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Objective: The task is to determine if the red advertisement is more effective than the blue advertisement based on the number of clicks each received.
Approach: To solve this, we will use a two-proportion Z-test. This statistical test is used to compare the proportions of two independent groups to see if there is a significant difference between them.
1. Define the Hypotheses:
2. Sample Proportions:
3. Pooled Proportion:
4. Calculate the Standard Error (SE):
5. Calculate the Z-Statistic:
6. Determine the P-Value:
7. Conclusion:
This test helps assess whether the observed difference in click-through rates between the red and blue ads is statistically significant. While the red ad had a higher click-through rate, the evidence is not strong enough to conclude that the difference is not due to random chance. Increasing the sample size or conducting further tests could provide more definitive results.