Multivariate Testing: Can you radically improve marketing ROI by increasing variables you test?

In response, one emerging MVT service model offers getting to a “lift” faster by using adaptive elimination of likely underperformers, in exchange for the test results providing limited information beyond identifying the winner. Such test results are not as useful as their full-factorial brethren for designing subsequent tests because adaptive elimination of treatments makes it difficult to extrapolate the psychological factors and consumer preferences responsible for the test outcome. The immediate business benefits, however, are more immediate.

As I was reading a few LinkedIn discussions about multivariate testing (MVT), I began to wonder if 2010 was going to be the year of multivariate.

1,000,000 monkeys can’t be wrong

Multivariate Testing (MVT) is starting to earn a place in the pantheon of buzzwords like cloud computing, service-oriented architecture, and synergy. But is a test the same thing as an experiment? While I am not a statistician (nor did I stay at the Holiday Inn last night), working at MarketingExperiments with the analytical likes of Bob Kemper (MBA) and Arturo Silva Nava (MBA) has helped me understand the value of a disciplined approach to experimental design.

MonkeyWhat I see out there is that a little knowledge is indeed a dangerous thing. Good intentions behind powerful and relatively easy-to-use platforms like Omniture® Test&Target™ and Google® Website Optimizer™ have generated a misleading sense that as long as a multivariate test is large enough (several hundred or more combinations being tested), at least one of the combinations will outperform the control.

This notion has become the value proposition of a growing number of companies offering services around either the big-name or their own (simpler, and often therefore easier to set up) MVT tools. They are ostensibly betting on the technology, and not on a systematic approach to experimental design or any particular UI/UX (user interface/user experience) optimization theory.

Even though, as Bob has pointed out to me, it is reasonable that an MVT setup with a billion combinations may not yield a lift over the control, my contention is that the risk-weighted business cost of a dissatisfied customer is low. Therefore, little stops the burgeoning MVT shops from safely offering a “100% lift guarantee.” Just like the proverbial million monkeys with typewriters, somewhere among thousands of spray-and-pray treatments their MVT tests are expected to produce one that’s better than the rest.

1 monkey with a stick Leer más “Multivariate Testing: Can you radically improve marketing ROI by increasing variables you test?”