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ABTesting

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A/B Testing

Agenda

• Causation
• Modeling vs Experimentation
• Examples
• A/B Test
• Testing Process
• Summary
Road not
taken?
Have you ever wondered where you might
be today had you done something
differently in the past?
Causation
Did social media marketing make revenue
grow?
Modeling vs
Experimentation
Modeling

Advantages
• Easy & cheap
Disadvantages
• Needs a lot of data
• Uncertainty due to omitted variable
bias
Experimentation

Advantages
• Accurate
Disadvantages
• Comparatively expensive

Media vs No Media
How do we know if
the new medicine Test
works?

EffectivenessDrug
Control

EffectivenessPlacebo

Placebo Effect
Experimentation
Generic

Personalized

Experimentation
Generic

Personalized

A/B Test
40%

90%
Generic

Personalized

A/B Test
Read Rate

90%

40%

Generic Personalized

Testing Process
Test the effect of marketing email subject on read rate

Hypothesis Establish Sample Size Randomize treatment


Read rate with personalized and control
subject = Read rate with Baseline, detectable effect, Customers
generic subject power, significance level
Read Rate

90%

40% Gather Data Track KPI


Results Customer data, Subject , and Primary: Read rate
Email response data Secondary: CTR, Revenue
Generic Personalized

This initial test will gauge the potential. If results are promising, multivariate tests can further estimate
impact of subject variations. Once rich data is gathered in the future, predictive models can optimize
email subjects.

Testing Process
Read Rate Results

90%

40%

Generic Personalized

This initial test will gauge the potential. If results are promising, multivariate tests can further estimate
impact of subject variations. Once rich data is gathered in the future, predictive models can optimize
email subjects.

Testing Process
Multivariate Testing
Multivariate Testing
Multivariate Testing
Multivariate Testing
Multivariate Testing

https://vwo.com/blog/multivariate-testing/
Takeaway
• Causal Modeling
• Experimentation
• A/B Testing Process

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