What is a geo-based experiment?

Analysis of Correct Answer(s)

A geo-based experiment (or geo-experiment) is a method used to measure the causal impact of a marketing campaign on business metrics like offline sales. The methodology is designed to create a controlled test environment.

• Non-overlapping geographic regions: This is a critical requirement. It ensures that the marketing activities in the treatment group (which is exposed to the campaign) do not influence or "spill over" into the control group (which is not exposed). This isolation is essential for an accurate measurement of the campaign's true effect.
• Random assignment: Regions are randomly assigned to either the control or treatment group. Randomization helps ensure that both groups are statistically similar before the experiment begins, minimizing bias from other variables like pre-existing sales trends or demographics.

This structure allows marketers to confidently attribute any significant difference in outcomes between the two groups directly to the marketing campaign.

Analysis of Incorrect Options

• The options stating that regions are assigned only to a test group or only to a control group are incorrect. A valid experiment fundamentally requires at least two groups for comparison to establish a baseline.
• The option mentioning overlapping geographic regions describes a flawed design. Overlap would contaminate the control group, making it impossible to isolate the campaign's incremental impact and rendering the experiment's results unreliable.