AB testing — DiD Analysis

This article will talk about what DiD analysis is, the conceptual understanding, as well as the right use case, and constraints.

• Look at this article to see another AB testing method: PSM

Story Time

Let’s not worry about the mathematical part and start with an example. Imagine you are on the marketing team of Macdonald's, and your team just started a new advertising campaign. So you want to see if the sales increase after the campaign is launched. And you got this graph:

Your teammates found that the sales have been increasing after the launch date, so they said the campaign works! People see the advertisement and have the incentive to buy more. But is it the “truth”?

With this doubt, you pull the sales data from In-N-Out and got this graph:

Hmm, interesting right? Now it seems not just Macdonald’s sales increase and so do In-N-Out’s, then can we still say the advertisement really work? and what could be the possible reasons that…