Incrementality is gaining ground as a cookieless marketing measurement solution to the new data limitations of online advertising. In this transition period, as practitioners begin exploring new ways of measuring their media and valuing their strategies, or even replacing multi-touch attribution (MTA) with incrementality, they are quickly realizing that this shift will require a different mindset than before.
To manage MTA within a marketing organization, the bulk of the work is on the front side to connect all of their channels and tactics into an attribution vendor’s platform. Once the integrations/pipes are in place, marketers can run campaigns as normal and wait for their MTA platform to connect the individual consumer journeys that convert. Then, the system applies the math to attribute the value of each conversion to the various marketing touchpoints along the user’s path. The end result is that the conversion/revenue for each channel/tactic is adjusted to the new, MTA-assigned values.
Incrementality is a bit different.
It doesn’t require the major upfront integrations that MTA does, but it does need an operator to specify which things to measure and how to best measure them. In today’s post, I will explain more about this and it should help you better understand what a marketer’s role will be when using incrementality.
Incrementality testing identifies where you might be under- or over-valuing elements within your programs
Incrementality can help you measure the impact of your investments using the same metrics the rest of the business relies on and tell you if those investments are being under-credited or over-credited with regards to their incremental value to the organization.
For example, an incrementality test may prove that a brand’s YouTube advertising is being under-credited by its own conversion reporting. YouTube’s own analysis might show that the channel has a $4 Return-on-Ad-Spend (RoAS) ratio—delivering back $4 in sales for every $1 spent—but once a true incrementality test is performed, it may prove that the channel is actually delivering a $6 ROAS. This means the YouTube ads are performing 50% better than had previously been reported. Using this information, marketers can now allocate budgets better and optimize their campaigns holistically.
As a marketing measurement methodology, incrementality is a test-and-learn approach. This means that marketers need to identify which parts of their campaigns they want to measure and set up tests to get to those answers. Unlike MTA, the deep, upfront integration phase is not needed with incrementality. This can be helpful when it comes to new or emerging tactics/channels as marketers don’t have to ensure those connections are set up beforehand.
How incrementality measurement is operationalized within a marketing org
For the purposes of this discussion, imagine practitioners at a brand who have decided to pursue an incrementality approach to their marketing measurement. They have a strong feeling that certain parts of their campaigns are being either over-credited or under-credited in terms of their contribution to overall performance.
What does this team do next? How do they get started with incrementality testing?
Build a list of things you want to test with incrementality
The biggest difference with incrementality and what marketers are generally used to with MTA is that because incrementality isa test-and-learn approach, it requires marketing teams to identify things to test.
What are some of the questions worth testing with incrementality?
Here are some of the most popular, burning questions we’ve heard from marketers that they want incrementality tests to answer:
- Are my aggregate marketing investments helping me grow my business?
- Does this channel drive incremental value or would these conversions have happened anyway?
- What is the impact of one channel on another? If I spend more in one channel, does it help/assist another?
- What is the optimal level of investment for a specific channel? Are we spending too much or too little?
- What is the effect of upper-level tactics on lower-funnel activity?
- How does my offline media assist my online media performance? And vice-versa?
- Are my promotions and sales worth the discount I’m offering or am I just leaving money on the table?
This is new for most teams, and if there team members who aren’t sure where to start, you could encourage them to start the big picture by thinking about questions like:
- What are some of the largest questions or challenges facing you and your team(s)?
- Are there any questions that have been a running topic of debate internally or with your customers?
- What are the three channels your business is most heavily invested in?
- Within those channels, what are the 2-3 tactics where you’re most heavily invested?
- What major campaigns or initiatives do you have coming up next quarter or in the next half?
Translate a business question into an incrementality test: an example
We’ve found that the best way to approach the incrementality testing process is to begin with a burning business question. Then, an incrementality test question is formed that might be able to shed some light on that initial business question.
Business Question: The world is opening up. Can upper funnel channels help educate new customers and drive acquisition?
We built out a plan that starts with a very straightforward thing to test.
Incrementality Test Question: How can we measure the combined impact of CTV, online video, and audio on new customer acquisition?
Of course, the results from a test may lead to even more questions—and things to test. Based on the results of that test, they could then with a series of tests to dig even deeper:
- What impact do the individual channels have on total revenue?
- Which platforms and partners drive the greatest impact or efficiency? Are there any partners we should be optimizing out of?
- Are we investing enough in upper funnel channels to maximize ROI?
- How can we understand the impact of adding new upper funnel channels or platforms into our media mix?
- What is the impact of our upper funnel advertising on driving repeat visits, upgrades, or additional purchases from existing customers
- What is the impact of [and how can we further optimize/refine] our promotional offers to drive incremental value
Incrementality test question formula
It can also be helpful to think of your incrementality test question as a simple formula:
“We want to understand the impact of [one or multiple channels or tactics] on [a given business metric].”
We’ve laid out a table below to help get you thinking. The options are almost limitless, and test structures can get ingeniously creative or complex, but as a basic example you might say, “we want to understand the impact of Connected TV on in-store sales.”
We’ve put together this list of potential test inputs that might help get you started. It’s by no means exhaustive and we’d love to hear what else you might add here.
| What to test? | Understanding the impact on |
| Channels
Partners & Platforms Target Audiences Tactics: tech (i.e. Smart Bidding or not) Spend allocation Beyond Media (e.g.Promotions or Messaging) |
Revenue
Sales Profit Store traffic In-store vs ecommerce sales New vs existing customers Awareness |
The time is now to make your move to incrementality measurement
Impact Navigator measures the real-world effectiveness, or incrementality, of a marketing tactic in the only place that matters: the real world, with real people, as part of a real marketing test measuring business responses that matter like revenue impact, client acquisition, and brand engagement. Leave the guesses and hunches to your competition, and speed ahead with your own growth strategy powered by real consumer insights.
“With Kenshoo Impact Navigator we can measure the real impact in the marketplace before starting significant investment, and focus on where there’s really incrementality.”
For more information or to see a brief demo of Impact Navigator, reach out today.
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