Test vs. Control Methodology

In marketing campaigns, marketers send campaign ads to selected customers ("test group") and putting aside the randomly selected some group of customers ("control group") from the campaign. The idea is to determine the effectiveness of the compaign by comparing the sales generated from the "test group" and "control group".

For example, an ecommerce website has segmented customers to send "50% discount on clothing" campaign and they send this campaign to only 50k of them (“test group”), put aside a randomly-selected 5k customers (“control group”) who will not receive it. Once the campaign is over, they will determine the effectiveness of the campaign by comparing the additional revenues generated by the test group with those generated by the control group.

Campaign Result : Test vs. Control
Test vs. Control Methodology
Total Revenue from Campaign = $1,125 + $63 = $1,187.5
Profit from Campaign = $1,187.5 - $687.5 = $500
Coursera Data Science
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