Data Labeling: The Secret Sauce for Machine Learning Success

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Data labeling is a crucial step in the machine learning workflow. Without quality labeled data, machine learning models will fail to deliver accurate results. This makes data labeling the "secret sauce" for successfully training machine learning algorithms.

In this comprehensive guide, we‘ll cover everything you need to know about data labeling for machine learning and provide an overview of the top data labeling tools available today.

What is Data Labeling?

Data labeling refers to the process of assigning labels, categories, or annotations to data points within a dataset. These labels help machine learning algorithms "learn" by identifying patterns and relationships in the data.

For example, in an image dataset used for object recognition, data labeling would involve annotating images with the objects present – labeling images with a dog as "dog", images with a car as "car", and so on.

The quality and accuracy of these applied labels have a huge impact on the performance of machine learning models. Low quality or inconsistent labels introduce noise and make it harder for ML algorithms to discern patterns, hampering their ability to make accurate predictions.

That‘s why properly labeled training data is so important. It provides the fundamental examples that machine learning models rely on to learn.

Why is Data Labeling Important?

Data labeling is a mandatory step for supervised machine learning. Without labeled examples, algorithms have no way to learn.

Consider how you might train a machine learning model to recognize cats:

  • First, you would need a dataset of images containing cats.

  • Next, each image would need to be annotated as either containing a cat or not.

  • These labeled examples then allow the model to associate features and patterns in the "cat" images versus the "non-cat" images.

  • Given enough quality examples, the machine learning model can learn to accurately predict if new images contain cats or not.

This example illustrates why properly labeled data is crucial for developing accurate machine learning systems. Data labeling provides the examples that teach the model.

Beyond accuracy, data labeling enables other key machine learning workflows:

  • Measuring model performance: Labels provide a ground truth benchmark that allows data scientists to evaluate model accuracy on training, validation, and test sets.

  • Identifying bias: Comparing model predictions against real labels can uncover systematic biases in the model.

  • Debugging errors: Errors and inconsistencies in predictions compared to labels help identify areas for improvement.

  • Active learning: Labels allow models to identify areas of uncertainty and request additional data.

Without labels, none of these critical processes would be possible. Data labeling enables learning, evaluation, and improvement. It‘s an indispensable part of the machine learning pipeline.

When Should You Label Your Data?

Ideally, data should be labeled before training begins. This allows the model access to the fully labeled dataset for maximum learning.

However, for very large datasets, it may not be feasible to label everything up front. In these cases, it can be effective to take an iterative, interleaved approach:

  • Start by labeling a small sample of the full dataset
  • Train a baseline model on the labeled subset
  • Use active learning to identify high-value data points for labeling
  • Incrementally label additional data in small batches
  • Retrain the model iteratively on the growing labeled dataset

This approach focuses labeling efforts on the most informative examples, saving time and resources. It allows the project to begin training models before all the data is labeled.

The key is finding the right balance – enough labeled data must be available to train reasonably accurate baseline models and support effective active learning. Starting with a very small labeled sample risks training poorly performing models that provide little value.

Data Labeling Approaches

There are several approaches to labeling data:

Manual Labeling

This refers to human annotation of data points. Experts review examples and manually assign labels according to a predefined taxonomy. While slow and costly, manual labeling yields highly accurate results, especially for complex labeling tasks.

Semi-Automated Labeling

This approach combines humans and machines. Typically, a model makes initial predictions to label data, then humans review and make corrections. This increases efficiency while maintaining accuracy. Active learning is an example of semi-automated labeling guided by models.

Automated Labeling

Fully automated approaches use rule-based systems, scripts, or models to programmatically label data without human review. This speeds up simple repetitive tasks but has lower accuracy for complex ambiguities.


Crowdsourcing tools farm out labeling tasks to a distributed network of human workers. This can scale up manual labeling through parallelization while reducing costs. However, quality control is crucial with crowdsourcing.

Weak Supervision

Weakly supervised techniques use heuristics, constraints, and coarse-grained signals rather than direct exemplars to generate labels. This increases labeling efficiency but can reduce accuracy.

The optimal approach depends on data complexity, project timelines, and labeling accuracy requirements. Typically a hybrid method delivers the best balance.

Data Labeling Tools

Now let‘s look at some of the top data labeling tools available today for machine learning projects:


Labelbox is an end-to-end data labeling platform supporting text, image, video, and audio data. Key features include:

  • Multi-modal labeling workflows
  • Pre-labeling via AI to accelerate labeling
  • Advanced labeling interfaces e.g bounding boxes, polygons, segmentations
  • Support for content seasonality and duplicate detection
  • Real-time quality monitoring with automated checks
  • Secure data versioning and permissions
  • Integrations with data storage systems
  • Export formats for popular ML frameworks like TensorFlow and PyTorch

Labelbox aims to provide an enterprise-grade solution for large organizations with complex workflows and quality requirements.

Figure Eight

Figure Eight (acquired by Appen) is a long-standing pay-for-use data labeling platform with advanced crowdsourcing capabilities. Key features:

  • Managed crowdsourcing workforce from over 1 million contributors
  • Configurable quality assurance workflows with consensus evaluations
  • Real-time data analysis and metrics on labeling quality
  • Predictive modeling to optimize job timelines and costs
  • Taxonomy management and templating for labeling consistency
  • Integrations with common data storage and ML platforms

Figure Eight offers easy access to crowdsourced labeling at enterprise-scale.


Playment is an on-demand data labeling platform focused on computer vision. Key features:

  • Image and video annotation for object detection, classification, segmentation
  • 2D and 3D bounding box, polygon, keypoint, and line labeling
  • Annotation quality analysis and feedback for labelers
  • Model training presets for popular ML frameworks
  • REST API and Python SDK for integration
  • Secure data versioning and access controls

Playment provides optimized workflows for computer vision data labeling and training.

Azure Machine Learning Data Labeling

Azure ML Data Labeling is a data labeling service tightly integrated with Azure ML‘s end-to-end platform. Key features:

  • Labeling for text, image, video, and speech data
  • Managed crowdsourcing integrated into workflows
  • Real-time dashboards to track labeling project progress
  • Automated labeling with Azure Cognitive Services
  • Tightly coupled with Azure ML model building and deployment

Azure Data Labeling offers easy labeling workflows for the Azure ML ecosystem.

AWS SageMaker Ground Truth

Part of Amazon‘s SageMaker ML platform, SageMaker Ground Truth is a fully managed data labeling service. Key features:

  • APIs and interfaces for common labeling tasks
  • Built-in workflows for image, text, and video labeling
  • Managed access to labeling workforce
  • Real-time analytics on costs, progress, and accuracy
  • Tight integration with other SageMaker ML workflows

SageMaker Ground Truth simplifies large-scale data labeling on AWS.


Prodigy is an open source data labeling tool designed for active learning-based workflows. Key features:

  • Streamlined interfaces for image, text, and audio labeling
  • Built-in support for active learning annotations
  • Real-time model integration to suggest labels
  • Annotation quality monitoring
  • REST API for programmatic control

Prodigy provides an efficient open source option designed around active learning.


Doccano is an open source text and image annotation tool. Key features:

  • Intuitive web-based labeling interfaces
  • Collaboration features for teams
  • Import/export data in common formats
  • Access control and user management
  • Hostable on-premises or in the cloud

Doccano is a lightweight, self-hosted data labeling application.

Key Data Labeling Best Practices

Follow these best practices when labeling data for machine learning:

  • Create clear, precise guidelines – Detailed labeling guides with examples improve consistency across annotators. Document complex cases.

  • Use the appropriate labeling interface – Pick interfaces that match the data type and allow efficient, accurate labeling.

  • Conduct trial labeling runs – Pilot the guidelines and tools with a sample of data first. Refine as needed.

  • Employ multiple annotators – Using 2+ annotators per example identifies inconsistencies and improves accuracy.

  • Perform ongoing quality checks – Continuously measure and improve labeling quality through audits, statistical samples, and expert reviews.

  • Leverage active learning – Use models to suggest high-value labeling candidates to reduce wasted effort.

  • Make labeling iterative – Expect to revisit and refine portions of the dataset as models and understanding evolve.

  • Secure and version data – Protect labeled data and retain prior versions to support auditing.

  • Pick the right tooling – Choose labeling platforms with the right mix of automation, interfaces, and team support.

Investing in solid data labeling processes pays off in more accurate models and lower costs.

Data Labeling Use Cases

Data labeling is a crucial step across many machine learning domains and data types:

  • Computer Vision – Labeling objects, scenes, actions, landmarks, emotions, textures, motions, relationships in images and video.

  • Natural Language Processing – Annotating parts of speech, named entities, sentiment, intent, topics, and relationships in text.

  • Speech Recognition – Transcribing and labeling words and sounds within audio streams.

  • Anomaly Detection – Flagging unusual, fraudulent, or erroneous examples in transactional data.

  • Predictive Maintenance – Identifying signs of failure or breakdown in sensor data from industrial equipment.

  • Autonomous Vehicles – Labeling obstacles, road features, objects, and driving conditions from LIDAR and sensor data.

  • Medical Imaging – Annotating anatomical structures, nodules, lesions, cell morphologies, and other clinical indicators.

  • Recommender Systems – Tagging products, media content, or articles with topics, emotions, and sentiment.

Any machine learning tasks that require categorization, prediction, or structured outputs will benefit from quality labeled training data specific to the problem domain.

When to Consider Outsourcing Data Labeling

For very large datasets or complex annotation tasks, outsourcing data labeling to an external provider can make sense. Reasons to consider outsourcing include:

  • Lack of internal labeling expertise – External providers have access to qualified annotators in specialized domains.

  • Need to scale labeling rapidly – Outsourced companies can parallelize labeling across large workforces.

  • Complex or unique labeling workflows – Providers have frameworks for handling special annotation needs.

  • Cost and time constraints – External teams can label faster and more cheaply than internal employees.

  • Limited internal labeling tooling – Providers bring tailored platforms designed for the job.

  • Lack of quality control capabilities – Vendors perform layers of quality checks difficult to replicate internally.

  • One-off labeling projects – For one-time labeling needs, outsourcing avoids hiring and training in-house.

For large companies with access to internal resources, outsourcing should be evaluated based on complexity, turnaround needs, and cost. But many organizations find that outsourcing provides quality labeling results more quickly and cheaply.

Key Factors When Choosing a Data Labeling Vendor

If outsourcing data annotation, vet potential providers carefully:

  • Domain expertise – Do they have experience with data similar to yours?

  • Tooling and workflows – Can their platform and processes handle your use case efficiently?

  • Monitoring and quality control – What QC checks do they have during vs after labeling?

  • Security – How is data handled securely throughout the process?

  • Communication – Is feedback provided throughout the project?

  • Scalability – Can they handle your initial workload and future growth?

  • Cost structure – Are the costs reasonable and tied to value delivered?

  • Delivery timelines – How quickly can they deliver on your schedule?

  • Data and model integrations – Can they integrate with your downstream ML systems?

Thoroughly evaluating vendors on these factors helps identify the right partner for your project.

The Future of Data Labeling

Data labeling will only grow in importance as adoption of machine learning expands across industries. Here are some key developments to expect:

  • Specialization – More niche labeling vendors focused on specific domains, data types, and use cases.

  • Automation expansion – AI-assisted labeling and workflows will steadily grow and improve.

  • Active learning adoption – AL techniques will be integrated into more labeling pipelines.

  • Crowd integration – Seamless combination of crowdsourced and expert annotators.

  • On-demand delivery – Reduced timelines through managed vendors and cloud services.

  • Enhanced tooling – Platforms purpose-built for specialized labeling tasks.

  • Tighter ML integration – Seamless connectivity between labeling and downstream model building.

  • Process maturity – Data labeling will become an established phase recognized for its importance.

Data labeling is on track to become a sophisticated, highly-efficient service fueling the next generation of machine learning.

Key Takeaways

  • Data labeling is the process of assigning labels and annotations that enable supervised machine learning algorithms to learn from examples.

  • High-quality labeled data leads to more accurate models, while low quality labeling introduces noise and errors.

  • Manual, automated, crowdsourced, and active learning approaches each provide tradeoffs between efficiency and accuracy.

  • A wide range of data labeling platforms exist, from self-hosted open source tools to fully managed cloud services.

  • Following best practices – clear guidelines, multiple annotators, effective interfaces, quality control, etc. – improves labeling results.

  • Data labeling is a mandatory step across domains like computer vision, NLP, speech recognition, and more.

  • For large datasets, outsourcing labeling to specialized vendors can accelerate projects and improve quality.

Data labeling sits squarely on the critical path of nearly all applied machine learning. Investing in it pays dividends across model accuracy, performance, fairness, and sustainability.


Written by Alexis Kestler

A female web designer and programmer - Now is a 36-year IT professional with over 15 years of experience living in NorCal. I enjoy keeping my feet wet in the world of technology through reading, working, and researching topics that pique my interest.