Predictive Analytics by Eric Siegel - Book review

Predictive Analytics

The Power to Predict Who Will Click, Buy, Lie, or Die

By: Eric Siegel

Published: February 19, 2013
Format: Hardcover, 320 pages
ISBN-10: 1118356853
ISBN-13: 978-1118356852
Publisher: John Wiley & Sons, Inc.











"Compelled to grow and propelled to the mainstream, predictive technology is commonplace and affects everyone, every day. It impacts your experiences in undetectable ways as you drive, shop, study, vote, see the doctor, communicate, watch TV, earn, borrow, or even steal", writes founder of Predictive Analytics World and Text Analytics World, Eric Siegel, in his groundbreaking and endlessly fascinating book Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die. The author describes the achievements of computer based prediction, and of the people and the science behind meeting its difficult challenges.

Eric Siegel understands that the concept of computerized predictions may appear simple on the surface, but that there are also multiple and complex variables and concepts operating beneath. The author points out that this myriad of factors must come together to reach a conclusion in the form of a prediction. Eric Siegel provides the solution in the form of machine learning where computers actually learn as they add more knowledge and capabilities through the constant infusion of ever increasing amounts of data. The author makes clear that predictions are different from forecasts. Predictions work at the individual level, while forecasts are geared to the macro level of society.



Eric Siegel (photo left) recognizes that predictions are not always accurate, but hre result is always better than decisions based entirely on guesses. As a result, predictions, despite varying levels of accuracy, produce huge dividends. Eric Siegel offers insights into how prediction and learning from data leads to the steps involving the actions taken based on those same predictions.

Eric Siegel guides the reader through the following aspects of predictive analytics, and shares a balanced assessment of the realities and challenges involved in the use of data, machine learning, and predictions:

* The prediction effect
* Liftoff: Prediction takes action - deployment
* With power comes responsibility - ethics
* The data effect: The glut at the end of the rainbow - data
* The machine that learns: Prediction of mortgage risk - modeling
* The ensemble effect: Crowdsourcing and supercharging prediction - ensembles
* Watson and the Jeopardy! challenge - question answering
* Persuasion by the numbers - uplift

For me, the power of the book is how Eric Siegel combines a comprehensive examination of both how and why predictive analytics works, with real world examples of the prediction processes in action. The author presents a complete and balanced view of the basic principles surrounding and the interrelationship between predictive analytics, machine learning, and big data. The author adds to the understanding of the concepts through real world examples of how predictive analytics was used by various organizations. Eric Siegel demonstrates how data is utilized to make predictions, and how through machine learning, the predictions become ever more accurate through the addition of ever more data.

Eric Siegel acknowledges that the predictions may not always be correct, but also stresses how data based predictions are vastly superior to mere guesses. Eric Siegel includes an important chapter on the role of ethics and how predictive analytics and data can be misused by various agencies. As added value in the book, the author includes a list of five effects of prediction, twenty-one applications of predictive analysis, and list of people using the principles. As is appropriate for an academically oriented book, there are extensive notes and acknowledgements as well.

I highly recommend the insightful and enlightening book Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die by Eric Siegel, to any business leaders, marketers, non-profit organization executives, and anyone who may be seeking a thoughtful and informative primer on the basics of predictive analytics. This book presents an opportunity to understand more fully how data is used to predict the actions of individuals, and how these predictions will affect the future.