Glossary · Business Analytics
Bayesian Inference
also: Bayesian statistics · Bayes' theorem
Definition
Bayesian inference updates prior beliefs about a parameter using observed data via Bayes' theorem to produce a posterior distribution. In A/B testing it directly answers 'what is the probability that B beats A?' — the question product teams actually ask — unlike the indirect counterfactual framing of frequentist p-values.
Bayes' theorem P(θ|D) = P(D|θ)·P(θ) / P(D) is the foundation. Practically, the posterior is often analytically tractable for conjugate models (Beta-Binomial for conversion testing) or sampled via MCMC for complex hierarchical models. Bayesian A/B testing allows continuous monitoring without inflating error rates, eliminates the peeking problem, and produces directly interpretable probabilities and expected-loss estimates.
Essays on this concept
- Business Analytics
Bayesian A/B Testing in Practice: When to Stop Experiments and How to Communicate Results to Non-Technical Stakeholders
Frequentist A/B testing answers a question nobody asked: 'If the null hypothesis were true, how surprising is this data?' Bayesian testing answers the question that matters: 'Given this data, what's the probability that B is actually better?'
- Marketing Engineering
Marketing Mix Modeling in the Privacy-First Era: Bayesian Structural Time Series Without User-Level Data
Cookies are dying. Deterministic attribution is shrinking. The irony: the measurement approach from the 1960s — Marketing Mix Modeling — is making a comeback, now powered by Bayesian inference that would have been computationally impossible when it was first invented.
- Marketing Engineering
Unified Measurement Architecture: Connecting MMM, MTA, and Experimentation Into a Single Source of Truth
MMM says Facebook works. MTA says Google works. The incrementality test says neither works as well as you thought. Three measurement systems, three different answers — here's how to reconcile them into one coherent picture.
Related concepts
Authoritative references