Why Incrementality Is Key to Understanding Your Marketing

May 4, 2020

By Lin Pophal

Marketers are data-driven beings. Fortunately, many use digital marketing channels that can provide a very granular look at what’s working and what’s not. This is particularly true for app marketers who can leverage information related to which ads drove the most app adoption, where those ads may have been seen, how many times they may have been seen, which ad or offer drove the final action, what installs were organic and which stemmed from paid efforts, and much, much more.

But with all that data at your fingertips, it can still be hard to know what you don’t know. A measurement concept called incrementality is one way marketers critically evaluate their ad spends to better understand how campaigns are truly performing. Here we take a look at incrementality, what it is, how it's measured, and the key insights it can yield.

What is Incrementality?

More than just a buzzword, incrementality is the key to understanding your marketing results. Incrementality can help you quantify the actual cost of each incremental conversation. In other words, incrementality can help you understand whether you would have been better off just relying on organic reach to drive downloads or if your ad spend made an incremental difference that was worth the cost of those ads.

How to Measure Incrementality

While this may sound complicated, it doesn’t have to be. Keep in mind that the digital environment provides marketers with a ready-made way to track the actions of consumers as they interact with content. The process, in fact, can be very much like conducting a typical A/B split test—one that relied on an ad spend to encourage downloads and one that didn’t. Compare the results and calculate the value of any additional downloads that may have occurred through ad spend.

Then determine if that bump was worth the cost or if you would have been equally, or more, well-served by relying on organic traffic. This post explains the calculation process in more detail.

Learning Over Time

While measuring the incremental lift provided by ad spend for a single campaign can yield valuable insights, which can be even more valuable when monitored over time and across different campaigns. One data point from one A/B comparison provides you with some knowledge about whether your ad spend yielded worthwhile results. But once you have two, 10, 20, 30, 50, or more results you’re also able to glean some additional insights into which types of ads or offers had higher incrementality than others.

Incrementality doesn’t just answer the question of “what worked?”; it answers the question of “what worked best?” and over time, can also help you determine why.



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