This is the blog post that led to Myna. Sign up now and help us beta test the world’s fastest
A/B testing product!
Were I a betting man, I would wager this: the supermarket
nearest to you is laid out with fresh fruit and vegetables
near the entrance, and dairy and bread towards the back of
the shop. I’m quite certain I’d win this bet enough times
to make it worthwhile. This layout is, of course, no
accident. By placing essentials in the corners, the store
forces shoppers to traverse the entire floor to get their
weekly shop. This increases the chance of an impulse
purchase and hence the store’s revenue.
I don’t know who developed this layout, but at some point
someone must have tested it and it obviously worked. The
same idea applies online, where it is incredibly easy to
change the “layout” of a store. Where the supermarket
might shuffle around displays or change the lighting, the
online retailer might change the navigational structure or
wording of their landing page. I call this process content optimisation.
Any prospective change should be tested to ensure it has a
positive effect on revenue (or some other measure, such as
clickthroughs). The industry standard method for doing
this is A/B testing. However, it is well known in the academic community
that A/B testing is significantly suboptimal. In
this post I’m going to explain why, and how you can do
better.
There are several problems with A/B testing:
-
A/B testing is suboptimal. It simply doesn’t increase
revenue as much as better methods.
-
A/B testing is inflexible. You can’t, for example, add a
new choice to an already running test.
-
A/B testing has a tedious workflow. To do it correctly,
you have to make lots of seemingly arbitrary choices
(p-value, experiment size) to run an experiment.
The methods I’m going to describe, which are known as bandit algorithms, solve all these problems. But first, let’s look at the
problems of A/B testing in more detail.
Suboptimal Performance
Explaining the suboptimal performance of A/B testing is
tricky without getting into a bit of statistics. Instead
of doing that, I’m going to describe the essence of the
problem in a (hopefully) intuitive way. Let’s start by
outlining the basic A/B testing scenario, so there is no
confusion. In the simplest situation are two choices, A
and B, under test. Normally one of them is already running
on the site (let’s call that one A), and the other (B) is
what we’re considering replacing A with. We run an
experiment and then look for a significant difference,
where I mean significance in the statistical sense. If B is significantly better
we replace A with B, otherwise we keep A on the site.
The key problem with A/B testing is it doesn’t respect
what the significance test is actually saying. When a test
shows B is significantly better than A, it is right to
throw out A. However, when there is no significant
difference the test is not saying that B is no
better than A, but rather that the data does not support
any conclusion. A might be better than B, B might be
better than A, or they might be the same. We just can’t
tell with the data that is available*. It might seem we
could just run the test until a significant result
appears, but that runs into the problem of repeated significance testing errors. Oh dear! Whatever we do, if we stick exclusively with
A/B testing we’re going to make mistakes, and probably
more than we realise.
A/B testing is also suboptimal in another way — it doesn’t
take advantage of information gained during the trial.
Every time you display a choice you get information, such
as a click, a purchase, or an indifferent user leaving
your site. This information is really valuable, and you
could make use of it in your test, but A/B testing simply
discards it. There are good statistical reasons to not use
information gained during a trial within the A/B testing
framework, but if we step outside that framework we can.
* Technically, the reason for this is that the probability
of a type II error increases as the probability of a type
I error decreases. We control the probability of a type I
error with the p-value, and this is typically set low. So
if we drop option B when the test is not significant we
have a high probability of making a type II error.
Inflexible
The A/B testing setup is very rigid. You can’t add new
choices to the test, so you can’t, say, test the best news
item to display on the front page of a site. You can’t
dynamically adjust what you display based on information
you have about the user — say, what they purchased last
time they visited. You also can’t easily test more than
two choices.
Workflow
To setup an A/B experiment you need to choose the
significance level and the number of trials. These choices
are often arbitrary, but they can have a major impact on
results. You then need to monitor the experiment and, when
it concludes, implement the results. There are a lot of
manual steps in this workflow.
Make out like a Bandit
Algorithms for solving the so-called bandit problem
address all the problems with A/B testing. To summarise,
they give optimal results (to within constant factors),
they are very flexible, and they have a fire-and-forget
workflow.
So, what is the bandit problem? You have a set of choices
you can make. On the web these could be different images
to display, or different wordings for a button, and so on.
Each time you make a choice you get a reward. For example,
you might get a reward of 1 if a button is clicked, and
reward of 0 otherwise. Your goal is to maximise your total
reward over time. This clearly fits the content
optimisation problem.
The bandit problem has been studied for over 50 years, but
only in the last ten years have practical algorithms been
developed. We studied one such paper in UU. The particular details of the algorithm we studied are
not important (if you are interested, read the paper –
it’s very simple); here I want to focus on the general
principles of bandit algorithms.
The first point is that the bandit problem explicitly
includes the idea that we make use of information as it
arrives. This leads to what is called the
exploration-exploitation dilemma: do we try many different
choices to gain a better estimate of their reward
(exploration) or try the choices that have worked well in
the past (exploitation)?
The performance of an algorithm is typically measured by
its regret, which is the average difference between its actual
performance and the best possible performance. It has been shown that the best possible regret increases logarithmically
with the number of choices made, and modern bandit algorithms are optimal (see the UU paper, for instance).
Bandit algorithms are very flexible. They can deal with as
many choices as necessary. Variants of the basic
algorithms can handle addition and removal of choices,
selection of the best k choices, and exploitation
of information known about the visitor.
Bandits are also simple to use. Many of the algorithms
have no parameters to set, and unlike A/B testing there is
no need to monitor them — they will continue working
indefinitely.
Finally, we know bandits work on the web, as much of the
current research on them is coming out of Google, Microsoft, Yahoo!, and other big Internet companies.
So there you have it. Stop wasting time on A/B testing and
make out like a bandit!
Join Our Merry Band
Finally, you probably won’t be surprised to hear we are
developing a content optimisation system based on bandit
algorithms. I am giving a talk on this at the Multipack
Show and Tell in Birmingham this Saturday.
We are currently building a prototype, and are looking for
people to help us evaluate it. If you want more
information, or would like to get involved, get in touch and we’ll let you know when we’re ready to go.
Update: In case you missed it at the top, Myna is our content optimisation system based on bandit
algorithms and we’re accepting beta users right now!
