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Evaluation metrics

Before applying an ML algorithm, we need to consider how to assess the effectiveness of our strategy. In some cases, we can use part of our data to simulate the performance of the algorithm. However, on other occasions, the only viable way to evaluate the application of an algorithm is by doing some controlled testing (A/B testing) and determining whether the use cases in which the algorithm was applied resulted in a better outcome. In our music streaming example, this could mean selecting a panel of users and recommending songs to them using the new algorithm. We can run statistical tests to determine whether these users effectively stayed longer on the platform. Evaluation metrics should be determined based on the business KPIs and should show significant improvement over existing processes.

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