mathematics

Multivariate testing in marketing

Multivariate testing in marketing is a mathematics topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Multivariate testing in marketing rather than just read about it. In short: In marketing, multivariate testing or multi-variable testing techniques apply statistical hypothesis testing on multi-variable systems, typically consumers on websites. Techniques of multivariate statistics are used.

Key takeaways

Multivariate testing in marketing belongs to mathematics; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Multivariate testing in marketing to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Multivariate testing in marketing from memory before moving on to harder problems.

Reference excerpt

In marketing, multivariate testing or multi-variable testing techniques apply statistical hypothesis testing on multi-variable systems, typically consumers on websites. Techniques of multivariate statistics are used.

In internet marketing

In internet marketing, multivariate testing is a process by which more than one component of a website may be tested in a live environment. It can be thought of in simple terms as numerous A/B tests performed on one page at the same time. A/B tests are usually performed to determine the better of two content variations; multivariate testing uses multiple variables to find the ideal combination. The only limits on the number of combinations and the number of variables in a multivariate test are the amount of time it will take to get a statistically valid sample of visitors and computational power. Multivariate testing is usually employed in order to ascertain which content or creative variation produces the best improvement in the defined goals of a website, whether that be user registrations or successful completion of a checkout process (that is, conversion rate). Dramatic increases can be seen through testing different copy text, form layouts, and even landing page images and background colours. However, not all elements produce the same increase in conversions, and by looking at the results from different tests, it is possible to identify those elements that consistently tend to produce the greatest increase in conversions. By setting up the server to display the different variations of content in equal proportions to incoming visitors, one can carry out testing on a dynamically generated website. Statistics on how each visitor went on to behave after seeing the content under test must then be gathered and presented. Websites with minor page coding changes can also utilize outsourced services for multivariate testing. These services insert their content into predefined areas of a site and monitor user behavior. Multivariate testing essentially enables website visitors to express their preferences and determine which content is most likely to lead them towards a specific goal through their clicks. The testing is transparent to the visitor, with all commercial solutions capable of ensuring that each visitor is shown the same content on every visit. Some websites benefit from constant, 24/7, continuous optimization as visitor response to creatives and layouts differs by time of day/week or even season. Multivariate testing is currently an area of high growth in internet marketing as it helps website owners to ensure that they are getting the most from the visitors arriving at their site. Areas such as search engine optimization and pay per click advertising bring visitors to a site and have been extensively used by many organisations but multivariate testing allows internet marketeers to ensure that visitors are being shown the right offers, content and layout to convert them to sale, registration or the desired action once they arrive at the website. There are two principal approaches used to achieve multivariate testing on websites. One being Page Tagging; a process where the website creator inserts JavaScript into the site to inject content variants and monitor visitor response. Page tagging typically tracks what a visitor viewed on the website and for how long that visitor remained on the site together with any click or conversion related actions performed. Page tagging is often done by a technical team rather than the online marketer who designs the test and interprets the results in the light of usability analysis. Later refinements on this method allow for a single common tag to be deployed across all pages, reducing deployment time and removing the need for re-deployment between tests. The second principal approach used does not require page tagging. By establishing a DNS-proxy or hosting within a website's own datacenter, it is possible to intercept and process all web traffic to and from the site undergoing testing, insert variants and monitor visitor response. In this case, all logic sits on the server rather than browser-side, and after initial DNS changes are made, no further technical involvement is required from the website point of view. SiteSpect is known to employ this method of implementation. Multivariate testing can also be applied to email body content and mobile web pages. In addition to testing the efficacy of various creative/content executions on a website, the principles of multivariate testing can and often are used to test various offer combinations. Examples of this are testing various price points, purchase incentives, premiums, trial periods or other similar purchase incentives both individually and in combination with each other. The value of this is that marketers (both traditional and online) can use multivariate testing principles online to quickly ascertain and predict the effectiveness of offers without going through the more traditional multivariate testing methods which take significantly more time and money (focus groups, telephone surveys, etc.).

Design of experiments

Statistical testing relies on design of experiments. Several methods in use for multivariate testing include:

… excerpt ends here. Continue reading the full article.

Worked examples

Example 1 — a first encounter with Multivariate testing in marketing

Start with the simplest possible case. Write down what Multivariate testing in marketing claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In mathematics, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Multivariate testing in marketing before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Multivariate testing in marketing ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Multivariate testing in marketing

In research: Multivariate testing in marketing appears in mathematics research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Multivariate testing in marketing in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Multivariate testing in marketing is common in secondary-school and first-year university syllabi. It links to neighbouring topics Multivariate statistics, Online advertising, Quantitative marketing research, so understanding it makes those chapters shorter.
In everyday life: Look for Multivariate testing in marketing outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Multivariate testing in marketing in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Multivariate testing in marketing means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Multivariate testing in marketing out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Multivariate testing in marketing in simple terms?

Why does Multivariate testing in marketing matter?

Because it connects several mathematics ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Multivariate testing in marketing?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Multivariate testing in marketing.