Incrementality: The Key to Unlocking Marketing Effectiveness – Advertising Week

By Divya Dhaliwal, Manager, Marketing Sciences, Mindshare North America

With consumer behavior continuing to evolve and a media landscape with high levels of fragmentation, the desire to understand effectiveness has become top priority for marketers across the industry. If I had a dollar for every time I’ve heard the question “Did my campaign cause the consumer to convert?”, I’m sure I’d be well on my way towards retirement.

In any case, I know this is something we as marketers are often asked and yesterday’s Advertising Week seminar (which featured Booking.com, eBay, Lyft, Facebook, and AdExchanger) really dove deeper into how we could go about answering such a question. Incrementality is a means to drive that understanding through measurement. It provides a solid basis for understanding how many conversions were caused by a given marketing initiative. Furthermore, it’s the measurement of how much business a brand gets when it spends money on advertising relative to how much it gets when it doesn’t spend money on advertising (we can parse this out at a campaign and platform level as well).

Below are two key pieces of value that incrementality measurement provide to us marketers, if implemented correctly:

  1. A clear understanding of ROI caused by a given campaign and/or across platforms
  2. Awareness of attributes that lead to success for a campaign that can be carried on as learnings that inform future campaigns

Putting incrementality into practice also allows the evaluation of different measurement methodologies and attribution models (i.e. last touch vs MTA). And further, it allows us to understand that often different methods lead to different results, while some even misinform us. Knowing that, it’s evident that incrementality measurement is a powerful tool. However, as with most things digital, the devil lies in the details. Here are a few things to keep in mind when evaluating whether to assimilate incrementality into the advertising decision process:

  • Instill a data curious culture within the company: This and the following point marry together very nicely. Throughout the company culture, it’s imperative that people are interested in the “why” being insights and findings. But it doesn’t stop there; the learnings gleaned must be actionable. There must be a companywide commitment to measurement and optimization.
  • Executive Buy-In: Successful digital-first brands like eBay and Lyft have been A/B testing nearly every aspect of their business since conception. They have been able to make the “test and learn” mentality sustainable throughout their culture largely due to senior leadership encouraging and supporting it.
  • Talent Acquisition: To thrive and survive in a fragmented digital world, there is a need for talent with expertise in A/B testing who can glean insights from a scientific approach, leveraging data. Bringing in the right people doesn’t only mean having those who understand the technicalities of such testing, but it also requires cross collaboration from strategy to measurement in the form of a feedback loop, allowing responsible learnings to happen frequently.
  • Tight Hypothesis: It’s crucial to know exactly what effect you are trying to capture in measurement and have well-defined hypotheses and parameters set in place.
  • Cycle of Continuous Experimentation: Historically we’ve looked at testing and experiments very discretely, but to make sense of the fragmentation of the digital world at large and to capture the right insights from all the demand signals consumers are sharing with us, it’s imperative that we not only ask more questions about consumers, but we test them more frequently. Fail fast, and often so that we can be iterative in our approach to marketing.

But why does this all matter to us marketers? Incremental measurement is scalable and fact-based. As we find budget constraints that tie us to what we can and cannot measure within our campaigns, this form of testing allows us to glean fast, responsible learnings through a test and learn mindset. As the industry shifts towards a consumer centric approach to marketing, where personalization is king, it’s critical to ensure that we as marketers revamp our mindset to be continuous learners. Leveraging the right talent, being data curious, and continuously experimenting are the key attributes that will help us effectively respond to consumer demands and meet their needs in real-time. And this is merely the beginning!