Quantify base-rate dilution in CTR

Quick Overview

This question evaluates a candidate's understanding of weighted averages, base-rate (dilution) effects, and algebraic manipulation of proportions when combining differing click-through rates across subpopulations.

Quantify base-rate dilution in CTR

Company: Meta

Role: Data Scientist

Category: Statistics & Math

Difficulty: easy

Interview Round: Technical Screen

Overall CTR is a volume-weighted average across notification types. Suppose baseline non-event notifications have CTR b = 2.0% and currently account for N messages. A proposed event notification has CTR e = 20.0% but initially accounts for only k messages. 1) Write the formula for overall CTR: C_overall = (b·N + e·k)/(N + k). 2) With N = 9,990 and k = 10, compute C_overall and the relative lift vs baseline; explain why a 10× CTR on a tiny volume yields a negligible overall change. 3) Derive the minimum share s = k/(N + k) required to achieve at least a 10% relative increase in overall CTR (i.e., C_overall ≥ 1.10·b), expressed in terms of b and e; then plug in b = 2.0%, e = 20.0% to solve for s. 4) Given a send-budget constraint, solve for the smallest integer k that meets the target when N is fixed at 1,000,000.

Quick Answer: This question evaluates a candidate's understanding of weighted averages, base-rate (dilution) effects, and algebraic manipulation of proportions when combining differing click-through rates across subpopulations.

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Oct 13, 2025, 9:49 PM
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Weighted-Average CTR and Volume Requirements

You are assessing the impact of introducing a new high-CTR event notification into an existing stream of baseline notifications. Overall CTR is the volume-weighted average across notification types.

  • Baseline (non-event) notification CTR: b = 2.0%
  • Event notification CTR: e = 20.0%
  • Baseline volume: N messages
  • Event volume: k messages

Answer the following:

  1. Write the overall CTR formula.
  2. With N = 9,990 and k = 10, compute the overall CTR and the relative lift vs. baseline. Explain why a 10× CTR on tiny volume yields a negligible overall change.
  3. Derive the minimum share s = k/(N + k) required to achieve at least a 10% relative increase in overall CTR (i.e., C_overall ≥ 1.10·b), in terms of b and e; then plug in b = 2.0%, e = 20.0% to solve for s.
  4. With N fixed at 1,000,000 and a send-budget constraint, solve for the smallest integer k that meets the target from (3).
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