Incrementality testing in digital advertising measures the true impact of ad campaigns by comparing the behavior of users exposed to ads versus those who were not.
This helps you understand whether your ads are actually driving additional conversions or if those conversions would have occurred anyway.
From analytics companies to previously undervalued prospecting campaigns, incrementality testing benefits a range of people, campaign types and ad formats (we’ll call them the winners) and exposes bad actors and previously over-valued campaign types (we’ll call them the losers).
Let’s peel back the curtain.
Winners of incrementality testing
Advertisers with effective campaigns
Companies that run effective upper- or lower-funnel ad campaigns stand to benefit the most from incrementality testing.
If their ads are genuinely driving incremental influence and/or conversions, these companies will be able to prove their value further and increase their marketing budget as a result.
Data analytics companies
Incrementality testing relies heavily on sophisticated data analysis techniques to accurately measure the impact of advertising.
Those offering such services can capitalize on the growing demand for reliable measurement methods, such as geo-lift testing and media mix modeling.
Platforms with transparent attribution models
Platforms that offer transparent attribution models and robust measurement tools stand to gain.
Advertisers are increasingly seeking platforms that provide clear insights into the effectiveness of their ads, and platforms that can offer reliable incrementality testing capabilities will attract more advertisers.
Advertisers running cross-channel campaigns
Campaigns that run across multiple channels, such as social media, search, display and email, can benefit from incrementality testing to assess the overall impact of advertising across the entire customer journey.
While measuring the incrementality of single-channel campaigns can be valuable, understanding how different channels contribute to conversions and whether they drive incremental lift helps advertisers allocate their budgets more effectively across channels.
Advertisers running new product launches or promotions
When introducing a new product or running a promotional campaign, advertisers often want to know if their ads drive incremental sales or if customers would have purchased the product anyway.
Incrementality testing provides valuable insights into the effectiveness of these campaigns, allowing advertisers to optimize their messaging and targeting to maximize impact.
Losers of incrementality testing
Ad fraudsters
Incrementality testing poses a significant threat to ad fraudsters who engage in activities like click fraud or fake impressions.
As advertisers become more adept at measuring the true impact of their ads, they are likely to shift their budgets away from channels with high levels of fraud.
Platforms with poor measurement capabilities
Platforms that lack robust measurement capabilities and transparency in their attribution models may lose out.
With advertisers becoming more discerning about where they allocate their ad budgets, platforms that cannot provide accurate insights into campaign performance may see a decline in advertiser trust and investment.
Traditional advertising models
Incrementality testing often challenges traditional advertising models that rely on last-click attribution or other simplistic measurement approaches.
As more advertisers demand more sophisticated methods for evaluating ad effectiveness, traditional models that cannot adapt may become less relevant in digital advertising.
Dig deeper: Efficiency vs. volume in PPC: 4 tips to strike a balance in incremental conversions
Prospecting vs. remarketing campaigns
From an incrementality standpoint, the valuation of prospecting and remarketing campaigns can vary based on their ability to drive incremental conversions and engagement.
Here’s a general assessment of which types of campaigns are typically undervalued or overvalued:
Undervalued
Prospecting campaigns
- These campaigns target new audiences who have not previously interacted with the brand, aiming to expand brand awareness and reach potential customers who may be in the early stages of the purchase funnel.
- While prospecting campaigns may not always result in immediate conversions, they are crucial in driving incremental brand exposure, audience growth and consideration over time.
Upper-funnel campaigns
- These campaigns, which include prospecting campaigns focused on brand awareness and consideration, may not always lead to immediate conversions.
- Still, they contribute to building brand equity, fostering customer relationships and influencing purchase decisions down the line.
Overvalued
Remarketing campaigns
- While remarketing campaigns target users who have previously interacted with the brand or visited its website, their incremental impact may be limited compared to prospecting campaigns.
- In some cases, remarketing ads may simply remind users who would have converted anyway rather than driving truly incremental conversions.
Down-funnel campaigns
- These include remarketing campaigns focused on driving conversions and sales.
- While they may achieve immediate results in terms of conversions, their incremental impact on overall revenue and customer acquisition may be less significant compared to upper-funnel campaigns that focus on building brand awareness and consideration.
You should carefully evaluate the incrementality of prospecting and remarketing campaigns based on your specific objectives, target audience and desired outcomes.
By understanding the true incremental impact of each type of campaign, you can optimize your advertising strategies to maximize ROI and effectiveness.
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Different ad formats
The value of different ad formats can vary based on their ability to drive incremental conversions, engagement and brand lift.
Here’s a general assessment of which ad formats are typically undervalued or overvalued:
Undervalued
Native ads
- They blend seamlessly with the surrounding content, making them less intrusive and more likely to drive incremental engagement and conversions than traditional display ads.
- You’ll want to test this and draw your own conclusions.
Interstitial ads
- Interstitial ads, which appear between content transitions, may be perceived as interruptive.
- However, they have the potential to capture users’ attention during natural breaks in their browsing or app usage, driving incremental clicks and conversions.
In-app ads
- These ads offer opportunities to reach users in a highly engaged environment.
- Users spend a significant amount of time within mobile apps, and ads displayed within these apps can effectively drive incremental actions and conversions.
Overvalued
Search ads
- Paid search ads typically capture users actively searching for a specific product or service.
- While search ads can drive conversions, particularly for high-intent queries, their incremental impact may be limited compared to other ad formats that target users earlier in the purchase funnel.
- There’s also a big difference in the incrementality of brand search ads and non-brand search ads, which I’ll explore in a minute.
Social media ads
- These ads may reach a large audience, but the incremental impact on conversions and revenue may vary depending on factors such as ad targeting, messaging and creative.
Rich media ads
- Ads with interactive elements, such as video, audio and animations, may offer a visually appealing ad experience.
- However, their incremental impact on conversions and brand lift may not always justify the additional investment compared to simpler ad formats.
Evaluate the incrementality of different ad formats based on specific campaign objectives, target audiences and desired outcomes. You should test various ad formats and make your own calls.
Dig deeper: Search incrementality: How paid and organic work together for better performance
Brand search vs. non-brand search
The value of prospecting and remarketing campaigns can vary based on their ability to drive incremental conversions and engagement.
Here’s a general assessment of which types of campaigns are typically undervalued or overvalued:
Undervalued
Non-brand search campaigns
- These campaigns target generic or industry-related keywords that do not include the advertiser’s brand name, aiming to capture users who are in the consideration or research phase of the buying journey.
- While non-brand search campaigns may not always lead to immediate conversions, they are vital in driving incremental brand exposure, audience growth and consideration over time.
Overvalued
Brand search campaigns
- These campaigns target keywords directly related to the advertiser’s brand name or branded products/services, aiming to capture users who are already familiar with the brand or actively searching for specific products or services offered by the brand.
- While brand search campaigns may achieve immediate results in terms of conversions, their incremental impact on overall revenue and customer acquisition may be less significant compared to non-brand search campaigns that target new audiences and drive consideration.
Studying incrementality often reveals that non-brand search campaigns have a bigger impact than our clients realize, while brand search incrementality is less impressive than traditional performance metrics suggest.
Incrementality testing for digital advertising: A long-term play
Learning incrementality testing is a long-term play that will work today.
Make it a priority to add to your measurement toolkit so you’ll be ready whenever Google decides to pull the plug on cookies once and for all.
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