A-B Split

DEFINITION of 'A-B Split'

A method of testing the effectiveness of marketing methods or media. Using A-B split marketing, a list of target names is split into two groups on a random basis, with one group designated as a control group and the other as a test group. The objective of the A-B split is to determine which single variable is the most effective in improving response rates to a marketing campaign or achieving some other desired outcome.

BREAKING DOWN 'A-B Split'

A-B split has been been used for mailing campaigns in the past, but has also successfully adapted for use in interactive media, for testing the effectiveness of e-mail blasts and banner advertisements.


For example, an email campaign by a newsletter publisher may include a specific "call to action" - such as subscribe within 48 hours to receive a 20% discount - embedded in the message to half the target audience, and no call to action (i.e. no solicitation to subscribe or mention of a discount) in the message to the other half. This will enable the publisher to determine if the "call to action" really works, and whether the response rate is good enough to justify the 20% discount.

RELATED TERMS
  1. Australian Bureau of Statistics ...

    Australia's national statistical office. The mission statement ...
  2. Reverse/Forward Stock Split

    A stock split strategy that includes the use of a reverse stock ...
  3. Split-Up

    A corporate action in which a single company splits into two ...
  4. Split Block Pricing

    The act of dividing a large order of financial securities into ...
  5. Push Out

    One of two ways to effect a stock split. In a push out, new share ...
  6. Marketing Campaign

    Specific activities designed to promote a product, service or ...
Related Articles
  1. Bonds & Fixed Income

    Introduction To Asset-Backed And Mortgage-Backed Securities

    In this article, we will go through the structure, along with some examples of ABS and valuation.
  2. Investing

    Understanding Stock Splits

    Find out how stock splits work and how they affect investors.
  3. Investing Basics

    Stock Splits: A Closer Look At Its Effects

    Most trades, including short sales and options, aren't materially affected by a stock split. Still, it's important for shareholders to understand how these events impact various aspects of investing. ...
  4. Investing Basics

    If You Had Invested Right After Amazon's IPO

    Find out how much you would have made if you had invested $1,000 during Amazon's IPO, including how the power of the stock split affects investment growth.
  5. Investing Basics

    How To Profit From Stock Splits And Buybacks

    If stock splits and buybacks have been a bit of a mystery to you, you're not alone. Learn some great tips.
  6. Mutual Funds & ETFs

    Top 3 Alliance Bernstein U.S. Equity Mutual Funds (ADGYX, AUUYX)

    Discover and compare three Alliance Bernstein U.S. equity mutual funds. Learn about their investment strategy, characteristics and returns.
  7. Investing

    The New ETF That's Profiting From Stock Splits

    Stock splits are typically seen as bullish events, even though they don't change the value of your investment. They simply increase the number of shares outstanding and reduce the price per share ...
  8. Mutual Funds & ETFs

    4 Best AllianceBernstein Mutual Funds (AB)

    Discover the four best mutual funds administered and managed by AllianceBernstein that invest in fixed income securities and stocks.
  9. Mutual Funds & ETFs

    Top 3 AllianceBernstein Alternative Mutual Funds (SPG, AVB)

    Discover how to add diversification to a portfolio with nontraditional strategies and investments through three top mutual funds from AllianceBernstein.
  10. Bonds & Fixed Income

    What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.
RELATED FAQS
  1. Does a stock split lead to the gapping up/down of the stock?

    If a company splits its stock, there will be no gapping of the stock due to the split itself. A stock split does not materially ... Read Answer >>
  2. How and why does a stock split?

    Learn why stock splits do not occur very often for individual stocks, and understand the impact of reverse stock splits on ... Read Answer >>
  3. What are reverse stock splits?

    A reverse stock split is a corporate action in which a company reduces the number of shares it has outstanding by a set multiple. ... Read Answer >>
  4. What is a split-adjusted share price?

    If a company has undergone stock splits over its lifetime, comparing historical stock prices to those of the present day ... Read Answer >>
  5. What is a stock split? Why do stocks split?

    All publicly-traded companies have a set number of shares that are outstanding on the stock market. A stock split is a decision ... Read Answer >>
  6. Why would you undertake a reverse split?

    Find out how to identify and interpret a reverse stock split, and take a look at a few historical examples from major financial ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center