Importance of A/B Testing for Businesses

60% of Australian startups fail within the first three years.

It is an incredibly high percentage with blood, sweat, and money going down the drain for thousands of Australians every year. 

As a business owner, you may be worried that you will inevitably lose steam and capital to contribute to this bleak statistic. This doesn’t have to be the case. 

A recent study found that startups that utilise A/B testing improves their performance by 30~100% after a year of use. 

So what is A/B testing, and how do you use it to help improve your business? 

What is A/B testing?

A/B testing is a method of experimentation that is often ignored and underutilised. It involves creating hypotheses and testing between variants. Doing this helps to determine which variant is more effective, and why this was the case.

A/B testing is often called a Randomised-control-trial, which is the gold-standard in determining the efficacy of treatment in Medicine.

Example: 

Our hypothesis is that the colour used in advertisements increases customer attention. 

Variant A has greatly improved clicks and interest from the two images shown above. 

The only difference between the two was the colours used in the image. This helps support our hypothesis  

But, it’s never really that easy. 

When testing anything, from a website, a product, or an advertisement, there are often multiple variables that must be accounted for. This means tens, maybe hundreds of tests need to be performed. Only then can you pinpoint exactly which variable is affecting the numbers, and by what degree.

Exploring hypotheses, finding statistical significance, and obtaining useful insights from testing is an integral part of data-based marketing. It may be time-consuming to test everything, but doing so clearly brings results.

How Performance Marketing helps A/B testing

Performance Marketing is a result-driven strategy within digital marketing. It focuses on experimentation to deliver metrics that matter. Metrics such as Customer Acquisition Costs and Lifetime Value. Real results.

Launcher Lab’s Creative Velocity approach works on a create-test-iterate basis. 

This means creating and testing hundreds of advertisements over time.

Through the sheer volume of ad creatives tested, Launcher Lab can learn what works and what doesn’t. 

This helps to iterate and optimise your ad creative to attract as many customers as possible. Saving both money and time for your business. And most importantly, bringing results that matter.

Creative Velocity isn’t often used due to how time-consuming and difficult it is. But, the results more than compensate for the effort. 

Conclusion

Launcher Lab is a Performance-based Digital Marketing Agency specialising in ad creative experimentation. Utilise A/B testing to improve your performance. Chat to us about how Performance Marketing can benefit your business today.