Split Testing : Understanding normalized Control
Imagine you’re running an experiment where you want to see if a campaign made people spend more money. You split your audience into two groups: a treatment group (the ones who saw the campaign) and a control group (the ones who didn’t). But sometimes these groups aren’t the same size, so we need to make a fair comparison by adjusting the numbers.
Example
Imagine you have:
- 60 users in the treatment group (saw the campaign).
- 40 users in the control group (did not see the campaign).
- Each user spends $10.
At first glance, you might think the treatment group outperformed the control group because:
- Total spend in treatment group =
60 users * $10 = $600 - Total spend in control group =
40 users * $10 = $600
However, these groups are not the same size, so we need to normalize for a fair comparison.
Treatment group total spend: $600
Control group total spend: $400
Treatment group size: 60
Control group size: 40
Normalized control = ($800 / 40) \* 60 = $1200
Lift = Treatment group total spend - Normalized control = $1000 - $1200 = -$200
In this case, the negative lift indicates that the treatment group actually performed worse than expected based on the control group's performance.
Updated 13 days ago
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