Data Onboarding

Five Steps to effective A/B Testing

May 21, 2019  |   LiveRamp

A solid A/B testing program can help you to calculate true ROI and drive significant business impact. But, are you doing it right?

A/B testing is a marketing experiment that involves splitting your audience to test variations of your campaign to determine which variation drives better results. Essentially, you target half of your audience with marketing content A and the other half with marketing content B. You can then use the learnings from this experiment to inform your future marketing efforts, drive more meaningful ROI and help you effectively allocate your budgets to drive better business results.

Below are five practical steps to help you develop an effective and successful A/B testing program:

1.Simplicity is key

In the beginning, don’t overcomplicate things. Ensure your team understands the fundamentals of A/B testing so you and your team are starting off with a strong foundation of concrete knowledge. By doing so, you’ll eliminate the risk of unnecessary mistakes in the end-to-end testing process.

Follow these steps to set up a single-channel segment, segment-agnostic test:

  • Generate a simple, revenue-based hypothesis you’d like to test.
  • Design your test plan—decide which audiences you’d like to receive media and determine the amount of exposure and revenue lift you’ll need to cleanly read your test.
  • Plan your media to adhere to your test requirements.
  • Create control and test splits for your audiences. Your test audience should be eligible to see media. Your control audience should not.
  • After your test has run, measure the lift in revenue between your control and test audiences.

Once you’ve mastered the basics, you can look at adding layers to your testing. For example, you can look at running simultaneous and cross-channel testing or look at splitting your audience into more granular test groups.

2. Set desired outcomes

To ensure you’re reaping the benefits of your testing, you should have an idea of the outcomes you want and what you’re testing for. This is important as tests don’t tell you the exact ROI of your marketing efforts. Rather, they give you a range of results depending on how long you run the test and how many consumers are included.

Therefore, the precision of your testing process and its results should align with the results you need to drive important business decisions. Projecting these outcomes can help inform the testing process and limit the risk of running tests that don’t yield business value.

3. Know your test subjects, before you test them

Onboarding your target audiences through an identity resolution platform before you commence your A/B testing program will allow you to gain deeper, people-based audience insights.

This will benefit your overall testing strategy as you’ll have the ability to only include relevant individuals and also to ascertain how your target audiences respond to your marketing efforts on different platforms.

For example, say Brand X decided to create test and control groups across different target audience segments. By onboarding their audience data through an identity resolution platform, they would be able to accurately measure the results of their A/B testing program and connect the participant consumers back to unique identities. This means they can then draw deeper insights from the testing process to implement into future campaigns.

4. Don’t forget about your customer-relationship management (CRM) data

Including CRM data in A/B testing enables a more robust measurement of performance between target audience segments as well as the overall business impact of your digital and marketing campaigns.

One way you can do this is by working closely with your CRM and analytics resources teams to understand what percentage of sales/conversions are tracked within your CRM. This will help you develop a stronger understanding of your audience and ultimately plot projected ROIs more effectively against new and returning customers.

This is especially relevant for retail, where point-of-sale (POS) systems don’t necessarily collect information to make a CRM connection during a conversion.

5. Accurately calculate ROI

A/B testing can be a game-changer in how organisations measure the effectiveness of their marketing spend. Consistent A/B testing enables the continuous refinement of customer insights to build stronger, more effective marketing campaigns. Its ability to provide a causal link between specific interactions and purchases makes it invaluable in the calculation of true ROI – what all businesses want at the end of the day. To learn more about the power of A/B testing, download LiveRamp and Ovative’s The Beginner’s Guide to A/B Testing and Incrementally