If you would have to choose one must-have characteristic in a Digital Media app**, which one would you choose? After a chat over beer with friends about it, I chose A/B Testing.
First what’s A/B testing (if you don’t know), second why.
A/B Testing
Also called split testing, A/B testing is a method that allow testing of hypothesis in different means, with the aim of improving it efficiency. For instance it can be used to test efficiency of different banner ads to check which ones deliver more clicks, to run parallel promotions to check which ones give better ROI, to compare different copy text to see which converts better, etc… It is also applied in the offline world.
The good thing with A/B testing in Digital Media is that it can be run in live environments therefore making it results more viable, immediate and easily tested.
Multi-variate testing is a variation of it where several variables are measured at once, this one requiring some deeper statistical modeling.
Why A/B Testing?
A/B Testing is reasoning and asking why
If you do A/B testing, you do it based on lots of thinking about different aspect of your website for instance. This thinking is crucial to create hypothesis about your tool, which will later be tested. Constantly testing generates results that will can give you tips that collectivelly defines the dynamics of the interaction between user and your website
A/B Testing means Measurability
To be ready for A/B Testing you’ll have to be able to collect data and measure it efficiently. A/B Testing is all about data and the power that it reveals. Variables under testing should comply to some principles that will make sure their characteristics are optimized for the test under consideration (ie, you dont want to measure apples agains oranges)
A/B Testing is directly linked to revenue
By doing A/B testing you are trying to improve mostly one KPI: revenue. No much tactics can influence directly the bottom like like A/B testing does.
A/B Testing improves ROI on existing customers
Acquiring a new customer and generating revenue from him is more costly than generating revenue from an existing one: A basic rule of Business.
A/B Testing allows improvements throughout the Conversion Funnel
It is good to understand the importance of conversion funnels[1] and the importance of optimizing different steps of it. As a rule, the later steps should be better optimized since they will provide easier wins at a point where a conversion (like a purchase for instance) is more prone to happen. Optimizing the first steps of the funnel without having the later ones optimized means wasting money since you’ll only make money in the end of the funnel.
A/B Testing optimizes and therefore facilitates scalability
One of the most basic rules of Engineering: If you have one process that needs to be scaled, optimize it first by making it simpler, shorter, less prone to errors. Only then scale it up since scaling inefficient processes will scale it inefficiencies as well. A/B Testing can improve optimization.
A/B Testing improves “Hidden Innovation”
By optimizing different aspects that competitors normally don’t look at, A/B Testing can provide increments of productivity in tools that along time can make a big difference. Several companies are known to produce better results with less funding. A/B Testing can be done cheaply and can provide small teams the ability to gain competitive advantages over big/fat organizations that sometimes miss the opportunity to look at the detail.
Do you need testing?
So, next time you think about starting your online project, think how can A/B testing help you and how soon can you start implementing it. Let me know if you need some help (anibal.damiao@adtomic.dk), I would love to hear about your project and maybe help you somehow.
** I used the term Digital Media app to define any application that runs on the Internet, Mobile, and other Digital Mediums. Diferent apps can take use of it like websites, e-commerce, CMS solutions, Search Engines, Online Games, etc… The Internet is probably the one where A/B testing is more used due to it dynamism and consequent easiness of use for this purpose.
