Investigate Declining ROI and Propose Effective Solutions

Q: Investigate Declining ROI and Propose Effective Solutions

This question evaluates a data scientist's skills in advertising effectiveness measurement, causal inference, experiment design, and diagnostic analytics for two-sided marketplaces, covering north-star and guardrail metrics, attribution, and root-cause analysis for declining ROI.

Q: How do I approach Analytics & Experimentation interview questions?

Analytics & Experimentation questions require understanding of core concepts and practice. PracHub provides solutions with explanations to help you master analytics & experimentation interviews.

Q: What difficulty level is this interview question?

This is a hard difficulty Analytics & Experimentation question, commonly asked during Technical Screen rounds at TikTok.

Q: What role is this question designed for?

This question is commonly asked for Data Scientist candidates at TikTok during technical interviews.

Question

E-commerce Ads Effectiveness and Diagnostics (Analytics & Experimentation)

Context

You are a data scientist on an e-commerce platform responsible for measuring advertising effectiveness and diagnosing performance issues across a two-sided marketplace (users and merchants). You work with paid placements/ads that affect merchant GMV and ad ROI.

Tasks

Resume Project Walkthrough

Describe one relevant project end-to-end:
- Objectives and success metrics (north-star and supporting/guardrail metrics).
- How you evaluated success (incrementality, attribution, and statistical evaluation).
- Key details of your A/B experiment design (unit of randomization, power/MDE, duration, interference handling, guardrails).

Case 1 — Grow Merchant Ad Revenue or Merchant GMV

The business wants to increase either merchant advertising revenue (ad spend on the platform) or merchant GMV. How would you:
- Frame objectives and select metrics.
- Analyze current performance (funnel, segments, cohorts).
- Propose data-driven actions and experiments.

Case 2 — ROI on Ads Has Declined

ROI/ROAS has recently fallen. Walk through how you would:
- Diagnose root causes with a structured metrics tree and analyses (segmentation, cohorts, time-series, experiment logs).
- Recommend short-term mitigations and longer-term fixes.

Consider Including

Clear north-star metric and supporting metrics.
Experiment setup for marketplaces with potential auction/interference effects.
Funnel, cohort, and segmentation analyses.
A hypothesis-driven root-cause framework and validation plan.

Investigate Declining ROI and Propose Effective Solutions

Quick Overview

E-commerce Ads Effectiveness and Diagnostics (Analytics & Experimentation)

Context

Tasks

Consider Including

Solution

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