What is ‘A-B Split’
A method of testing the effectiveness of marketing methods or media. Using A-B split marketing, a list of target names is split into two groups on a random basis, with one group designated as a control group and the other as a test group. The objective of the A-B split is to determine which single variable is the most effective in improving response rates to a marketing campaign or achieving some other desired outcome.
Explaining ‘A-B Split’
A-B split has been been used for mailing campaigns in the past, but has also successfully adapted for use in interactive media, for testing the effectiveness of e-mail blasts and banner advertisements.
For example, an email campaign by a newsletter publisher may include a specific “call to action” – such as subscribe within 48 hours to receive a 20% discount – embedded in the message to half the target audience, and no call to action (i.e. no solicitation to subscribe or mention of a discount) in the message to the other half. This will enable the publisher to determine if the “call to action” really works, and whether the response rate is good enough to justify the 20% discount.
Further Reading
- Economists' views about parameters, values, and policies: Survey results in labor and public economics – www.jstor.org [PDF]
- Event studies in economics and finance – www.jstor.org [PDF]
- Long‐run common stock returns following stock splits and reverse splits – www.jstor.org [PDF]
- Why do economists disagree about policy? – www.nber.org [PDF]
- The effects of reverse splits on the liquidity of the stock – www.jstor.org [PDF]
- Financial development and economic growth in Australia: An empirical analysis – link.springer.com [PDF]
- Individual-versus group-based financial incentives for weight loss: a randomized, controlled trial – www.acpjournals.org [PDF]
- Dual-class recapitalizations as antitakeover mechanisms: The recent evidence – www.sciencedirect.com [PDF]
- Corporate stakeholders and corporate finance – www.jstor.org [PDF]
