Precision, ROI, and AUC

The return on investment (ROI) can be decomposed into the precision multiplied by a ratio of return to cost. As discussed, it is possible for the precision of a model to be low, even while AUC of the ROC curve is high. If the precision is low, then the ROI will also be low. In this exercise, you will use a MLP to compute a sample ROI assuming a fixed r, the return on a click per number of impressions, and cost, the cost per number of impressions, along with precision and AUC of ROC curve values to check how the three values vary.

X_train, y_train, X_test, y_test are available in your workspace, along with clf as a MLP classifier, probability scores stored in y_score and predicted targets in y_pred. pandas as pd and sklearn are also available in your workspace.

This exercise is part of the course

Predicting CTR with Machine Learning in Python

Exercise instructions

Calculate the precision prec of the MLP classifier.
Calculate the total ROI based on the precision prec.

Hands-on interactive exercise

Have a go at this exercise by completing this sample code.

# Get precision and total ROI
prec = ____(y_test, ____, average = 'weighted')
r = 0.2
cost = 0.05 
roi = ____ * r / cost

# Get AUC
roc_auc = roc_auc_score(y_test, y_score[:, 1])

print("Total ROI: %s, Precision: %s, AUC of ROC curve: %s" %(
  roi, prec, roc_auc))

Edit and Run Code

This exercise is part of the course

Predicting CTR with Machine Learning in Python

IntermediateSkill Level

5.0+

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Chances are you’re on this page because you clicked a link. In this chapter, you’ll learn why click-through-rates (CTR) are integral to targeted advertising, how to perform basic DataFrame manipulation, and how you can use machine learning models to predict CTR.

Exercise 1: Introduction to click-through rates Exercise 2: Beginning steps Exercise 3: Feature exploration Exercise 4: First evaluation of data Exercise 5: Overview of machine learning models Exercise 6: Logistic regression for breast cancer Exercise 7: Logistic regression for images Exercise 8: A second toy model Exercise 9: CTR prediction using decision trees Exercise 10: Model implementation Exercise 11: A first CTR model Exercise 12: Beyond only accuracy

This chapter provides the foundations for exploratory data analysis (EDA). Using sample data you’ll use the pandas library to look at columns and data types, explore missing data, and use hashing to perform feature engineering on categorical features. All of which are important when exploring features for more accurate CTR prediction.

Exercise 1: Exploratory data analysis Exercise 2: A first look Exercise 3: Checking for missing values Exercise 4: Distributions by CTR Exercise 5: Feature engineering Exercise 6: Analyzing datetime columns Exercise 7: Converting categorical variables Exercise 8: Creating new features Exercise 9: Standardizing features Exercise 10: Log normalization Exercise 11: Understanding standardization Exercise 12: Standard scaling

It’s time to dive deeper. Find out how you can use measures of model performance including precision and recall to answer real-world questions, such as evaluating ROI on ad spend. You’ll also learn ways to improve upon those evaluation metrics, such as ensemble methods and hyperparameter tuning.

Exercise 1: Applications of metric evaluation Exercise 2: Four categories of outcomes Exercise 3: Evaluating four categories Exercise 4: ROI on ad spend Exercise 5: Model evaluation Exercise 6: Precision and recall Exercise 7: Baseline Exercise 8: Classifier comparison Exercise 9: Tuning models Exercise 10: Regularization Exercise 11: Cross validation Exercise 12: Model selection Exercise 13: Ensembles and hyperparameter tuning Exercise 14: Understanding hyperparameter tuning Exercise 15: Random forests Exercise 16: Grid search

Profits can be heavily impacted by your campaign’s CTR. In this chapter, you’ll learn how deep learning can be used to reduce that risk. You’ll focus on multi-layer perceptron (MLP) and neural network models, and learn how these can be used to capture the complex relationship between variables to more accurately predict CTR. Lastly, you’ll explore how to apply the basics of hyperparameter tuning and regularization to classification models.

Exercise 1: Introduction to deep learning Exercise 2: Understanding MLPs Exercise 3: Beginning model Exercise 4: MLPs for CTR Exercise 5: Hyperparameter tuning in deep learning Exercise 6: Hyperparameter tuning in MLPs Exercise 7: Varying hyperparameters Exercise 8: MLP Grid Search Exercise 9: Model evaluation Exercise 10: F-beta score Exercise 11: Low precision and high AUC Exercise 12: Precision, ROI, and AUC

Current Exercise

Exercise 13: Model review and comparison Exercise 14: Model comparison warmup Exercise 15: Evaluating precision and ROI Exercise 16: Total scoring Exercise 17: Wrap-up video