Evaluating the Effectiveness of Marketing Campaigns for Malls Using a Novel Interpretable Machine Learning Model

Abstract

We develop a novel interpretable machine learning model, GANNM, and use newly available data to evaluate how different types of marketing campaigns and budget allocations influence malls’ customer traffic. We observe that the response curves that measure the impact of campaign budget on customer traffic differ for different categories of campaigns, with sales incentives or experience incentives, during peak periods, off-peak periods, or online promotion periods. Based on such accurate response curves from GANNM, the optimized budget allocation is estimated to yield a 11.2% increase in customer traffic compared with the original allocation. Our findings provide novel insights on managing mall campaigns. Mall managers should increase marketing spending to areas that were likely overlooked before and avoid over-crowding budget to campaigns during times with high levels of competition and are likely already over-marketed. We provide empirical evidence showing that the recent trend of employing novel approaches for enhancing customer experience in physical stores can effectively encourage customers to visit malls. Furthermore, we show that online promotions could also create opportunities for offline businesses—investing in campaigns in the major online promotion periods could significantly increase customer traffic for malls, given sufficient investment in the campaigns to raise customer awareness.