Math for Marketers

Important Concepts You May Have Forgotten or Glossed-Over In School

In Why Do We Learn Math?, BetterExplained talks about why we all need to internalize math in other to be successful:

I cringe when hearing Math teaches you to think.

It’s a well-meaning but ineffective appeal that only satisfies existing fans (see: Reading takes you anywhere!). What activity, from crossword puzzles to memorizing song lyrics, doesn’t help you think?

Math seems different, and here’s why: it’s a specific, powerful vocabulary for ideas.

Imagine a cook who only knows the terms yummy and yucky. He makes a bad meal. What’s wrong? Hrm. There’s no way to describe it! Too mild? Salty? Sweet? Sour? Cold? These specific critiques become hazy variations of the yucky bucket. He probably wouldn’t think Needs more umami.

Words are handholds that latch onto thoughts. You (yes, you!) think with extreme mathematical sophistication. Your common-sense understanding of quantity includes concepts refined over millennia: base-10 notation, zero, decimals, negatives.

What we call Math are just the ideas we haven’t yet internalized.

As a copywriter, this clicked for me. Math isn’t some foreign concept reserved for the halls of higher education. It’s something we do all the time. Refusing to learn math properly as a marketer is like a writer refusing to learn how to read.

So, let’s dive into some very practical marketing-related mathematical applications.

1. Probability and Statistics: Deciphering Consumer Behaviour

Probability and statistics serve as the backbone of data analysis, helping marketers make sense of complex consumer behaviours. By understanding the likelihood of certain events and analyzing patterns within data sets, marketers can make informed decisions. Concepts such as regression analysis, A/B testing, and statistical significance play pivotal roles in evaluating the success of marketing campaigns and optimizing for better outcomes.

Basic Concept: Probability
Probability is the measure of the likelihood that an event will occur. In marketing, it helps predict outcomes and assess risks. For example, understanding the probability of a user clicking on an ad allows marketers to allocate resources more effectively.

Learn more: Khan Academy - Introduction to Probability

Basic Concept: Statistical Significance
Statistical significance is crucial for determining whether observed differences in data are real or due to chance. A/B testing in marketing relies on statistical significance to assess the impact of changes accurately.

Learn more: Statistics How To - What is Statistical Significance?

Basic Concept: Normal Distribution
Normal distribution, or the bell curve, is a common probability distribution in statistics. Marketers often encounter it when analyzing customer behavior data. Understanding the normal distribution helps in making predictions and setting benchmarks.

Learn more: Math is Fun - Normal Distribution

2. Game Theory: Strategic Decision-Making

Game theory, often associated with economics, has found its way into marketing strategy. Marketers can use game theory to model competitive situations and predict the actions of competitors. This mathematical framework aids in strategic decision-making, allowing marketers to anticipate market responses and optimize their own strategies for maximum impact.

Basic Concept: Nash Equilibrium
Nash Equilibrium is a central concept in game theory where no player has an incentive to change their strategy given the strategies of others. In marketing, understanding the Nash Equilibrium can aid in predicting competitor behaviour.

Learn more: Game Theory 101 - Nash Equilibrium

Basic Concept: Prisoner’s Dilemma
The Prisoner’s Dilemma is a classic game theory scenario that explores cooperation and competition. Marketers can use this concept to analyze situations where collaboration might lead to better outcomes for all parties involved.

Learn more: Stanford Encyclopedia of Philosophy - Prisoner’s Dilemma

Basic Concept: Zero-Sum Game
In a zero-sum game, one participant’s gain or loss is exactly balanced by the losses or gains of other participants. Marketers encounter zero-sum scenarios when competing for a fixed market share or resources.

Learn more: Investopedia - Zero-Sum Game

3. Optimization: Maximizing ROI

Optimization, a key mathematical concept, is the process of making something as effective or functional as possible. For marketers, this translates into maximizing return on investment (ROI). Whether it’s allocating budget across various channels or determining the optimal timing for a campaign, optimization techniques like linear programming and algorithmic optimization can help marketers achieve their goals efficiently.

Basic Concept: Linear Programming
Linear programming is a method to achieve the best outcome in a mathematical model with linear relationships. In marketing, linear programming can be applied to budget allocation, helping maximize ROI.

Learn more: spiceworks - What Is Linear Programming? Meaning, Methods, and Examples

Basic Concept: Pareto Efficiency
Pareto efficiency occurs when it’s impossible to make any one individual better off without making at least one individual worse off. Marketers can apply this concept when optimizing marketing strategies to ensure maximum efficiency.

Learn more: Investopedia - Pareto Efficiency

Basic Concept: Gradient Descent
Gradient descent is an optimization algorithm used to minimize functions iteratively. In marketing, it can be applied to fine-tune parameters in machine learning models or optimize ad campaign performance.

Learn more: builtin - Gradient Descent in Machine Learning: A Basic Introduction

4. Data Modelling: Predictive Analytics

Predictive analytics involves using statistical algorithms and machine learning techniques to identify the likelihood of future outcomes based on historical data. Marketers can leverage data modelling to predict customer behaviour, tailor personalized campaigns, and optimize marketing strategies for better engagement. Understanding concepts like clustering, decision trees, and regression models can significantly enhance a marketer’s ability to forecast trends.

Basic Concept: Regression Analysis
Regression analysis helps identify relationships between variables. In marketing, it’s used to predict outcomes based on historical data, such as forecasting sales or understanding the impact of different advertising channels.

Learn more: Investopedia - What is Regression? Definition, Calculation, and Example

Basic Concept: Decision Trees
Decision trees are a predictive modelling tool used in data mining. Marketers can use decision trees to map out customer journeys and make strategic decisions based on various scenarios.

Learn more: Towards Data Science - Understanding Decision Trees (once and for all!)

Basic Concept: Clustering
Clustering involves grouping similar data points together. Marketers can use clustering to identify segments of their target audience with similar characteristics, enabling more personalized and effective marketing strategies.

Learn more: DataCamp - Unsupervised Learning in Python: Clustering

5. Network Theory: Building Connections

In the digital age, understanding the dynamics of networks is crucial for marketers. Network theory, a branch of applied mathematics, can help marketers identify influential nodes in social networks, understand the spread of information, and optimize influencer marketing strategies. By applying graph theory and network analysis, marketers can strategically build and leverage connections to amplify their reach.

Basic Concept: Graph Theory
Graph theory is the study of graphs, which consist of nodes connected by edges. In marketing, understanding graph theory helps identify influential nodes in social networks, optimizing strategies for maximum impact.

Learn more: MIT OpenCourseWare - Introduction to Graph Theory

Basic Concept: Centrality Measures
Centrality measures, such as betweenness and eigenvector centrality, help identify the importance of nodes in a network. Marketers can use these measures to target influential individuals or channels in their marketing strategies.

Learn more: Social Network Analysis in Python - Centrality Measures

Basic Concept: Small World Phenomenon
The small world phenomenon describes the short path lengths between nodes in a network. Marketers can leverage this concept to understand how information spreads quickly through social networks, guiding the development of viral marketing strategies.

Learn more: Cornell University - The Small-World Phenomenon (PDF)

Wrapping It Up

So there you have it: Five subjects with three basic concepts each, for 15 super-helpful concepts for marketers. (Wait a tic, did I just do math? Mathematical!)

Once upon a time, marketers could get away with being bad at math. Our main contribution was our creativity. But these days, that’s just not going to cut it. Yes, we need to be creative. And yes, I still think creativity is our biggest strength and key to job security in the face of artificial intelligence eating up all the work.

But we also need to be fiercely analytical.

Wrapping our heads around these concepts means not being left behind by the quants and data wizards out there. With just a little bit of work, we can hold our own, and develop fact-based strategies that will allow our creativity to shine where it matters most.

Bonus for ChatGPT Plus Users

Do you have a paid ChatGPT account? If so, I have a special treat for you. I created a GPT called MathGPT to help tutor me in various mathematical concepts. I found it so useful, I thought I’d share it with you:

👩‍🏫 MathGPT

If you only have access to a free ChatGPT account, you can get a similar experience (albeit powered by GPT 3.5 instead of 4) by using this prompt:

You are the world's greatest math teacher, able to explain complex mathematical concept in simple terms. You will prompt the user with math questions. If they get it right, you'll move onto the next question, progressively adding concepts until the user has mastered the subject. If they get an answer wrong, you'll explain the process for arriving at the right answer, and then ask them a similar question. Repeat until they've mastered the subject, then move onto the next more advanced math subject.

You can use this to learn any math subject you like. Just ask it to teach you by prompting it with something like: “Teach me about Game Theory”. Or, you can simply say “teach me” and it will try to determine where your basic math skills are at and help you learn additional math concepts, one step at a time, until you’ve mastered it.