As a mathematician/statistician I am sometimes asked why a sample works? If you have a population of 100 million, how come that taking at-random just 200 people will give me a pretty accurate indication of the 100 million?

To understand this best to think of the RED’s and BLACK’s in a casino. The answer to above question is that both sequences have the same probability (they are both just as likely or unlikely to occur). However, most people would say that the sequence with the random red’s and black’s is more likely and the reason is that such a sequence has many, many more “look-alikes”. Another sequence (and a look-alike) with again the same probability would be R-B-R-R-B-B-B-R-R-B. Notice that there is only one unique sequence (with no look-alikes) with only reds.

Now let’s say that we have a big bowl of balls, about 100 million balls of which half are red and half are black (but obviously we don’t know that the reds and blacks are split 50/50). If we take out 200 balls each individual sequence of red’s and black’s is just as likely to occur and as such there is a chance that we only grab 200 red balls, but the probability of this happening is extremely small (so small that if all of humanity was able to take 200 balls every second with no sleep it would still be extremely unlikely to ever see an occurrence of 200 in all of our lifetimes, even if we all lived for a million years).

The reason this is so unlikely is that there is only one way to grab 200 red balls and that is to grab red, and then red, and then red, etc 200 times. It is much more likely that we grab close to 100 red and 100 black balls as there are simply so incredibly more ways of doing this. We could start with one red, then a black, etc or we could start with three blacks, then the first red, etc.

So with even a sample that looks small compared to the total population the number of ways you could sample that will lead to the right conclusion (in this case that half of the balls are red and half are black) simply outnumbers the number of ways you could come to a wrong solution. And by the way, this story as you now might understand is independent of the number of balls in the big bowl; this could be 100 million or just 100 thousand it does not influence the size of the sample we need.

So finally, what do you do if you are in a casino and you see the sequence RED-RED-RED-RED-RED-RED, what should your next bet be? Of course red, the bloody thing is probably broken!

 Thanks,

 Peter

I was thinking about this again after looking at a presentation from a competitor (yes, I do sometimes get competitors work on my desk) with sheet after sheet about the contribution of television, outdoor, print, etc. No mention at all of the contribution of the creative material.

First let me be clear: I totally disagree with accountability looking at media in a silo. One needs to manage the creative and media simultaneously and look holistically at the successes and failures of marketing campaigns. It is never the media buy that is solely responsible for the failure of a marketing campaign.

Obviously, this is happening for a reason. It’s much more difficult to take the creative into account and understanding norms for the effectiveness of media is certainly useful. However, the industry needs to push this step further. We’ve moved past looking at only reach and frequency, and we’re creating accountability for media plans that show what is actually being delivered for the brands. The next step is to boldly put R&D budgets into understanding the interaction between creative and media in a way that we can predict the effectiveness of campaigns considering creative and media as one and the same.

Posted by Peter Kloprogge, Co-Founder

In 1993, Sjoerd Mostert and I started Pointlogic (then called PLS which stood for Point Logic Systems) with the business plan being applying software and mathematical techniques to help board room decisions. We’ve actually been very true to our first mission; our business still revolves around this core principle with the only addition being that our applications are mostly in the area of optimizing marketing ROI. So, that defines me in business and that is what I’ll be blogging about: mathematics, software and marketing ROI.

My personal background is in mathematics.  I’ve always been intrigued by the tension between math and advertising, hard numbers versus creativity, rational versus empirical. I will use this blog to talk with you about these subjects and to reflect on the future role of mathematics and technology to optimize marketing decisions.

I hope you’ll enjoy it and to spark some lively discussions.

Posted by Peter Kloprogge, Co-Founder