What is Split Testing in Marketing?
The world of advertising is one of continuous change, with evolving audience preferences, market trends, and advertising techniques. In this dynamic environment, split testing is not just a one-off task, but an ongoing process necessary for the effective optimization of your advertising campaigns.
Split testing, also known as A/B testing, should be a constant part of your advertising strategy for several reasons.
- Discovering New Opportunities: As audience behaviors and preferences evolve, so should your advertising strategy. By continuously testing new ad variants, you can uncover fresh insights, discover new opportunities, and stay ahead of the competition.
- Optimizing Ad Performance: Even a small change can significantly impact your ad’s performance. By continuously testing different elements of your ads, such as headlines, copy, images, or CTAs, you can find the most effective combination and enhance your ad’s performance.
- Improving Return on Investment (ROI): Advertising can be expensive. By continuously testing and optimizing your ads, you can ensure that your ad spend is delivering the best possible return.
- Mitigating Risks: Markets and audiences are unpredictable. What works today might not work tomorrow. Continuous A/B testing allows you to catch changes in performance and adjust your strategy accordingly, minimizing potential risks.
The Never-Ending Process of Split Testing
While it’s clear why you should always run split tests, it’s essential to understand that split testing is a never-ending process. Here’s how and why the cycle of split testing continues indefinitely.
Step 1: Identify and Hypothesize: Start by identifying an element of your ad that you believe could impact its performance. Then, create a hypothesis about how changing this element might affect the outcome.
Step 2: Test: Create two variants of the ad, one with the original element (A) and one with the changed element (B). Run these ads simultaneously, distributing them randomly among your audience.
Step 3: Analyze: After you’ve gathered sufficient data, analyze the results. If there’s a significant difference in performance, you’ve found a winning variant. If not, your hypothesis was incorrect.
Step 4: Implement and Iterate: Implement the winning variant and start the process again, this time testing a different element.
The cycle continues, each iteration offering an opportunity to learn something new about your audience or market, improve your ad performance, and increase your ROI. It’s essential to keep in mind that even when you find a winning variant, you shouldn’t stop testing. Market trends, audience preferences, and competitive landscape can change rapidly, and continuous A/B testing ensures you stay ahead of the curve.
In conclusion, split testing should be an ongoing part of your advertising strategy. It’s a tool for continuous learning, optimization, and risk mitigation, helping ensure your ads remain effective and deliver the best possible ROI.
How Can an Agency Support A/B Testing?
Digital marketing agencies can play a pivotal role in supporting A/B testing efforts. They can provide the expertise and resources required to design, implement, monitor, and analyse the results of the test.
From the design perspective, they can help create different versions of the marketing element keeping user behaviour and preferences in mind. They may use heatmaps, user recordings, and customer feedback to understand where improvements can be made and then incorporate these insights into the design of the variants.
Implementation of the test involves setting up the technical infrastructure needed to serve different variants to different users and track the desired metrics. Agencies can set this up using various tools and technologies that specialize in A/B testing.
Monitoring and analysing the test results is another crucial role that agencies can play. They can help interpret the data and provide actionable insights. With their expertise, they can differentiate between statistically significant results and random variations, allowing you to make confident decisions about your marketing strategy.
A/B Testing on Different Marketing Platforms
Website – Testing Call to Actions on a Website
Websites are perhaps the most common platform where A/B testing is used. You can test almost any element on your website like headlines, images, buttons, page layouts, content length, and more. A common application is to A/B test landing pages, with the goal often being to increase conversions.
A call-to-action (CTA) is a key element on your website that encourages your visitors to take some specific action. This could range from signing up for a newsletter, downloading a free eBook, scheduling a demo, making a purchase, or any other action you want them to take.
When planning to A/B test CTAs on your website, you should start by identifying the objective. The most common objective is to increase the conversion rate, which is the percentage of visitors who take the desired action.
Once you’ve defined your objective, you need to create two variants of your CTA. You could change the text, color, font, size, placement, or any other aspect that you believe might affect the conversion rate. For example, you might create a version A with the CTA text “Download Now” and version B with the text “Get Your Free eBook”.
Next, you implement these two variants on your website, ensuring that a random half of your visitors see version A and the other half see version B. It’s important that the distribution is random to eliminate any potential bias.
Finally, you monitor the conversion rates of both variants over a specific period. You need a sufficient sample size to ensure that your results are statistically significant. After you’ve collected enough data, you compare the conversion rates to determine which variant is more effective.
The Impact of a 2% Increase
Assuming that you’ve run your A/B test and found that version B, with the CTA text “Get Your Free eBook”, led to a 2% increase in conversion rate. How does this translate into higher revenue?
Let’s consider an example. Suppose you have an average of 1,000 visitors per day on your website. With the original CTA (version A), let’s say the conversion rate was 5%. This means that each day, 50 visitors took the desired action.
With version B of the CTA, the conversion rate increased to 7%. This means that now, 70 visitors are taking the desired action each day. That’s an increase of 20 conversions per day.
Now, if the desired action was making a purchase, and the average value of each purchase is £50, this 2% increase in conversion rate leads to an additional £1,000 in revenue per day (£50 x 20), or £365,000 over a year.
This example illustrates the power of A/B testing and how small changes can lead to significant increases in revenue. The key is to constantly test, learn, and optimize based on data. This way, you can maximize the effectiveness of your CTAs and, in turn, your overall marketing strategy.
Advertisements, especially digital ones, lend themselves perfectly to A/B testing. With digital ads, you can test various elements like headlines, body text, images, calls to action, and even the colour scheme. Ad platforms like Google Ads or Facebook Ads have built-in capabilities to run A/B tests, and the insights gained can help optimize your ad strategy.
Split testing in email marketing is similar to other forms of A/B testing. It involves creating two versions of an email with a single variable changed, sending them to a similar audience, and analyzing which one performs better.
There are many elements of an email that can be split tested. Subject lines are one of the most common since they have a significant impact on open rates. Other elements include the email copy, images, call to action, personalization, and the layout and design of the email. By testing different versions of these elements, you can continually optimize your emails and enhance their performance.
Beyond optimizing individual emails, split testing can also provide valuable insights into your audience and their preferences. For instance, you might discover that your audience responds better to certain types of subject lines or that they’re more likely to click on a CTA when it’s placed at the top of the email. These insights can help inform your overall email marketing strategy.
Email marketing consistently demonstrated one of the highest returns on investment (ROI) among various marketing channels. According to a survey by the Direct Marketing Association (DMA) and Demand Metric, email had a median ROI of 122% – more than four times higher than other marketing formats, including social media, direct mail, and paid search.
Email marketing’s impressive ROI can be attributed to several factors. Firstly, it allows for targeted messaging as businesses can segment their audience and tailor their emails based on various factors like purchase history, demographics, and behaviour. Secondly, email marketing is cost-effective. The costs of designing, testing, sending, and analysing an email campaign are typically much lower than for other marketing channels. Finally, email is a channel that most consumers are comfortable with and check frequently.
The Risks of Not A/B Testing
Without A/B testing, your marketing decisions might be based on intuition or guesswork rather than hard data. You might end up investing in strategies that don’t yield results, or you could miss out on opportunities to enhance engagement and conversion. Essentially, not doing A/B testing leaves you flying blind, making decisions based on assumptions rather than evidence.
The Value of A/B Testing
Ultimately, the reason you should conduct A/B tests is that they provide empirical evidence to inform your marketing decisions. They eliminate guesswork and allow you to optimize your marketing strategy based on what truly resonates with your audience. This can result in increased engagement, better conversion rates, and ultimately, improved return on investment. Furthermore, the insights gained from A/B testing can lead to a better understanding of your audience, which is invaluable in creating effective marketing strategies.
A/B testing is a critical tool in the modern marketer’s toolkit. It empowers you to make data-driven decisions and continually optimize your marketing strategies. Whether you’re a small business owner or part of a large organization, embracing A/B testing can significantly enhance your marketing outcomes.