Randomistas by Andrew Leigh

Author:Andrew Leigh
Language: eng
Format: epub
Publisher: Schwartz Publishing Pty. Ltd

10

TREAT YOURSELF

For a few days in July 2017, people searching Google for ‘randomised trial’, ‘A/B testing’ or ‘RCT’ might have seen an ad pop up in the sidebar. At the bottom of the ad were the words ‘A new book due in 2018’ and a link to my publisher’s website.

But it was the first part of the ad that mattered. Web surfers were randomly shown one of twelve possible book titles, including Randomistas: Experiments That Shaped Our World, Randomistas: The Secret Power of A/B Tests and The Randomistas: How a Simple Test Shapes Our World. My editors and I each had our favourite titles, but we had agreed to leave the final decision to a randomised experiment. The medium that brought you cat videos, the ice bucket challenge and Kim Kardashian would choose this book’s title.

A week later, over 4000 people had seen one of the advertisements, and we had a clear winner. People who saw Randomistas: How Radical Researchers Changed Our World, were more than twice as likely to click the ad as those who saw Randomistas: The Secret Power of Experiments. The worst performing title (not a single person clicked on it) was Randomistas: How a Powerful Tool Changed Our World. The experiment took about an hour to set up, and cost me $55.

A few years earlier, I had written a book on inequality for the same publisher. My editor wanted to call it Fair Enough? My mother suggested Battlers and Billionaires. After running Google ads for a few days, we found that the click rate for my mother’s title was nearly three times higher. My editor graciously conceded that the evidence was in, and Battlers and Billionaires hit the shelves the following year.

Were these experiments perfect? No way. Since I was trying to sell books, the ideal experiment would have randomised book covers – perhaps on Amazon or in a bookstore. But that would have taken more time and money than I had available. Figuring that people searching about a topic were sufficiently similar to people who would buy books about that same subject seemed a reasonable assumption.

Anyone looking to run a better email campaign or redesign a website has dozens of online tools at their fingertips, including AB Tasty, Apptimize, ChangeAgain, Clickthroo, Kameleoon, Optimizely, SiteSpect and Webtrends. Retailers using the Amazon platform can even use Splitly, which randomly changes product descriptions and images. As we saw in Chapter 8, Amazon promised in 2000 never to run pricing experiments. But today, Splitly lets third-party retailers use the Amazon platform to randomly vary prices. The site claims to have generated nearly US$1 million in new sales through A/B testing on Amazon. Algorithms like these are one reason that Amazon’s prices fluctuate wildly. To see this, check out the website CamelCamelCamel. com, which shows past prices for Amazon products sold by third-party retailers. In the years 2014 to 2017, the best price of the game Classic Twister ranged from $3.48 to $49.80.1

When I taught introductory economics at the Australian

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