The Big Story: Incrementality Measurement Makeover
October 13, 2022
Because of signal loss, brands don’t have many great options to measure the impact of their digital marketing.
But incrementality measurement, although often a lengthy and time-consuming process, can be transformative, especially when companies first try it. Just look at leather handbag brand Hammitt, which was able to cut its spend by 30% – and still grow sales – after implementing incrementality measurement.
“I suspect that [brands] do always have an early burst of value,” Senior Editor James Hercher says on this week’s episode. And that’s because when brands first onboard a new measurement vendor, they often discover areas of huge waste and meaningless spend.
The two brands Hercher recently spoke with about their incrementality approaches, Hammitt and clothing brand Vuori, are only two examples of the growing number of advertisers that are evaluating new and different measurement approaches.
Although some brands are using incrementality measurement because they don’t trust the self-reported attribution that the large ad platforms offer, sometimes incrementality can prove platform performance. Facebook prospecting, for example, showed a surprisingly high level of performance for Hammitt after it did its incrementality test.
But here’s the rub: If brands choose to increase their spend after receiving the results of their incrementality test, they don’t know quite how much to expand their budget before they’ll start seeing diminishing returns.
A platform like Etsy, Hercher notes, may only soak up so much ad spend before results crater. Amazon, by contrast, has the capacity to scale much more before its brands experience diminishing returns. Incrementality measurement enables tuning, but you can’t set it and forget it. Brands might need to recheck their work, and for those that want to move fast, these new measurement techniques can slow them down.
“You need to test tactics, it takes time, and you have to do it over and over again,” Hercher sums up.
While brands struggle to measure their advertising, regulators are taking a closer look at what are known as dark patterns.
The more you read about dark patterns, the more you notice them as you browse the internet.
Using A/B testing and algorithms, along with multi-step ecommerce checkout flows, companies can be more sneakily deceptive online than they can be in brick-and-mortar stores. At this point, most of us are unbothered by that chewing-gum-strategically-placed-at-checkout trick.
Because the Federal Trade Commission can only take action against “unfair and deceptive” business practices, most of the dark patterns that have attracted attention so far have been extremely egregious, like a farming app for kids that had to return $70 million in in-app purchases to parents whose kids had been duped by its “free” billing.
But a 12-year-old law, ROSCA, gave the FTC a little more muscle against unfair subscription practices. And the National Advertising Division, part of BBB National Programs, takes a more hands-on approach, offering guidelines to companies and referring some offenders, like StubHub, to the FTC. StubHub’s offense? Drip pricing, as in prices that rose by 24% to 29% from the advertised price during the final checkout screen.
As the FTC steps up its data privacy rulemaking, which does make mention of dark patterns, it’s possible that the agency could start to take more proactive action against companies that, until now, have mainly been admonished by self-regulatory organizations.