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WEB ANALYTICS
WEDNESDAYS SINGAPORE
JANUARY 2015
A/B TESTING AND THE MOST COMMON
PROBLEMS, A LOOK AT STATISTICS AND
THE WAYS TO GET IT WRONG
Nikolay Novozhilov - Product director of data
platforms @ Wego.com.
Nikolay is building big data capabilities at Wego.com,
the Asia Pacific and the Middle East's leading travel
metasearch engine. He has 7+ years of experience in
data analytics working for IT startups and previously
for consulting. Nikolay received an MBA from INSEAD
in Singapore and before that lived and worked in
Moscow.
A/B testing and problems with statistics
Web Analytics Wednesday, Singapore
Nikolay Novozhilov, Wego.com
www.novozhilov.co
Is there a problem with A/B testing?
Imaginary uplifts
100 tests done, 10 successful, 10% uplift each…
…expect 159% growth!
Expectation Reality
Why?
… and what to do about it
Lies, damned lies, and statistics
All different! All based on assumptions!!!
Tool Test used
Optimizely Two-tailed sequential likelihood ratio test
with false discovery rate controls
Google Analytics Bayes estimate with uniform beta prior
VWO Intersection of confidence intervals for
binominal distribution
Leanplum Confidence intervals at p=5%, unknown
statistic
Usereffect Chi-square statistics
Commerce Sciences Welch's t-test
What is p-value and why it is 5%?
All tests are
based on
assumptions!
Assumption #1:
You don’t look at
the data upfront
What happens if you look?
I played Monte Carlo in
Excel
And here is the result:
• 5% p-value
• 1000 “users” in each
sample
• CR of 2%
• A wins over A 29% of
the times!
What do you do about it?
Don’t look! (just kidding)
Google “O'Brien & Fleming interim
analysis” (no, still kidding )
Keep calm, more stuff coming!
“My test on Buy button showed interesting
results…”
Buy Now! Buy Now! Buy Now! Buy Now!
Buy Now! Buy Now! Buy Now! Buy Now!
Buy Now! Buy Now! Buy Now! Buy Now!
-3% -23% +6% -9%
-2% +22% -11% -14%
-1% +9% -12% -1%
10000 users in each variant, base CR=1%
But in reality all colors were the same…
Buy Now! Buy Now! Buy Now! Buy Now!
Buy Now! Buy Now! Buy Now! Buy Now!
Buy Now! Buy Now! Buy Now! Buy Now!
-3% -23% +6% -9%
-2% +22% -11% -14%
-1% +9% -12% -1%
1000 users in each variant, base CR=1%
The real problem!
Multivariate testing
Multiple comparisons
Be smart or be Google
Sample
size
Significa
nce
Effect
size
Power
Start with a good hypothesis!
But people are good in finding plausible
explanations for data!
Replication
Do your dirty
business
Register Replicate
This might work!
Stop math, I’m a web designer!
Visual way of doing it
Has some stat meaning!
ReplicationsVariance observation

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Waws january 2015-nikolay-novozhilov

  • 2. A/B TESTING AND THE MOST COMMON PROBLEMS, A LOOK AT STATISTICS AND THE WAYS TO GET IT WRONG Nikolay Novozhilov - Product director of data platforms @ Wego.com. Nikolay is building big data capabilities at Wego.com, the Asia Pacific and the Middle East's leading travel metasearch engine. He has 7+ years of experience in data analytics working for IT startups and previously for consulting. Nikolay received an MBA from INSEAD in Singapore and before that lived and worked in Moscow.
  • 3. A/B testing and problems with statistics Web Analytics Wednesday, Singapore Nikolay Novozhilov, Wego.com www.novozhilov.co
  • 4. Is there a problem with A/B testing?
  • 5. Imaginary uplifts 100 tests done, 10 successful, 10% uplift each… …expect 159% growth! Expectation Reality
  • 6. Why? … and what to do about it
  • 7. Lies, damned lies, and statistics All different! All based on assumptions!!! Tool Test used Optimizely Two-tailed sequential likelihood ratio test with false discovery rate controls Google Analytics Bayes estimate with uniform beta prior VWO Intersection of confidence intervals for binominal distribution Leanplum Confidence intervals at p=5%, unknown statistic Usereffect Chi-square statistics Commerce Sciences Welch's t-test
  • 8. What is p-value and why it is 5%? All tests are based on assumptions! Assumption #1: You don’t look at the data upfront
  • 9. What happens if you look? I played Monte Carlo in Excel And here is the result: • 5% p-value • 1000 “users” in each sample • CR of 2% • A wins over A 29% of the times!
  • 10. What do you do about it? Don’t look! (just kidding) Google “O'Brien & Fleming interim analysis” (no, still kidding ) Keep calm, more stuff coming!
  • 11. “My test on Buy button showed interesting results…” Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! -3% -23% +6% -9% -2% +22% -11% -14% -1% +9% -12% -1% 10000 users in each variant, base CR=1%
  • 12. But in reality all colors were the same… Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! Buy Now! -3% -23% +6% -9% -2% +22% -11% -14% -1% +9% -12% -1% 1000 users in each variant, base CR=1%
  • 13. The real problem! Multivariate testing Multiple comparisons
  • 14. Be smart or be Google Sample size Significa nce Effect size Power
  • 15. Start with a good hypothesis! But people are good in finding plausible explanations for data!
  • 16. Replication Do your dirty business Register Replicate This might work!
  • 17. Stop math, I’m a web designer!
  • 18. Visual way of doing it
  • 19. Has some stat meaning! ReplicationsVariance observation

Editor's Notes

  1. Ask audience: Do you do A/B testing? What you think is a problem?