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Q: What is Incrementality in Marketing?

What Is Incrementality in Marketing?

2 minute read

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 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

 

Incrementality testing provides a view into the true contribution of paid media at the channel, tactic, campaign and ad set level.

 
How do I go about testing and measuring incrementality?
Incrementality testing and measurement provides the true incremental contribution of your paid media at the channel, tactic, campaign and sometimes 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 conversely, if I reduced or stopped 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, and 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% points 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%.
 
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 is a pioneer and expert in the cross-channel attribution category.