4 Examples Why Incrementality Measurement Is Important

Why Incrementality Measurement Is Important

Clay Cohen, Sr. Director of Product Marketing

Published 10/19/2023

Measuring the incremental impact of your advertising is crucial for optimizing budgets and cross-channel allocation. Incremental based measurement is future-proof (doesn’t require user-level data, all but absent in today’s privacy regulated world), it’s accurate (unlike other correlative forms of measurement, incrementality measurement measures true cause and effect), and its neutral, meaning it’s useful as a fair way to compare performance across different channels. It’s unsurprising that leading marketers (and even some of the platforms) have turned to test-based approaches like incrementality testing to better understand marketing’s true contribution to a brand’s business.

However, while many marketers recognize that incrementality measurement and optimization will improve their business outcomes, they're unsure of how to demonstrate its value to their organizations and internal stakeholders.

This dilemma recently came to light during a conversation with a Marketing VP who had moved from a large enterprise brand to a fast-growing startup. They had just crossed the $10 Million spend mark, and this person knew the brand needed to get accurate measurement in place to optimize their portfolio. . They sought guidance on how to demonstrate to  internal stakeholders that investing in incrementality-based testing and measurement would be worthwhile. 

We thought we would outline some common  scenarios that can help marketers more easily understand the value of incrementality-based measurement.. We’ll also outline some strategies to communicate these benefits to internal stakeholders effectively.

While the following examples are in order of “lowest hanging fruit” it’s important to take into consideration your media mix and other factors like how much you are spending, the duration of spending, your overall sales in that channel, and topline sales, when deciding on what to test first.

Scenario 1. Brand Search

Do I need to pay the “Google tax?”

Brand search is a great place to start your incrementality journey. This test allows businesses to evaluate whether they should bid on their own brand terms or rely more heavily on organic/SEO efforts. 

The “Google tax” is a classic example of identifying non-incremental media. When you spend on branded search ads for customers who were already on their way to your site, Google takes the credit, but the conversions are non-incremental, as they would have happened anyway - hence, the extra “tax". Most marketers know these conversions were not incremental, but they have trouble proving it. This is a perfect example of how incrementality tests can reveal the truth about your ad spend’s contribution.

By conducting an incrementality test, businesses can calibrate Google’s reported performance to reflect only the incremental conversions. This will help them evaluate the "Google tax" and more precisely allocate their budget to this tactic. 

Brands that operate in a highly competitive space may find that brand search is more incremental, whereas brand terms in a less competitive space may not really be contributing. Insights from these tests provide a clear understanding of how brand search impacts overall performance and the subsequent budget optimization opportunities.

Scenario 2. Facebook Prospecting

Proving the Value of Upper-Funnel Media

Facebook is still the bread and butter for most marketers; it’s the backbone of eCommerce growth. Facebook has immense targeting capabilities in the upper funnel that often goes undervalued due to limitations imposed by last-touch attribution models. This occurs due to the length of the consumer’s consideration cycle - the time it takes for them to make a purchase from when they see your ad. Upper funnel awareness and brand ads are usually the furthest away in time from the point of conversion. 

Incrementality tests with Measured monitor performance over a longer period of time than the Facebook look-back windows allow - resulting in  a more meaningful view of what's happening in the upper funnel and, hopefully, evidence you can increase your budget and/or keep investing into upper funnel tactics. This measurement approach also works very well with other upper channels/tactics like Connected TV, YouTube, Snap, TikTok, and more. Testing in these channels facilitates communication between marketers and finance and allows you to scale into upper-funnel channels confidently.

Scenario 3. Retargeting

What's the true return of retargeting?

While retargeting is a powerful tool for converting customers who have shown interest in your brand, it often receives overinflated credit due to its click-based, lower-funnel nature. This occurs because the users that are being retargeted often have a very high intent to purchase. Most marketers know this, but they do not know how much its overvalued. Multi-touch attribution (MTA) models are especially guilty of over-inflating credit to retargeting since it is constantly ‘showing up’ in the path to conversion regardless of its causality.  

The only way to determine the real cost per acquisition (CPA) or return on ad spend (ROAS) of retargeting is to run an incrementality test. This type of incrementality test helps marketers understand the genuine contribution of and the overall viability of investments in retargeting. This works on retargeting for a single tactic or retargeting as a whole. We will never advocate for abandoning retargeting; however, measuring the incrementality of retargeting ensures fair credit allocation across various marketing channels.

Scenario 4. Non-Brand Search

Unveiling the Power of Paid Search Campaigns

Beyond brand terms, it is equally important to test the effectiveness of non-brand search campaigns. This testing phase helps businesses evaluate how well their paid search efforts drive new incremental customers and orders. Similar to Facebook Prospecting, a non-brand search can often provide the awareness that a brand needs to start engaging with the consumer. Analyzing the results of an incrementality test on non-brand search offers marketers valuable insights into the true impact of paid search campaigns, enabling data-driven decisions to optimize advertising strategies.

How Measured Can Help

Understanding incrementality is a journey, and each test brings you closer to the data-driven marketing approach needed to thrive in today's competitive landscape. Measured is the leading measurement and optimization platform for connecting media to business outcomes. Prove your ad spend’s value, allocate efficiently, and unlock incremental growth.

Schedule a demo today to learn more about what Measured can do for your incrementality testing journey.