Business Context
MarketMakers, a digital marketing agency, launched a new campaign aimed at improving the conversion rates of its client’s website. They conducted an A/B test over 30 days, with one group receiving the new marketing materials (treatment) and the other group receiving the old materials (control).
Given Data
| Group | Sample Size | Conversions | Conversion Rate |
|---|
| Control | 50,000 | 6,250 | 12.5% |
| Treatment | 15,000 | 2,550 | 17.0% |
Task
Assess whether the observed increase in conversion rate of 4.5 percentage points from the marketing campaign is statistically significant.
Requirements
- State the null and alternative hypotheses.
- Calculate the pooled conversion rate and standard error.
- Compute the z-test statistic.
- Find the p-value (two-tailed test).
- Decide whether to reject H₀ at α = 0.05.
- Provide a business interpretation of the results: should MarketMakers recommend the new marketing materials?
Assumptions
- Users were randomly assigned to control/treatment groups.
- Each user is counted only once (no repeat visits).
- The test duration was sufficient to account for daily fluctuations in traffic.
