Understanding and incorporating incrementality testing in marketing

Understanding and incorporating incrementality testing in marketing

Nick Stoltz, Expert in Cross-Channel Measurement Strategy and Adoption

Published 05/15/2023

Welcome back to our incrementality series, where we dive into the world of incrementality testing to help you optimize your marketing strategy. We'll discuss how marketers can utilize incrementality tests to validate their media spend, build an experimental learning program, and actively incorporate it into their attribution practice. If you missed our previous post, we highly recommend you check it out to get a solid foundation on this topic.

Understanding the Importance of Incrementality Testing in Marketing

As the digital marketing landscape continues to change and grow increasingly complex, it's essential for marketers to deploy a dependable approach to measure the true incremental impact of their marketing campaigns.

Incrementality testing offers this crucial insight, enabling marketers to make informed decisions and fine-tune their marketing strategies. In this blog, we'll discuss three ways marketers use incrementality tests, each building on the previous as marketers become more sophisticated in their incrementality practice.

Validation: The First Step in Incrementality Testing

At its core, incrementality testing is all about validation. No matter the media channel or tactic, incremental test results can validate the lift, measure contribution to sales, and calculate incremental efficiency metrics like Incremental Revenue on Ad Spend, ROAS (i). This helps marketers determine if their campaigns are meeting or exceeding targets and fine-tune their marketing strategies accordingly.

To ensure reliable validation, consider the following best practices:

  • Design your tests to minimize biases and accurately measure incremental impact.
  • Choose appropriate key performance indicators (KPIs) that align with your overall business goals.
  • Set clear benchmarks and targets for your tests to evaluate their success.

Developing an Experimental Learning Agenda

Once you've got a handle on validation, it's time to level up your incrementality testing by incorporating it into a broader experimental learning agenda. This agenda should include quarterly planning, use testing to answer key strategic questions, and continuously build on previous tests.

By adopting a continuous test and learn approach, marketers can evolve their incrementality testing from a one-off validation exercise into an ongoing practice that drives strategic decision-making and budget optimization.

To create a successful experimental learning agenda, consider the following:

  • Establish a regular cadence for your incrementality tests to ensure continuous learning.
  • Prioritize your key strategic questions and hypotheses to guide your testing roadmap.
  • Collaborate with cross-functional teams to ensure alignment and support for your testing initiatives.

Incorporating Incrementality Testing into Attribution Practices

The most sophisticated and effective use of incrementality testing is integrating it into your existing attribution and decision-making practices. Regardless of your chosen attribution method – be it marketing mix modeling, or another approach – regular and systematic incremental testing is essential for calibration and enhancement.

Incorporating incrementality tests into your attribution practices ensures that you're optimizing your media spend based on incremental results. Additionally, it allows for quick adaptation to changes driven by seasonality, brand or product media strategy shifts, or external environmental factors like iOS14.5.

To seamlessly integrate incrementality tests into your attribution practices, consider these tips:

  • Align your incrementality testing with your attribution methodology to ensure consistency in measurement.
  • Regularly recalibrate your attribution models with up-to-date incremental test results.
  • Monitor and adjust your attribution models with incrementality tests to account for changes in consumer behavior, market dynamics, and industry trends.

To summarize…

Marketers can make the most of incrementality tests by:

  1. Using them for validation to fine-tune their media spend.
  2. Building an experimental learning program to drive strategic decision-making.
  3. Incorporating incrementality tests into their attribution and decision-making practices.

By actively informing your attribution and media optimization with regular and systematic incrementality tests, you'll establish a best-in-class attribution practice that drives optimal marketing results. So, take the leap and start using incrementality tests today to unlock your marketing potential. Implementing these strategies and best practices will give you a competitive edge in the ever-evolving marketing landscape.

About Measured

At Measured, we offer a one-of-a-kind media optimization platform fueled by incrementality intelligence, empowering consumer brands to validate, plan, test, and optimize their advertising spend to drive tangible business outcomes. Our tried-and-true methodology combines each brand's unique performance data with results from years of ongoing testing across all channels and tactics, unveiling the genuine contribution of advertising spend to incremental sales.

In contrast to other attribution providers that rely on user-level tracking and data that is no longer accessible or reliable, Measured remains unaffected by changes to data privacy policies and regulations. Since 2017, leading consumer brands worldwide have placed their trust in Measured's insights to make critical media investment decisions through automated solutions for incrementality-based attribution, in-market testing, benchmarking, and scenario planning.

Ready to take your marketing strategy to the next level? Schedule a demo with Measured today and discover how our innovative analytics platform can transform your business. Click here to book your demo now!

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