Press    What is Incrementality in Marketing?

Original Publisher

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.

 

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

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.

Original Publisher

 

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

Press    How Do You Calculate Incremental Sales Driven by a Media Tactic?

Original Publisher

The impact of a marketing tactic (eg: Facebook prospecting, retargeting, catalog, direct mail, national TV) is typically measured in terms of incremental sales driven by that tactic. Incremental sales driven by a media tactic are calculated using advanced marketing measurement techniques. There are three major types of advanced marketing measurement techniques.

  • Design of Experiments (DoE)
  • Marketing Mix Modeling (MMM)
  • Multi-Touch Attribution (MTA)

Once incremental sales are calculated for a tactic using one of the above techniques, the ROI for that tactic is calculated using the following formula.

 

 

Incremental sales driven by a media tactic are calculated using advanced marketing measurement techniques like experimentation, MMM or MTA.

The impact of a marketing tactic (eg: Facebook prospecting, retargeting, catalog, direct mail, national TV) is typically measured in terms of incremental sales driven by that tactic. Incremental sales driven by a media tactic are calculated using advanced marketing measurement techniques. There are three major types of advanced marketing measurement techniques.

  • Design of Experiments (DoE)
  • Marketing Mix Modeling (MMM)
  • Multi-Touch Attribution (MTA)

Once incremental sales are calculated for a tactic using one of the above techniques, the ROI for that tactic is calculated using the following formula.

 

Original Publisher

 

Incremental sales driven by a media tactic are calculated using advanced marketing measurement techniques like experimentation, MMM or MTA.

Press    What is Incrementality Testing and How Do You Measure Incrementality?

Original Publisher

What is Incrementality Testing?

Incrementality testing creates an experiment that systematically withholds media channel exposure to a representative subset of users (the control group) while maintaining normal media channel exposure to the broader user set (the test group). If the control group is both sizable enough to be statistically significant and selected at random such that they are broadly representative of the user base, then the media channel’s incremental contribution can be determined by the difference in business outcome (conversion, revenue, profitability, etc.) between the test and control groups.

Incrementality testing is sometimes referred to as Incremental Sales Lift, Uplift Modeling, or A/B testing.

Difference between Incrementality and Lift

  1. “Incrementality” indicates the portion of last touch conversions that were truly driven by that Media.
  2. “Lift” indicates the increase to the overall business that these incremental conversions represent.

Difference between Incrementality vs Lift

 

How Do You Calculate Incrementality?

In general, the control group should represent a minimum of 10 percent of the total test and control reach. The test group will receive your ad, media in question; the control group will not receive the ad message. There are multiple ways to build a control audience. Some examples are:

  1. Flight a placebo ad or PSA ad (Public Service Announcement) that is irrelevant to your business ad to an exact replica or mirror audience of the exposed audience.
  2. Hold out a subset of the target audience and suppress from the ad exposure.
  3. Programmatic executions have counterfactual bid loss data for the target audience that did not win the media auction.

In order to calculate incrementality, we want to calculate the conversion difference between the test group versus the control.

Incrementality Calculation Formula

(Test Conversion Rate – Control Conversion Rate) / (Test Conversion Rate) = Incrementality

Incrementality Test Calculation Example

Your test group saw 1.5% conversion whereas your control group saw a 0.5% conversion. The control data suggests that, without any media exposure, you would have seen a 0.5% conversion. Keep in mind that conversion could mean leads, sales, profit or whatever metric that is important to your business.

So (1.5% – 0.5%) / 1.5% = 66.7% incrementality in conversions

Incrementality is volatile and it is important to look at it longitudinally over time, within business context. Statistical significance has two primary variables: difference in conversion rates (%CR) and sample sizes. The larger the difference in conversion rates, the less sample you need. As a general rule, we like to see a control reach > 10% of the total test and control reach.

What Techniques Measure Incrementality of Marketing Channels?

Incremental sales driven by a media tactic are calculated using advanced marketing measurement techniques. There are three major types of advanced marketing measurement techniques.

Why is Incrementality Testing Needed?

Advertising where there are a lot of impressions but not immediate action like a click has brand value that ultimately leads to conversions or sales. Channels such as online display, video/YouTube, Facebook, TV, direct mail all provide impressions but it’s not always measured at the click or direct response level. You can read more about the following channels here:

Measured Incrementality Testing

Measured provides incrementality measurement and testing with ease and speed. We are already plugged into 100+ media platforms which allows us to run 100s of audience-level testing with quick set up. Find out your incrementality across your media channels.

Learn more here

 

Incrementality testing, when executed properly, can account for the pixel related blindness that occurs when trying to use MTA to measure the effectiveness of Walled Garden media.

What is Incrementality Testing?

Incrementality testing creates an experiment that systematically withholds media channel exposure to a representative subset of users (the control group) while maintaining normal media channel exposure to the broader user set (the test group). If the control group is both sizable enough to be statistically significant and selected at random such that they are broadly representative of the user base, then the media channel’s incremental contribution can be determined by the difference in business outcome (conversion, revenue, profitability, etc.) between the test and control groups.

Incrementality testing is sometimes referred to as Incremental Sales Lift, Uplift Modeling, or A/B testing.

Difference between Incrementality and Lift

  1. “Incrementality” indicates the portion of last touch conversions that were truly driven by that Media.
  2. “Lift” indicates the increase to the overall business that these incremental conversions represent.

Difference between Incrementality vs Lift

 

How Do You Calculate Incrementality?

In general, the control group should represent a minimum of 10 percent of the total test and control reach. The test group will receive your ad, media in question; the control group will not receive the ad message. There are multiple ways to build a control audience. Some examples are:

  1. Flight a placebo ad or PSA ad (Public Service Announcement) that is irrelevant to your business ad to an exact replica or mirror audience of the exposed audience.
  2. Hold out a subset of the target audience and suppress from the ad exposure.
  3. Programmatic executions have counterfactual bid loss data for the target audience that did not win the media auction.

In order to calculate incrementality, we want to calculate the conversion difference between the test group versus the control.

Incrementality Calculation Formula

(Test Conversion Rate – Control Conversion Rate) / (Test Conversion Rate) = Incrementality

Incrementality Test Calculation Example

Your test group saw 1.5% conversion whereas your control group saw a 0.5% conversion. The control data suggests that, without any media exposure, you would have seen a 0.5% conversion. Keep in mind that conversion could mean leads, sales, profit or whatever metric that is important to your business.

So (1.5% – 0.5%) / 1.5% = 66.7% incrementality in conversions

Incrementality is volatile and it is important to look at it longitudinally over time, within business context. Statistical significance has two primary variables: difference in conversion rates (%CR) and sample sizes. The larger the difference in conversion rates, the less sample you need. As a general rule, we like to see a control reach > 10% of the total test and control reach.

What Techniques Measure Incrementality of Marketing Channels?

Incremental sales driven by a media tactic are calculated using advanced marketing measurement techniques. There are three major types of advanced marketing measurement techniques.

Why is Incrementality Testing Needed?

Advertising where there are a lot of impressions but not immediate action like a click has brand value that ultimately leads to conversions or sales. Channels such as online display, video/YouTube, Facebook, TV, direct mail all provide impressions but it’s not always measured at the click or direct response level. You can read more about the following channels here:

Measured Incrementality Testing

Measured provides incrementality measurement and testing with ease and speed. We are already plugged into 100+ media platforms which allows us to run 100s of audience-level testing with quick set up. Find out your incrementality across your media channels.

Learn more here

Original Publisher

 

Incrementality testing, when executed properly, can account for the pixel related blindness that occurs when trying to use MTA to measure the effectiveness of Walled Garden media.