Incrementality Testing 101

Incrementality Testing 101

27 May 2024 |

Media and Advertising Industry

Whether driven by loss of signals that power traditional means or by evolving privacy protecting initiatives, marketing as an industry is facing changes in its ability to measure campaigns’ performance and impact. Jerome Velasquez, Product & Solutions Director, offers an Incrementality Testing 101 for marketers to not only maintain but better yet improve their capabilities for measuring performance and value.

Traditional options for measuring performance

Traditionally, marketing, particularly digital marketing efforts have been measured through attribution. As a solution, attribution captures as many touchpoints customers have with a brand as possible and assigns conversions that it has captured against these touchpoints based on set rules e.g. last click, linear, etc.

These traditional methodologies are anticipating substantial changes to their capabilities. Namely, the phase-out of cookies could mean limited data insights explaining which channels are effective, making it harder to measure performance and make strategic decisions. This is on top of general limitations of attribution when tracking offline and not web-based activity e.g. apps. Further changes will therefore make it more difficult for a multi-channel attribution model going forward. It becomes important then to understand alternatives and opportunities such as what is offered by incrementality testing.

Incremental value measurement

Incrementality testing offers an alternative, if not, an additional way of measuring accurate value. In marketing, incrementality testing is assessing the additional impact or value generated by a marketing campaign, beyond what would have occurred without the campaign. This testing is crucial for understanding the true effectiveness of marketing efforts and for making data-driven decisions on resource allocation and strategy optimization. This testing methodology isolates a single factor or variable of a campaign e.g. a particular message, a new channel, or a specific campaign.

It is important to note that testing for incrementality is not just about looking for a positive lift or additional value. More accurately it is about measuring the impact of a campaign variable. This may in fact mean a ‘negative lift’ or depreciation of overall value when this factor is introduced in a campaign. For example, additional retargeting channels may cannibalise existing activity, or paid spend against keywords that are effectively captured traffic organically. Testing for negative and neutral impact is a unique capability for incrementality testing that is not available for traditional means such as attribution which solely focuses on assigning value.

Benefits of incrementality testing

Incrementality testing offers numerous benefits for marketing, providing clear and actionable insights into the effectiveness of campaigns. Here are the key benefits:

  • Clear and accurate ROI measurement – By identifying which marketing efforts generate genuine incremental value, marketers can allocate budgets more effectively
  • Wastage minimisation and campaign optimisation – by isolating factors that drive value, we can apply continuous improvement to the campaign through redirecting budget with confidence
  • Customer insights – beyond managing the marketing mix, incrementality tests provide insights to audience behaviour in relation to the brand
    Reliable and replicable framework – the scientific methodology is applicable across different variables we would like to isolate and test

We believe that incrementality testing is an effective tool that can at the very least supplement your existing measurement framework and provide meaningful insight for adding value into our campaigns. Get in touch with an ADMATICian today to understand how we can help you get started with incrementality tests..