Guest Post by INCRMNTAL (www.incrmntal.com)
Incrementality is a term commonly used in Advertising lingo to represent sales results that would not have happened if it was not for the Advertising activities. The opposite to incrementality is cannibalization. Cannibalization stands for sales results attributed to advertising that would have happened if it was not for the advertising activities.
Incrementality measurement is a very popular approach marketers look for to determine the value of their advertising spend.
Incrementality measurement does not replace digital ad tracking and attribution. Tracking is used to count the number of impressions / clicks engaged by users, while attribution comes to give credit to a certain media vendor or campaign.
Attribution often conflicts with incrementality measurement, as attribution gives credit based on when and where an ad impression was seen, or engaged with, without any context.
Advertising has three primary objectives: to inform, to persuade, and to remind. Informative Advertising creates awareness of brands, products, services, and ideas. It announces new products and programs and can educate people about the attributes and benefits of new or established products.
David Ogilvy addressed the myth that “all advertising contribute to sales in some degree” in his book: “Ogilvy on Advertising”:
“The wrong advertising can actually reduce the sales of a product….it was found that consumption of a certain brand of beer was lower among people who remembered its advertising than those who did not. The brewer had spent millions of dollars on advertising which un-sold his beer”David Ogilvy
Making decisions based on real time attribution data caused many Advertisers to make wrong decisions. By allocating a majority of budget towards publishers and medias winning the attribution – Advertisers ignored the Top of the Funnel, ending up spending on traffic overlapping with organic conversions, thus, adding very little incremental value.
The equivalent was to operate a football team, employing only the “person that score the goals” as “well, that’s what the stats shows”
The holy grail of all advertising activities is to generate an incremental sales lift, or Incrementality. Incrementality measures the true effectiveness of Advertising activities regardless of tracking.
Continuous Incrementality Measurement
Incrementality measurement used to involve being forced to stop advertising campaigns in a country, compare what were the sales results with no advertising against the results with advertising on.
With advances in machine learning capabilities – data science can now use Causal Inference to perform continuous measurements without forcing the advertiser to stop their campaigns.
Causal Inference is an algorithmic process to draw conclusions about the causality of results in a multi-variant and noisy environment
The benefits of using causal inference in incrementality testing is that causal inference can process data regardless of where campaigns ran (i.e. digital, untrackable, and offline).
Incrementality measurement using causal inference can provide tactical recommendations, allowing marketers to utilize those in near real time.
Incrementality and Attribution Work Together
Incrementality measurement using causal inference requires a lot of data. Specifically – the data the advertiser is already using to make real-time decisions. Attribution provides this data, by giving credit to a source for generating the customer or a sale.
Incrementality seeks to attribute the value of the attribution data:
- Would the conversions happen at all if the advertising campaigns were not active?
- Are there external factors influencing the sales results and campaign performance?
- What value should be given to campaigns running across mediums that cannot be tracked (such as TV, Print, Radio, etc.)?
Incrementality measurement can answer these questions, providing with marketers the means to unlock the full potential of their budget.
INCRMNTAL is an incrementality measurement platform for advertisers. Powerful, flexible, and more than a bit geeky.
The platform provides marketers with the tools to uncover the causality behind their marketing activities.
The software identifies the incremental value of campaigns and traffic vendors, Isolate price changes that lead to no additional traffic, find marketing activities that cannibalize organic user base or across paid marketing.