13. Are mean, median, and mode different things?
The basics of central tendency that all marketers need to understand.
Recently, as part of my data science certification, I had to revisit the fundamental statistical concepts of Mean, Median, and Mode.
It struck me that, as a marketer, I had never given much thought to median and mode.
This image illustrates the difference between these metrics:
As you can see, if the data is normally distributed, i.e., follows a bell curve, then mean, median, and mode are the same values. However, if the data is not symmetrical, these 3 statistics are different.
Marketers have to deal with skewed data in many real-life scenarios, such as -
The income distribution in most countries is right-skewed, meaning that a large number of people earn relatively low incomes while a small number of individuals earn significantly higher incomes.
The number of page views on a website and social media engagement metrics (likes, shares, comments) often show a highly right-skewed distribution. A large number of pages might receive a few views, while a small number of pages (like the homepage or popular articles) receive a vast majority of the traffic.
Here is a typical snapshot of the average monthly website user count. Since this data might be affected by seasonality and show unusual peaks, the median is a better statistic than its mean.
Mode, or the most frequent value, is the right measure of categorical data, such as the primary user acquisition channel.
Since outliers are common in digital marketing datasets, marketers need to develop a better appreciation of measures of central tendencies other than the average.
Questions to ask before identifying the right statistic would be -
What is the level of measurement of the data?
Nominal data: Mode
Ordinal data: Median is typically the most informative, but mode can also be used.
Interval and Ratio data: it depends
Are there outliers in the data?
Yes - use median
What is the purpose of the analysis?
Average behavior - Mean
Typical case - Median
Most common - Mode
I have created a handy reference that explains each statistic and its appropriate use for marketers. I hope you find this useful!
