Why Brands Should Invest in Incrementality Testing to Boost Marketing Performance
Measurement is a critical component of any strong performance marketing strategy. If you don’t know how well you’re doing and what tactics specifically are driving improvement, you can’t make smart decisions about how to grow or be more efficient.
Consumers who see your ads, but don’t immediately convert, may still have had a meaningful engagement with your brand. It’s easy to think of strong direct response channels like Search and Shopping as living purely at the end of the shopping journey, but the truth is that all advertising has an additional impact beyond direct response. Consumers use multiple channels throughout the phases of their shopping journey, and understanding their impact is key to accurately measuring and optimizing your marketing. Let’s dive deeper into how measurement and incrementality testing can improve your marketing performance.
How can measurement improve my campaigns?
Many performance marketing campaigns are focused on remarketing to consumers who have already touched your brand. Are these campaigns driving true net growth and revenue, or are they just spending more to get the same conversions?
There are many different tools and approaches involved in solving this problem. At Adlucent, we believe it’s important to develop a measurement strategy that uses the right tools for the right time frame. The major platforms all have tracking options that report assisted or view-through metrics within their platform. There’s a slew of attribution tools that look across platforms and channels to accurately attribute marketing impact. We think these are important and useful tools. Still, we believe many brands should consider incrementality testing as another source of truth to provide more confidence and accuracy over a longer time.
What is incrementality testing?
Incrementality testing is simple: you take a campaign and create an experiment to understand the actual incremental impact of your business KPIs. So, instead of launching a campaign and measuring it based on its reported metrics alone, look at the actual impact that it had on your results overall. These are some questions to think about:
Did your overall business grow when you launched this new campaign?
Did it grow more than the campaign directly took credit for, where nothing else could have caused that growth?
Or, did the campaign just take conversions away from other existing marketing, adding cost but no net growth?
How is incrementality testing put in place?
Incrementality testing is typically done using a hold-out experiment. You find two identical groups of customers, often using a geo split, and spend more in one group than another against the campaign you’re testing. The bigger the difference in spend, the more accurate and faster your results, which is why a 100% hold-out in one group is often chosen.
After enough time has passed for your results to be statistically significant, you can compare the results from one group to the other. If the only difference was your marketing campaign, you could accurately understand that campaign’s true incremental impact beyond its reported numbers.
How has Adlucent used incrementality testing for clients?
One of our clients, an international e-commerce marketplace, was previously reliant on last-click attribution for measuring their Google Shopping spend. They were confident Google Shopping influenced more shoppers than just those who immediately clicked and purchased, but they weren’t sure how best to make budget adjustments based on that assumption.
Adlucent implemented our Lift Mentality tool to answer this question. Using our client’s first-party data, we built a geo-split test and heavied up spend in one region and measured the channel’s true incremental lift. We demonstrated that the actual lift in revenue was over 3x the revenue reported via the last-click model. With a better understanding of the true return, our client gained the confidence to grow their budgets and revenue in the channel.
How can I get started with Incrementality testing?
Do you understand the true incremental impact of your campaigns and channels? Are you confident that your new campaigns aren’t contributing more or less than campaign-level reporting indicates? You should consider including incrementality testing as an ongoing practice in your campaigns to make sure you’re taking a science-based approach to your performance marketing.
If you are interested in learning more about this strategy or need help with your performance marketing program, contact us for a free demo of our Lift Mentality tool!