Multivariate Testing - A Powerful Tool For Internet Marketers

by David Cross

For as long as I can remember, there's been a fundamental problem with running pretty much any business. Finally, there's a solution...

Every businessperson faces the same challenge every day. Namely, how do you combine the resources you have at your disposal to produce the best, most profitable outcome?

When it comes to online businesses, the problem is the same...

Let's use pay-per-click (PPC) advertising as an example. How do you combine headline and content and offer at an optimal cost to convert the highest number of qualified prospects into paying customers or newsletter subscribers?

A problem like this can seem nearly impossible to solve. There are so many elements to consider that you can quickly come up with thousands of possible combinations. And that makes it unlikely that you'll be able to calculate the single combination of elements that will produce the best result.

So you take a chance, pick one of the possible permutations, and say, "We'll do it this way." Let's face it - you have to do that, or it would take forever to make a decision and get on with your business.

But 'this way' may not be the best way. A different combination of elements could produce a better result. The only way to find out is to test a new combination. And then another one... and another one.

What you need is a way to test a number of possible combinations simultaneously.

If you could test several different combinations of offer, headline, and content for your PPC ad, you could come to a pretty definite conclusion that one is truly better than the others.

Now, this is actually possible. It's known as 'multivariate testing'. And it can be used for any aspect of online business where there is a measurable goal...

Why you should 'multivariate'

A number of companies offer software that can help you develop multivariate tests. These include Google, Verster, and Sitespect. You can also find 'behavioural targeting' systems, such as Omniture's 'Touch Clarity', that adapt site content based on site visitor actions.

Google's Website Optimizer tool is a good one to use. It's quick and simple to use and it does the maths for you to show what is working and what isn't. Plus, it's free.

You can also find a good online support group for it, and a number of tutorials and learning resources.

If you're unfamiliar with testing, or need a brush up, I recommend that you read some of the classic direct-marketing books. Ogilvy on Advertising will give you a good understanding of why and how to approach testing, and what to test. Another classic is Scientific Advertising by Claude Hopkins.

One of the first things you might want to test is your PPC landing pages. For instance, you could test two variations of a headline. Or you could test the content of a page by breaking a paragraph into benefit-driven bullet points.

Google's tool guides you through the process, and calculates all the numbers. Depending on the amount of traffic your landing page gets, you get an indication of what is working within a few days.

For example, you might start to see that a certain headline on your PPC ad is starting to get more orders... or that including a certain price in the ad gets more people to click through to your landing page.

Over time, a more accurate picture begins to emerge of which combination of individual elements produces the best overall result.

Of course, you could do the statistical analysis yourself to see how the variations you're testing are performing. But it would mean a huge expenditure of time and energy.

Since you have a business to run, using Google or some other multivariate testing software is a much better option.

In the multivariate tests I've conducted, the 'worst' improvement I've ever seen was 24 percent. And I know of reputable marketers who've had improvements approaching 400 percent.

I first started doing business online 20 years ago. In my experience, multivariate testing is the most powerful tool that has emerged since then for Internet marketers. I encourage you to use this approach to your online business without delay.