Labeled vs Unlabeled Data for machine learning Project With Direct Examples

Hrvoje Smolic
Co-Founder, CEO, Graphite Note

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Labeled vs Unlabeled Data

Artificial intelligence (AI) is now a vital part of the business. The use of machine learning (ML) helps business owners and manufacturers reduce process-driven losses, increase sales, and lower expenses through predictive maintenance. In this article, we want to explain how the right dataset (Labeled vs Unlabeled Data) for machine learning project can help organizations use predictive analysis.

ML automates data analysis through analytical model building. ML is a branch of AI that uses systems to analyze data, identify patterns in the data, and make decisions with little intervention from humans. ML allows software applications to be more accurate, and algorithms in ML use various types of data to predict new values. 

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Labeled vs Unlabeled Data - definition

Welcome to the world of machine learning where data is the backbone of any project. The quality and quantity of data available plays a crucial role in the success of any machine learning model. One of the most important aspects of data preparation is labeling, which is the process of assigning meaningful labels to the data. In this article, we will dive into the concept of labeled vs unlabeled data and why it is crucial for any machine learning project.

We will also discuss the direct examples of labeled and unlabeled data and how it impacts the performance of the model. Understanding the difference between labeled and unlabeled data is essential for any machine learning practitioner, data scientist, and even a business leader who wants to leverage the power of machine learning for their organization.

ML requires the use of data, and there are two kinds of datasets: 

Labeled and unlabeled. 

Unlabeled datasets are samples of natural or human-made items. Unlabeled data might include photo images, audio and video recordings, articles, Tweets, medical scans, or news. These items have no labels or explanations; they are merely data. 

Labeled datasets, meanwhile, use human judgement to classify a piece of unlabeled data. The labels depend on the problem that needs to be resolved; so if a business wants to predict the behavior of a customer, it uses the information about the customer to try to predict whether the consumer will complete a deal or not, for example. 

Machine Learning Models and How They Use Data

ML models can help businesses resolve problems such as forecasting market prices, but it all depends on the tasks that require resolution. ML modeling uses three main groups to do this: 

Supervised Learning (uses labeled data)

Supervised learning uses labeled datasets in algorithms to classify data and predict outcomes. Supervised learning is used in most software applications these days; these include text processes and image recognition. It also helps companies solve real-world problems, such as classifying tope leads, customers about to cancel your service and separating spam in your email inbox. 

Labeled Data example
Image by the author - labeled dataset for lead scoring

The labeled datasets used in supervised learning adds labels to the observations, and these labels come from observations from specialists or experts in the field. These labeled datasets then go through classification and regression algorithms to make a predictive analysis.

Classification algorithm in supervised learning is used when a class label is predicted based on the given data. So the model predicts or classifies whether the customer will cancel or not, or whether the data is a motorcycle or not, for example. 

Classification predicts a state, such as answering a positive or negative outcome. Some models use larger sets of states, and these could include the following real-world situations: 

  • Classifying negative or positive reviews of a business, movie, or service, based on the words used or the ratings given;
  • Classifying whether sales leads will convert based on historical behavior
  • Classifying whether customer will cancel service based on historical behavior
  • Predicting if a user will click on a link based on past website interaction and user demographics;
  • Classifying whether social media users will befriend or interact with other users based on a list of mutual friends, demographics, interests, and user history.

Another method used in supervised machine learning is regression analysis. Regression predicts numbers, like price, revenue, costs, etc.

Regression modeling can predict numbers based on the features of the data. Regression can be used in the following real-world situations to determine: 

  • The price of houses in the housing market based on location, dimension of the house, number of rooms and facilities;
  • The amount someone will spend on a product - based on purchase behavior and transaction history;
  • The expected lifespan of a patient, using data based on symptoms, health history, and medical records.

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Unsupervised Learning (uses unlabeled data)

Unsupervised learning uses unlabeled datasets and more difficult algorithms. Since the datasets are not labeled and very little information has been collected, the outcomes or predictions are also unlabeled. However, unlabeled datasets used in unsupervised learning could still reveal useful information. For example, the model can still inform users whether the data is similar or not, and could group the data based on similarity alone. 

Unlabeled Data example
Image by the Author: Clustering in Graphite Note

Unsupervised machine learning is the branch that deals with unlabeled datasets. There are two types of unsupervised learning: 

  • clustering and 
  • dimensionality reduction. 

Clustering groups data based on similarity. So, if the data has a set of images of random animals in a field, for example, it might group the data based on the number of animals in an image, or the color of the animals. 

Here are some real-world examples of how clustering can be used in business:

  • Real estate firms could split properties by location, price, or number of rooms;
  • Customer segmentation based on purchase history
  • Product segmentation based on purchase history
  • Businesses could cluster unlabeled email based on the sender, the words used in the subject line, or whether there are attachments or links in the message. 

Dimensionality reduction simplifies the data and describes it using very few features. It only focuses on the most important features and removes the noise that overcomplicates a dataset. The fewer dimensions used for the data, the fewer parameters there are in the model. This gives the model more room to fit in new data, which could then be used for visualization and as a training model. 

Reinforcement Learning 

Reinforcement learning uses no data and instead uses an environment and an agent to achieve specific goals in the environment. The environment then provides the possible outcomes, whether it is a "reward" or "punishment", which then guides the agent in future situations to complete its goal. Reinforcement learning focuses on finding a balance between exploration and the agent’s use of current knowledge to exploit the environment. 

One real-world example of reinforcement learning is predicting stock prices. Using reinforcement learning in this area allows an agent to buy, sell, or hold a stock. They can also evaluate market conditions to take the right course of action at the most favorable time. 

There are many ways artificial intelligence can help organizations achieve their goals. Collecting data is important, but it’s not enough. Businesses and companies must be able to arrange this data to inform their decision making, whether it’s to improve their performance or to provide the kind of service their target market is looking for. 

Right dataset for machine learning project can help organizations use predictive analysis and help them make more strategic decisions.

In no-code machine learning platforms like Graphite Note, you can train machine learning models based on both labeled and unlabeled data - without writing a single line of code!

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The post content is reviewed and updated periodically to ensure its relevance and accuracy. Last updated: [2023-09-08]

Further Reading

-Precision Versus Recall - Essential Metrics in Machine Learning

- Popular Applications of Machine Learning in Business

- Regression in Machine Learning- What Is It And When To Use

-Discover the Transformative Potential of AutoML Solutions for Your Business

- Top 14 No-Code Machine Learning Platforms To Use

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You can explore all Graphite Models here. This page may be helpful if you are interested in different machine learning use cases. Feel free to try for free and train your machine learning model on any dataset without writing code.


This blog post provides insights based on the current research and understanding of AI, machine learning and predictive analytics applications for companies.  Businesses should use this information as a guide and seek professional advice when developing and implementing new strategies.


At Graphite Note, we are committed to providing our readers with accurate and up-to-date information. Our content is regularly reviewed and updated to reflect the latest advancements in the field of predictive analytics and AI.

Author Bio

Hrvoje Smolic, is the accomplished Founder and CEO of Graphite Note. He holds a Master's degree in Physics from the University of Zagreb. In 2010 Hrvoje founded Qualia, a company that created BusinessQ, an innovative SaaS data visualization software utilized by over 15,000 companies worldwide. Continuing his entrepreneurial journey, Hrvoje founded Graphite Note in 2020, a visionary company that seeks to redefine the business intelligence landscape by seamlessly integrating data analytics, predictive analytics algorithms, and effective human communication.

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