Statistical Rigor in Growth Marketing
Mastering A/B Test Hypothesis Testing
A/B testing uses two-proportion hypothesis testing to determine whether an observed difference in user behavior between a baseline Control (A) and a challenger Treatment (B) is statistically significant.
- Type I Error (False Positive, α): Concluding that a variation is better when it is actually not. Standard industry threshold is α = 0.05 (95% confidence).
- Type II Error (False Negative, β): Failing to detect a real improvement. Standard industry power threshold is 1 - β = 0.80 (80% statistical power).
- Two-Tailed p-value: The probability of observing a difference as large as the test result assuming the null hypothesis ($CR_A = CR_B$) is true.
- Commercial Impact: Small absolute conversion lifts compound massively across large digital traffic funnels.
Diagnose multi-step drop-offs in the Conversion Funnel Lab.