Data Mining:
Applications
Applications and Trends in
Data Mining
Data mining applications
Data mining system products and
research prototypes
Additional themes on data mining
Social impact of data mining
Trends in data mining
Summary
Data Mining Applications
Data mining is a young discipline with
wide and diverse applications
There is still a nontrivial gap between general
principles of data mining and domain-specific,
effective data mining tools for particular
applications
Some application domains (covered in
this chapter)
Biomedical and DNA data analysis
Financial data analysis
Retail industry
Telecommunication industry
Biomedical Data Mining
and DNA Analysis
DNA sequences: 4 basic building blocks (nucleotides):
adenine (A), cytosine (C), guanine (G), and thymine (T).
Gene: a sequence of hundreds of individual nucleotides
arranged in a particular order
Humans have around 100,000 genes
Tremendous number of ways that the nucleotides can be
ordered and sequenced to form distinct genes
Semantic integration of heterogeneous, distributed genome
databases
Current: highly distributed, uncontrolled generation and
use of a wide variety of DNA data
Data cleaning and data integration methods developed in
data mining will help
DNA Analysis:
Examples
Similarity search and comparison among DNA sequences
Compare the frequently occurring patterns of each class (e.g.,
diseased and healthy)
Identify gene sequence patterns that play roles in various
diseases
Association analysis: identification of co-occurring gene sequences
Most diseases are not triggered by a single gene but by a
combination of genes acting together
Association analysis may help determine the kinds of genes
that are likely to co-occur together in target samples
Path analysis: linking genes to different disease development
stages
Different genes may become active at different stages of the
disease
Develop pharmaceutical interventions that target the different
stages separately
Visualization tools and genetic data analysis
Data Mining for Financial Data
Analysis
Financial data collected in banks and financial institutions
are often relatively complete, reliable, and of high quality
Design and construction of data warehouses for
multidimensional data analysis and data mining
View the debt and revenue changes by month, by region,
by sector, and by other factors
Access statistical information such as max, min, total,
average, trend, etc.
Loan payment prediction/consumer credit policy analysis
feature selection and attribute relevance ranking
Loan payment performance
Consumer credit rating
Financial Data
Mining
Classification and clustering of customers
for targeted marketing
multidimensional segmentation by nearest-
neighbor, classification, decision trees, etc. to
identify customer groups or associate a new
customer to an appropriate customer group
Detection of money laundering and other
financial crimes
integration of from multiple DBs (e.g., bank
transactions, federal/state crime history DBs)
Tools: data visualization, linkage analysis,
classification, clustering tools, outlier analysis,
and sequential pattern analysis tools (find
unusual access sequences)
Data Mining for Retail
Industry
Retail industry: huge amounts of data on
sales, customer shopping history, etc.
Applications of retail data mining
Identify customer buying behaviors
Discover customer shopping patterns and trends
Improve the quality of customer service
Achieve better customer retention and satisfaction
Enhance goods consumption ratios
Design more effective goods transportation and
distribution policies
Data Mining in Retail Industry:
Examples
Design and construction of data warehouses based on
the benefits of data mining
Multidimensional analysis of sales, customers,
products, time, and region
Analysis of the effectiveness of sales campaigns
Customer retention: Analysis of customer loyalty
Use customer loyalty card information to register
sequences of purchases of particular customers
Use sequential pattern mining to investigate
changes in customer consumption or loyalty
Suggest adjustments on the pricing and variety of
goods
Purchase recommendation and cross-reference of
items
Data Mining for Telecomm.
Industry (1)
A rapidly expanding and highly competitive industry
and a great demand for data mining
Understand the business involved
Identify telecommunication patterns
Catch fraudulent activities
Make better use of resources
Improve the quality of service
Multidimensional analysis of telecommunication data
Intrinsically multidimensional: calling-time,
duration, location of caller, location of callee, type
of call, etc.
Data Mining for Telecomm.
Industry (2)
Fraudulent pattern analysis and the identification of unusual
patterns
Identify potentially fraudulent users and their atypical
usage patterns
Detect attempts to gain fraudulent entry to customer
accounts
Discover unusual patterns which may need special
attention
Multidimensional association and sequential pattern analysis
Find usage patterns for a set of communication services
by customer group, by month, etc.
Promote the sales of specific services
Improve the availability of particular services in a region
Use of visualization tools in telecommunication data analysis
Applications and Trends in
Data Mining
Data mining applications
Data mining system products and
research prototypes
Additional themes on data mining
Social impact of data mining
Trends in data mining
Summary
How to choose a data mining
system?
Commercial data mining systems have little in common
Different data mining functionality or methodology
May even work with completely different kinds of data
sets
Need multiple dimensional view in selection
Data types: relational, transactional, text, time
sequence, spatial?
System issues
running on only one or on several operating systems?
a client/server architecture?
Provide Web-based interfaces and allow XML data as
input and/or output?
How to Choose a Data Mining
System? (2)
Data sources
ASCII text files, multiple relational data sources
support ODBC connections (OLE DB, JDBC)?
Data mining functions and methodologies
One vs. multiple data mining functions
One vs. variety of methods per function
More data mining functions and methods per function
provide the user with greater flexibility and analysis power
Coupling with DB and/or data warehouse
systems
Four forms of coupling: no coupling, loose coupling,
semitight coupling, and tight coupling
Ideally, a data mining system should be tightly coupled with
a database system
How to Choose a Data Mining
System? (3)
Scalability
Row (or database size) scalability
Column (or dimension) scalability
Curse of dimensionality: it is much more challenging
to make a system column scalable that row scalable
Visualization tools
“A picture is worth a thousand words”
Visualization categories: data visualization, mining
result visualization, mining process visualization,
and visual data mining
Data mining query language and graphical user
interface
Easy-to-use and high-quality graphical user
interface
Essential for user-guided, highly interactive data
mining
Examples of Data Mining
Systems (1)
IBM Intelligent Miner
A wide range of data mining algorithms
Scalable mining algorithms
Toolkits: neural network algorithms, statistical methods,
data preparation, and data visualization tools
Tight integration with IBM's DB2 relational database
system
SAS Enterprise Miner
A variety of statistical analysis tools
Data warehouse tools and multiple data mining
algorithms
Oracle Darwin
Multiple data mining algorithms: NN & Decision Tree
optimized
Loose Integration with Oracle 8i
Advanced visualization tools
Examples of Data Mining
Systems (2)
SGI MineSet
Multiple data mining algorithms and advanced statistics
Advanced visualization tools
Clementine (SPSS)
An integrated data mining development environment for
end-users and developers
Multiple data mining algorithms and visualization tools
DBMiner (DBMiner Technology Inc.)
Multiple data mining modules: discovery-driven OLAP
analysis, association, classification, and clustering
Efficient, association and sequential-pattern mining
functions, and visual classification tool
Mining both relational databases and data warehouses
Applications and Trends in
Data Mining
Data mining applications
Data mining system products and
research prototypes
Additional themes on data mining
Social impact of data mining
Trends in data mining
Summary
Visual Data Mining
Visualization: use of computer graphics to create visual
images which aid in the understanding of complex, often
massive representations of data
Visual Data Mining: the process of discovering implicit but
useful knowledge from large data sets using visualization
techniques
Purpose of Visualization
Gain insight into an information space by mapping data
onto graphical primitives
Provide qualitative overview of large data sets
Search for patterns, trends, structure, irregularities,
relationships among data.
Help find interesting regions and suitable parameters for
further quantitative analysis.
Provide a visual proof of computer representations derived
Visual Data Mining & Data
Visualization
Integration of visualization and data mining
data visualization
data mining result visualization
data mining process visualization
interactive visual data mining
Data visualization
Data in a database or data warehouse can be
viewed
at different levels of granularity or
abstraction
as different combinations of attributes or
dimensions
Data can be presented in various visual forms
Data Mining Result
Visualization
Presentation of the results or knowledge
obtained from data mining in visual forms
Examples
Scatter plots and boxplots (obtained from
descriptive data mining)
Decision trees
Association rules
Clusters
Outliers
Generalized rules
SAS Enterprise Miner: scatter
plots
Association rules in MineSet
3.0
Visualization of a decision tree in
MineSet 3.0
Cluster groupings in IBM
Intelligent Miner
Data Mining Process
Visualization
Presentation of the various processes of
data mining in visual forms so that users
can see
How the data are extracted
From which database or data warehouse they
are extracted
How the selected data are cleaned,
integrated, preprocessed, and mined
Which method is selected at data mining
Where the results are stored
How they may be viewed
Data Mining Processes by
Clementine
Interactive Visual Data
Mining
Using visualization tools in the data mining
process to help users make smart data
mining decisions
Example
Display the data distribution in a set of attributes
using colored sectors or columns (depending on
whether the whole space is represented by either
a circle or a set of columns)
Use the display to which sector should first be
selected for classification and where a good split
point for this sector may be
Audio Data Mining
Uses audio signals to indicate the patterns of data
or the features of data mining results
An interesting alternative to visual mining
An inverse task of mining audio (such as music)
databases which is to find patterns from audio
data
Visual data mining may disclose interesting
patterns using graphical displays, but requires
users to concentrate on watching patterns
Instead, transform patterns into sound and music
and listen to pitches, rhythms, tune, and melody in
order to identify anything interesting or unusual
Scientific and Statistical Data
Mining (1)
There are many well-established statistical techniques
for data analysis, particularly for numeric data
applied extensively to data from scientific experiments and
data from economics and the social sciences
Regression
predict the value of a response (dependent) variable from one
or more predictor (independent) variables where the variables
are numeric
forms of regression: linear, multiple, weighted, polynomial,
nonparametric, and robust
Generalized linear models
allow a categorical response variable (or some transformation
of it) to be related to a set of predictor variables
similar to the modeling of a numeric response variable using
linear regression
include logistic regression and Poisson regression
Scientific and Statistical Data
Mining (2)
Regression trees
Binary trees used for classification and prediction
Similar to decision trees:Tests are performed at the internal
nodes
Difference is at the leaf level
In a decision tree a majority voting is performed to assign a class
label to the leaf
In a regression tree the mean of the objective attribute is
computed and used as the predicted value
Analysis of variance
Analyze experimental data for two or more populations
described by a numeric response variable and one or more
categorical variables (factors)
Mixed-effect models
For analyzing grouped data, i.e. data that can be classified
according to one or more grouping variables
Typically describe relationships between a response variable
and some covariates in data grouped according to one or more
factors
Scientific and Statistical Data
Mining (3)
Factor analysis
determine which vars are combined to generate a given factor
e.g., for many psychiatric data, one can indirectly measure
other quantities (such as test scores) that reflect the factor of
interest
Discriminant analysis
predict a categorical response variable, commonly used in
social science
Attempts to determine several discriminant functions (linear
combinations of the independent variables) that discriminate
among the groups defined by the response variable
Time series: many methods such as autoregression, ARIMA
(Autoregressive integrated moving-average modeling), long
memory time-series modeling
Survival analysis
predict the probability that a patient undergoing a medical
treatment would survive at least to time t (life span prediction)
Quality control
display group summary charts
Theoretical Foundations of Data
Mining (1)
Data reduction
The basis of data mining is to reduce the data
representation
Trades accuracy for speed in response
Data compression
The basis of data mining is to compress the
given data by encoding in terms of bits,
association rules, decision trees, clusters, etc.
Pattern discovery
The basis of data mining is to discover patterns
occurring in the database, such as associations,
classification models, sequential patterns, etc.
Theoretical Foundations of Data
Mining (2)
Probability theory
The basis of data mining is to discover joint probability
distributions of random variables
Microeconomic view
A view of utility: the task of data mining is finding
patterns that are interesting only to the extent in that
they can be used in the decision-making process of
some enterprise
Inductive databases
Data mining is the problem of performing inductive
logic on databases,
The task is to query the data and the theory (i.e.,
patterns) of the database
Popular among many researchers in database systems
Data Mining and Intelligent
Query Answering
Query answering
Direct query answering: returns exactly what is
being asked
Intelligent (or cooperative) query answering:
analyzes the intent of the query and provides
generalized, neighborhood or associated information
relevant to the query
Some users may not have a clear idea of
exactly what to mine or what is contained in
the database
Intelligent query answering analyzes the user's
intent and answers queries in an intelligent way
Data Mining and Intelligent
Query Answering (2)
A general framework for the integration of data mining and
intelligent query answering
Data query: finds concrete data stored in a database
Knowledge query: finds rules, patterns, and other kinds
of knowledge in a database
Ex. Three ways to improve on-line shopping service
Informative query answering by providing summary
information
Suggestion of additional items based on association
analysis
Product promotion by sequential pattern mining
Applications and Trends in
Data Mining
Data mining applications
Data mining system products and
research prototypes
Additional themes on data mining
Social impact of data mining
Trends in data mining
Summary
Is Data Mining a Hype or Will
It Be Persistent?
Data mining is a technology
Technological life cycle
Innovators
Early adopters
Chasm
Early majority
Late majority
Laggards
Life Cycle of Technology
Adoption
Data mining is at Chasm!?
Existing data mining systems are too generic
Need business-specific data mining solutions
and smooth integration of business logic with
data mining functions
Social Impacts: Threat to
Privacy
Is data mining a threat to privacy and data
security?
“Big Brother”, “Big Banker”, and “Big Business” are
carefully watching you
Profiling information is collected every time
You use your credit card, debit card, supermarket loyalty card, or
frequent flyer card, or apply for any of the above
You surf the Web, reply to an Internet newsgroup, subscribe to a
magazine, rent a video, join a club, fill out a contest entry form,
You pay for prescription drugs, or present you medical care
number when visiting the doctor
Collection of personal data may be beneficial for
companies and consumers, there is also potential for
misuse
Protect Privacy and Data
Security
Fair information practices
International guidelines for data privacy protection
Cover aspects relating to data collection, purpose,
use, quality, openness, individual participation, and
accountability
Purpose specification and use limitation
Openness: Individuals have the right to know what
information is collected about them, who has
access to the data, and how the data are being
used
Develop and use data security-enhancing
techniques
Blind signatures
Biometric encryption
Applications and Trends in
Data Mining
Data mining applications
Data mining system products and
research prototypes
Additional themes on data mining
Social impact of data mining
Trends in data mining
Summary
Trends in Data
Mining (1)
Application exploration
development of application-specific data mining
system
Invisible data mining (mining as built-in
function)
Scalable data mining methods
Constraint-based mining: use of constraints to
guide data mining systems in their search for
interesting patterns
Integration of data mining with database
systems, data warehouse systems, and
Web database systems
Trends in Data Mining (2)
Standardization of data mining language
A standard will facilitate systematic development,
improve interoperability, and promote the education
and use of data mining systems in industry and
society
Visual data mining
New methods for mining complex types of data
More research is required towards the integration of
data mining methods with existing data analysis
techniques for the complex types of data
Web mining
Privacy protection and information security in
data mining
Applications and Trends in
Data Mining
Data mining applications
Data mining system products and
research prototypes
Additional themes on data mining
Social impact of data mining
Trends in data mining
Summary
Summary
Domain-specific applications include biomedicine (DNA),
finance, retail and telecommunication data mining
There exist some data mining systems and it is
important to know their power and limitations
Visual data mining include data visualization, mining
result visualization, mining process visualization and
interactive visual mining
There are many other scientific and statistical data
mining methods developed but not covered in this book
Also, it is important to study theoretical foundations of
data mining
Intelligent query answering can be integrated with
mining
It is important to watch privacy and security issues in
data mining
References (1)
M. Ankerst, C. Elsen, M. Ester, and H.-P. Kriegel. Visual classification: An
interactive approach to decision tree construction. KDD'99, San Diego, CA, Aug.
1999.
P. Baldi and S. Brunak. Bioinformatics: The Machine Learning Approach. MIT
Press, 1998.
S. Benninga and B. Czaczkes. Financial Modeling. MIT Press, 1997.
L. Breiman, J. Friedman, R. Olshen, and C. Stone. Classification and Regression
Trees. Wadsworth International Group, 1984.
M. Berthold and D. J. Hand. Intelligent Data Analysis: An Introduction. Springer-
Verlag, 1999.
M. J. A. Berry and G. Linoff. Mastering Data Mining: The Art and Science of
Customer Relationship Management. John Wiley & Sons, 1999.
A. Baxevanis and B. F. F. Ouellette. Bioinformatics: A Practical Guide to the
Analysis of Genes and Proteins. John Wiley & Sons, 1998.
Q. Chen, M. Hsu, and U. Dayal. A data-warehouse/OLAP framework for scalable
telecommunication tandem traffic analysis. ICDE'00, San Diego, CA, Feb. 2000.
W. Cleveland. Visualizing Data. Hobart Press, Summit NJ, 1993.
S. Chakrabarti, S. Sarawagi, and B. Dom. Mining surprising patterns using
temporal description length. VLDB'98, New York, NY, Aug. 1998.
References (2)
J. L. Devore. Probability and Statistics for Engineering and the Science, 4th ed.
Duxbury Press, 1995.
A. J. Dobson. An Introduction to Generalized Linear Models. Chapman and Hall, 1990.
B. Gates. Business @ the Speed of Thought. New York: Warner Books, 1999.
M. Goebel and L. Gruenwald. A survey of data mining and knowledge discovery
software tools. SIGKDD Explorations, 1:20-33, 1999.
D. Gusfield. Algorithms on Strings, Trees and Sequences, Computer Science and
Computation Biology. Cambridge University Press, New York, 1997.
J. Han, Y. Huang, N. Cercone, and Y. Fu. Intelligent query answering by knowledge
discovery techniques. IEEE Trans. Knowledge and Data Engineering, 8:373-390,
1996.
R. C. Higgins. Analysis for Financial Management. Irwin/McGraw-Hill, 1997.
C. H. Huberty. Applied Discriminant Analysis. New York: John Wiley & Sons, 1994.
T. Imielinski and H. Mannila. A database perspective on knowledge discovery.
Communications of ACM, 39:58-64, 1996.
D. A. Keim and H.-P. Kriegel. VisDB: Database exploration using multidimensional
visualization. Computer Graphics and Applications, pages 40-49, Sept. 94.
References (3)
J. M. Kleinberg, C. Papadimitriou, and P. Raghavan. A microeconomic view of
data mining. Data Mining and Knowledge Discovery, 2:311-324, 1998.
H. Mannila. Methods and problems in data mining. ICDT'99 Delphi, Greece, Jan.
1997.
R. Mattison. Data Warehousing and Data Mining for Telecommunications.
Artech House, 1997.
R. G. Miller. Survival Analysis. New York: Wiley, 1981.
G. A. Moore. Crossing the Chasm: Marketing and Selling High-Tech Products to
Mainstream Customers. Harperbusiness, 1999.
R. H. Shumway. Applied Statistical Time Series Analysis. Prentice Hall, 1988.
E. R. Tufte. The Visual Display of Quantitative Information. Graphics Press,
Cheshire, CT, 1983.
E. R. Tufte. Envisioning Information. Graphics Press, Cheshire, CT, 1990.
E. R. Tufte. Visual Explanations : Images and Quantities, Evidence and
Narrative. Graphics Press, Cheshire, CT, 1997.
M. S. Waterman. Introduction to Computational Biology: Maps, Sequences, and
Genomes (Interdisciplinary Statistics). CRC Press, 1995.
