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Statistics Problem: Are Visa's new ads successful?

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).

Solution Preview

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.
...

Solution Summary

The expert determines whether Visa's new ads are successful.

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