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What is Incrementality in Marketing?

Incrementality in marketing refers to the incremental benefit produced per unit of input stimulation. Incrementality is the lift in desired outcome (awareness, web visits, conversion, revenue, profitability) provided by marketing activity.

Incrementality measurement in marketing is especially needed for channels where ad impressions such as display, Facebook, social, or even TV are hard to measure. To measure incrementality, the audience is broken out into test groups (exposed to the ads) and a control group (suppressed from seeing the ads).

incrementality measurement design of experiment graph showing incremental lift in conversion rate between two exposed cohorts and a control group or suppressed group

How do I go about testing and measuring incrementality?

Incrementality testing and measurement provide the true incremental contribution of your paid media at the channel, tactic, campaign or ad set level. There are three (3) major types of marketing measurement techniques:

  1. Design of Experiments (DoE)
  2. Marketing Mix Modeling (MMM)
  3. Multi-Touch Attribution (MTA)

Incrementality measurement answers these questions in marketing:

  • Which media channel, publisher, campaign is contributing to my desired outcome (leads, LTV, ROAS, revenue, net profit/$, etc.)?
  • What happens if I start buying media from a vendor or if I reduce or stop buying ads with a vendor?
  • Will launching new campaigns or ads increase contribution to conversions at the portfolio level or will it cannibalize from other channels?

Incrementality in marketing examples:

  • Retargeting Incrementality Calculation Example
    • You withhold a small but statistical group of your audience and do not serve retargeting ads. On average, 10% end up repurchasing your products.
    • Test group receives ads, and they repurchase 13% of the time, so the incremental lift is 3% resulting in a 23% incrementality.
    • (%CR Test – %CR Control) / %CR Test
  • Soft Surroundings Retargeting Case Study
    • Measured’s retargeting experiment exposed that the incremental cost per acquisition CPA(i) was well above CPA targets and what was reported by the vendors. Their largest retargeting vendor by spend was heavily over indexed and serving ads beyond a recommended frequency cap.
    • RESULTS: Retargeting budgets were reduced by 52% in the next few months based on findings. The extra budget was shifted to higher performing prospecting tactics like Facebook. Topline revenue improved 17% MoM while yearly sales comps increased 12%.

Video: Leveraging Incrementality to Value Retargeting vs. Prospecting



In conclusion, incrementality in marketing allows you to see which audiences should be served, which ads, and on what platforms. Measured provides exactly that: cross-channel attribution and incrementality testing and measurement. It’s easy to set up as we’re already plugged into 100+ media platforms. Learn more here.

Author

Trevor Testwuide - CEO

Expert in business strategy and marketing measurement.

 

Multi-touch attribution is more challenging today due to limited tracking options, identity and cross-device resolution hurdles, data leakage and the massive amount of time it takes to implement.

 

What is cross-platform attribution (or cross-channel attribution) and why is it difficult?

The goal of cross-platform attribution in marketing is to gain clarity on the interplay and contribution of influence that each channel/tactic/campaign has on driving conversions over and above baseline sales.

It’s a task that has proved to be very difficult for many reasons including but not limited to:

  • Walled gardens are typically inaccessible to third-party tracking of impressions
  • Identity resolution across media platforms is quite low
  • Cross-device tracking is difficult and match rates are extremely low
  • Instrumenting a tracking infrastructure by a third party measurement provider has proved to be fraught with breakage and data leakage
  • It is extremely time consuming to implement without the help of a partner

Video: Landing a source of truth cross-channel media reporting dashboard

 

 

What are some cross-channel attribution tools?

MTA – collects individual, or user-level data, for trackable addressable media and conversion events in order to determine the impact of each media event to the desired conversion at the customer level. By summing the impact of each addressable media touchpoint on each customers’ likelihood to convert, MTA quantifies the total media channel lift provided by addressable media. MTA does not account for the impact of non-addressable media, and furthermore much addressable media is either non-trackable or lost due to the innumerable challenges of tracking data at the user level.

Incrementality Measurement – Incrementality in marketing refers to the incremental benefit produced per unit of input stimulation. Incrementality is the lift in desired outcome (awareness, web visits, conversion, subscriptions, revenue, profitability) provided by marketing activity.

Incrementality in marketing is especially needed for channels where ad impressions such as display, Facebook, social, or even TV are hard to measure. To measure incrementality, the audience is broken out into test groups (exposed to the ads) and a control group (suppressed from seeing the ads).

MMM – MMM is a top down (aggregate marketing data) and very artistic statistical exercise where one or more models (e.g. econometric, multi-linear regression) are leveraged to extract key information and insights by deriving information from multiple sources of marketing, economic, weather and financial data. MMM is also a high-touch consultative approach that is very manual with little to no automated data inputs, whereas MTA and Incrementality, when deployed properly, is a very automated approach leveraging preconfigured connectors that extract the required marketing data, across many channels, on regular cadence. (It’s important to note that MTA can take 6 months or more to deploy, whereas Incrementality can be up and running with reporting in 4-6 weeks.) See this article for more on why always-on automated experimentation is the future of marketing measurement.

Author

Trevor Testwuide - CEO

Expert in business strategy and marketing measurement.

 

Multi-touch attribution is more challenging today due to limited tracking options, identity and cross-device resolution hurdles, data leakage and the massive amount of time it takes to implement.