for their superiors but they always look to seek individual gain. Reputation is of high importance to Slytherins so you won’t find them doing anything that may compromise this. Like Gryffindors, Slytherins get bored easily and like to take risks, however they are more calculated and careful about the risks that they take. A Slytherin may jump up the company hierarchy faster than you realise.

While one of these personality types may seem most ideal for your company, it is important to consider that your workforce is unlikely to be effective if every individual has the exact same traits – workplace diversity is essential for any business environment to thrive.

Any company lacking in workplace diversity can end up suffering as a result, whereas having employees with different personalities can have multiple benefits:

Increased Adaptability

In a place with high workplace diversity, each individual feels able to adjust to changing conditions and roles due to the support of their co-workers

Higher Productivity

Higher workplace diversity in terms of personality scores among co-workers can result in higher morale, and a mix of personalities can help compensate for other’s strengths and weaknesses to create a stronger, more balanced environment.

Vetting CVs is an important step in the hiring process but it can be extremely tedious and time-consuming, and even then it is difficult to infer an applicant’s personality from that. Taking advantage of Big Data will allow employers to vet potential employees in the initial application stage which will not only make narrowing down applicants easier and more efficient, but it will potentially save the company money spent on sick days and help recruit an overall more effective team.

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