Statistics Problem: Are Visa's new ads successful?
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In 2006, Visa wanted to move away from its long running television advertising them of "Visa, it's everywhere you want to be." During the Winter Olympics, Visa featured Olympians in commercials with a broader message, including security; check cards, and payment technologies such as contactless processing. One of the first commercials featured snowboarder Lindsey Jacobellis being coached to calm down before a big race by imagining that her Visa Check Card got stolen. A key metric for the success of television advertisements is the proportion of viewers who "like the ads a lot." Harris Ad Research Service conducted a study of 903 adults who viewed the new Visa advertisement and reported that 54 indicated that they "like the ad a lot." According to Harris, the proportion of a typical television advertisement receiving the "like the ad a lot" score is 0.21.
A) Use the six-step critical value approach to hypothesis testing and a 0.05 level of significance to try to prove that the new Visa ad is less successful than a typical television advertisement.
B) Use the five-step p-value approach to hypothesis testing and a 0.05 level of significance to try to prove that the new Visa ad is less successful than a typical television advertisement.
C) Compare the results of (a) and (b).
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Solution Summary
The expert determines whether Visa's new ads are successful.
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A) Step 1: Ho: p>=0.21
Ha: p<0.21
Step 2: The significance level is 0.05.
The degree of freedom is 903-1=902.
Step 3: Since np=903*0.21>5, n(1-p)>5, we could use normal distribution to solve this question.
step 4: At 0.05 significance level, since it is one tailed z test, the critical value -s -1.65.
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