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# PyData London 2014 Martin Goodson- Most A/B Testing Results are Illusory

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PyData London 2014 Martin Goodson - Most A/B Testing Results are Illusory

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### PyData London 2014 Martin Goodson- Most A/B Testing Results are Illusory

1. 1. Most A/B testing results are Illusory Martin Goodson, Skimlinks
2. 2. These are my opinions not those of my employer!
3. 3. What’s an A/B test? Example: Free delivery A: Control B: Variant
4. 4. ‘How can you talk for 40 minutes about A/B testing?’
5. 5. A/B tests are very easy to get wrong
6. 6. What my experience is based on
7. 7. What this talk is about 3 Statistical concepts Errors and consequences These errors are exactly how A/B testing software works
8. 8. What this talk is about Statistical Power Multiple Testing Regression to the Mean
9. 9. What is Statistical Power? The probability that you will detect a true difference between two samples
10. 10. What is Statistical Power? Example: are men taller than women, on average?
11. 11. What is Statistical Power? Example: free delivery on a website
12. 12. Why is Statistical Power important? 1. False negatives 2. False positives
13. 13. Precision Proportion of true positives in the positive results Its a function of power, significance level and prevalence.
14. 14. If you have good power? Out of 100 tests 10 really drive uplift You detect 8 5 false positives 8/13 of positive tests are real
15. 15. If you have bad power? Out of 100 tests 10 really drive uplift You detect 3 5 false positives 3/8 of winning tests are real!
16. 16. Marketer: ‘We need results in 2 weeks time’ Me: ‘We can’t run this test for only two weeks we won’t get robust results’
17. 17. Marketer: ‘We need results in 2 weeks time’ Me: ‘We can’t run this test for only two weeks we won’t get robust results’ Marketer: ‘Why are you being so negative?’
18. 18. Calculating Power Alpha: probability of a positive result when the null hypothesis is true (5%) Beta: probability of not seeing a positive result when the null hypothesis is true Power = 1- Beta (80-90%)
19. 19. Calculating Power Use a power calculator: Online R (power.prop.test) python (statsmodels.stats.power)
20. 20. Approximate sample sizes Using a power calculator and asking for 80% power and significance level of 5%: 6000 conversions to detect 5% uplift 1600 conversions to detect 10% uplift
21. 21. Multiple testing
22. 22. Effect of multiple testing if you run 20 tests at a significance level of 5% you will obtain 1 win, just by chance.
23. 23. Giving targets for successful tests.
24. 24. Stopping tests early
25. 25. Stopping tests early Simulations show that stopping an A/A test when you see a positive results will result in successful test 41% of the time.
26. 26. Stopping tests early That works out to a precision of 20%
27. 27. Negative uplift. Stopping an A/B test with negative effect results in a win 9% of the time!
28. 28. A True Story
29. 29. Regression to the mean Give 100 students a true/false test They all answer randomly Take only the top scoring 10% of the class Test them again What will the results be?
30. 30. Estimates of uplift are generally wrong.
31. 31. What you need to do to get it right ● Do a power calculation first to estimate sample size ● Use a valid hypothesis - don’t use a scattergun approach ● Do not stop the test early ● Perform a second ‘validation’ test
32. 32. My details martingoodson@gmail.com @martingoodson http://goo.gl/jvhwmB Download my whitepaper on A/B testing here
33. 33. Skimlinks After Party! Levante Bar 5 minutes away Come hungry! Invites + Map at the booth http://skimlinks.com/jobs