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Hi, welcome to my talk, 'How to A/B Test with Confidence'. In this session, we'll learn a lot about A/B tests, including what can go right and what can go wrong with them.
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My name is Frederick Cheung, and I am a long-time Rubyist. I started with Rails back in version 1.0, and I am currently the CTO at Recipe.
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At Recipe, we do a lot of things, mainly helping retailers personalize their content and make smarter data-driven decisions.
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As part of our work, we run numerous A/B tests to compare our personalization methods with others, exploring different types and algorithms for improvements.
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So, we run a lot of A/B tests. This is my assistant Luna, who is half pillow and half cat.
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Briefly, the plan for the next half hour is to explore how to conduct A/B tests effectively and how to avoid common pitfalls.
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We'll start with a brief recap of what A/B testing is and why we do it. Then, we'll discuss what can go wrong during setting up, running, and analyzing tests.
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To finish on a positive note, I will share best practices.
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So, starting with the basics, what is an A/B test? It begins when there’s a decision you'd like to make, guided by data.
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For example, you might have an e-commerce application and wonder whether a button should say 'Buy Now' or 'Order.' Both options seem plausible, but instead of relying on gut feeling, you want actual data.
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To test this, you would split your users randomly into two groups, with one seeing the 'Buy Now' button and the other seeing the 'Order' button.
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After running this for a few days, you would count how many orders occurred in each group, resulting in quantities like 49 orders versus 56 orders.
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The real question we need to answer is whether this difference is statistically significant—does changing the text genuinely improve our results, or was it just a fluke?
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Before diving into the statistical analysis, it’s important to note that A/B tests are not just limited to button text. They can encompass more complex changes in layouts, designs, or overall user flows.
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You can test how different buttons impact user actions; for instance, does one button lead to a quicker purchase process if it triggers an action on the page, while another button redirects to the checkout page? Additionally, you can explore variations in algorithms or recommendation engines whenever measurable differences exist.
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However, before going too deep, we need to cover some jargon that will help clarify our discussion: significance, test power, and sample size.
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Significance answers the key question: is the observed difference just a fluke? People often refer to p-values when discussing significance. A p-value of 0.05 indicates a 5% chance of a fluke.
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People might also present this as a confidence level of 95%. Although these numbers are viewed differently, they represent the same idea from opposing perspectives.
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When you run your test, collect data, and input it into the appropriate statistical test method, which may vary depending on the metric type. For example, you'll do a different analysis for retention rates than for signup conversions or average spend per customer.
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Significance testing tells you whether there's a genuine difference between the two groups—but it does not indicate how substantial that difference might be. If one group achieves a 10% conversion rate and another 6%, the presence of a statistically significant difference does not guarantee that the two rates result in a 4% difference.
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The counterpart to significance is test power, which focuses on the likelihood of missing an existing change instead of detecting a false positive. This concept relates to how small a change you want to be able to detect—intuitively, the smaller the change, the more data you'll need.
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It’s worth noting that test power also considers absolute rates, as opposed to just relative rates. For instance, moving from a 10% to a 20% conversion rate is easier to measure than from 0.1% to 0.2%, despite both cases indicating a doubling.
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If you’re measuring something with a current conversion rate of just 0.1%, achieving a statistically significant result will be quite challenging. Combining significance and test power leads us to the concept of sample size.
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Sample size indicates how many users you need to include in your A/B test process to detect a change of a specific magnitude at a designated significance level. Online calculators can help you determine this number.
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Once you have calculated your required sample size, ensure that a testing goal is feasible. If you need one million users but only have a thousand, it's back to the drawing board.
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When evaluating feasibility, consider cost implications as well. For instance, if you are testing a new homepage and gaining new visitors primarily through Google Ads, acquiring a significant number of users can be costly.
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Once you confirm feasibility, aim to run the test without tinkering with it during the process. Try not to monitor the results until you reach the required sample size.
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However, be cautious of conducting short experiments. For example, if your sample size calculation indicates you need 5,000 users and you have traffic of 5,000 users in a day, you become vulnerable to transient conditions.
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If the day you conduct your test coincides with a national holiday or school breaks, the user behavior may not represent typical usage, thus resulting in skewed data.
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Another approach to analyzing test outcomes is Bayesian A/B testing, which is a different statistical school of thought. While I can’t cover it in extensive detail, the main distinction lies in starting with a prior model of how you assume the world operates.
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Incorporating your existing understanding and uncertainty, you update this prior with data from your experiments. Instead of deriving a single number from testing, the output becomes a probability distribution.
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The output from a Bayesian A/B test typically features two curves representing the posterior probabilities for each variant. The intention is to analyze the entire range of potential outcomes and ascertain whether the green curve is likely better than the red one.
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Bayesian testing allows you to incorporate existing knowledge and uncertainties, departing from a zero-knowledge perspective. This can lead to improved outcomes, especially when working with low base rates, although the underlying math is slightly more complex.
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However, most of the discussion in this talk will apply equally to both classical and Bayesian A/B testing.
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We now have a good understanding of A/B testing basics and potential pitfalls. However, things can go wrong from the very beginning, particularly with group randomization. This is the foundational aspect of valid testing.
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If randomization is flawed, the validity of your test becomes compromised.
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About ten years ago, I wrote a few lines of code to randomly assign users to test groups based on whether their user ID was even or odd. It seemed reasonable, so if your ID modulo 2 was 0, you'd see the experiment; otherwise, you'd see the control.
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This solution might have sufficed for a single A/B test; however, we ran multiple tests, leading to an uneven spread of users. All users with even IDs received the experiment, which meant they would notice frequent changes.
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In the long term, we weren't merely testing isolated experiments but rather assessing how users reacted to constant changes.
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This raises an important point: constant changes can fatigue users. It’s crucial to maintain a stable testing environment.
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You can avoid such pitfalls by employing a library like 'Vanity,' which is a well-regarded tool in Rails for conducting A/B tests.
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In this library, instead of merely relying on user IDs, you can combine the user ID with a unique experiment identifier, generating a hash to arbitrate group assignment. However, ensure that hashing maintains the necessary statistical properties.
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As a general rule, avoid creating your own custom randomization if possible; it can lead to unexpected flaws in your setup.
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Moreover, even a single instance of non-random sampling can lead to significant issues. For example, we once participated in an A/B test run by a retailer where users were not assigned randomly.
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Instead, newer users were placed in one group while older users were placed in another. This resulted in skewed outcomes since newer users typically displayed less loyalty.
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Consequently, the updated test produced astonishing results; however, previous data showed that the two groups had inherently different outcomes before the test.
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This situation complicates result extraction, making it difficult to trust the test. For instance, if there was a 5% difference before the test and a 6% difference afterward, simply subtracting the values does not yield a reliable conclusion.
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Another potential mistake is commencing your test prematurely. To illustrate, suppose you want to test a change on your checkout page with 100,000 users visiting your site in one month.
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You would split your users into two groups of 50,000, each experiencing the same homepage. Some users would proceed to the next site page as expected and see the same products.
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As a result, even fewer users would reach the checkout process, leading to a smaller sample size for impactful conclusions.
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Let’s say out of 5,000 total users, the conversion statistics yield results of 2,600 for group A compared to 2,500 for group B, resulting in a meager 5% to 5.2% conversion.
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If we remember the earlier discussion about test power, that small change isn’t statistically significant due to the large number of users who experienced no change.
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Here’s what to do differently: enable 100,000 users to access your site without splitting them yet.
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Allow them to view products and only allocate user groups once they proceed to add items to their cart and visit the checkout page. This way, the split occurs just when users experience differing content.
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This allows for measuring differences on a more effective basis. Imagine if this second group maximizes their conversions to 50% compared to 52.7% in group A, leading to a statistically significant difference.
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In summary, it’s advisable to allocate users to groups as late as possible to maximize the efficacy of the measured change.
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The last category of error I want to address involves agreeing on your test setup beforehand.
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Be sure to reach consensus on various aspects like the scope of the test, deciding which pages will be included, and whether to test all users or only logged-in users.
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If your website operates differently in various regions, discuss whether to test specific locales or encompass all users.
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Additionally, clarify the goal of the A/B test and how to best quantify success. For instance, when testing content sites, determining the right engagement metric is essential.
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You may choose between page views or average session time, each measuring engagement in different ways, further emphasizing the importance of reaching a consensus beforehand.
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Engaging in these discussions at the outset is critical; if not, you could find yourself determining which results to favor instead of relying solely on data.
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I advise establishing one primary metric over which all parties agree before starting the A/B test, avoiding the scenario where results are cherry-picked based on preference or bias.
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Once you establish your A/B test setup, it's essential to execute it with diligence and patience, as A/B tests measure the impact of the differences between the two variants.
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As individuals, we often focus on the intentional differences, but other unintentional changes can skew results. For example, an A/B test we conducted on a mobile commerce app intended to personalize product displays.
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However, an implementation bug resulted in the variant with personalized recommendations crashing ten times more often than the control version.
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When analyzing test data at the end, we found that the original app had performed better—but we still didn't know if the recommendations were sound or if it was merely result skewed by the bugs.
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This case serves as an extreme example; however, you should remain cautious about unexpected differences in your test variants. Commonly, performance differences can create issues if one variant takes longer to load.
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Be careful with significance testing, as conducting frequent analyses is an anti-pattern. It’s tempting to evaluate results daily, only stopping the test if the results appear significant.
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This practice invalidates your significance testing because you are constantly 're-rolling the dice'. When you initially set a 5% threshold for significance, this can quickly elevate to a much higher chance of error.
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Thus, to maintain integrity, you should avoid the temptation to peek into your test results before you reach your sample size limit. Notably, Bayesian A/B testing approaches permit this, as it deals with distributions rather than fixed thresholds.
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Lastly, once the test concludes, you must conduct thorough analysis. Use the proper statistical tests based on your defined variables; not all statistical tests are interchangeable based on the metric type.
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Just because one metric yields a significant difference does not mean that others will follow suit. It is crucial to evaluate metrics independently.
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These evaluations can often unveil outliers. For example, in an attempt to improve donation sizes for a charity, a significant outlier like a $1 million donation can heavily skew average values.
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When you observe such outliers, consider whether they merit removal or if you should use alternative metrics that minimize their impact.
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It's important to understand your domain at a fundamental level, as speed bumps can emerge due to behaviors unique to your user base. For instance, return rates in e-commerce depend on timing.
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If your A/B test runs and yields strange results, you might be dissatisfied. Noticing fluctuations in return rates reflects users having preferences that can vary significantly.
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Finally, ensure there’s ample time allocated to adapt to changes. Users may take time before genuinely embracing new features; adoption can lag behind improvement.
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Just as you should avoid abrupt shifts in interfaces, resist the temptation to overly dissect test results after they have concluded. Screens with poor performance may not benefit just by examining splits post-facto.
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Remember that even if you focus on just mobile users and demonstrate a positive result, you may not have isolated the true factors that influenced the change.
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You must also note the temptation to split results if the initial outcomes aren't promising. Think critically about who your users are and to what extent their behavior diverges.
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While assessing splits within metrics can yield insights, doing so without prior definition can lead to a compromised foundation.
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Lastly, ensure you maintain neutrality in evaluating results to avoid the natural emotional bias towards invested choices.
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Once you document your A/B tests, simplify documentation to ensure that everyone involved knows the plan and can follow through.
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Keep your plans documented: metrics of success, success criteria variations, and sample size calculations to establish clarity among all participants.
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Moreover, it’s important to choose clear names for your test variants to prevent confusion in discussions.
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Thank you for listening. If you want to explore further readings on A/B testing, especially Bayesian testing, I have some recommendations for you.
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Thank you very much for your time!
