Incrementality Is the Best Measure of Marketing Effectiveness

Incrementality

The move to digital promised marketers better feedback compared to traditional, offline media. But approximately 15 years into the transition, many marketers feel frustrated by a continued inability to see (with absolute certainty) which investments move the needle.

The bad news is, the most common methods of measuring effectiveness—media-mix modeling, multi-touch attribution, and panels—are flawed. 

  • The first suffers from a lack of granularity.
  • The second from a lack of accuracy. 
  • The third from a lack of scale. 

The good news is, there actually is a way for marketers to clearly see the lift they’re getting from their media spend: 

Incrementality. 

What is incrementality?  

Incrementality (or incremental measurement) is one of the newer ways to help marketers understand the true lift of their spend, and improve media planning. Moreover, it can be used to capture metrics associated with brand awareness, affinity and purchase intent. 

Similar to panel-based measurement, incrementality seeks to understand the incremental effect of exposing one set of people to a message versus another set of people who are not exposed to said message. 

The insights gained make it easier for marketers to shift precious dollars to the channels, campaigns, and messages that yield the best ROI.  

How does incrementality work? 

Incrementality seeks to evaluate the difference between the measured response rate of the exposed group (e.g., Group A) and the measured response rate from the non-exposed, control group (Group B).

Here’s an example…

Imagine your marketing team is running a campaign for Dr. Pepper. 

In the consumer market, there are a number of shoppers who faithfully purchase Dr. Pepper whenever they crave a soda. These “brand loyalists” might be exposed to the messaging of your marketing campaign, but that messaging holds no sway over their buying decision. In other words, these people are going to buy Dr. Pepper whether they see your marketing materials or not—they love Dr. Pepper, period.

From an ROI standpoint, marketing to these Dr. Pepper lovers is pointless. They don’t need to be persuaded to buy the product, they already have a case of Dr. Pepper in their shopping cart. Therefore, your marketing team doesn’t want to incorporate sales derived from this “loyalist” audience into its campaign evaluation process. What your marketing team wants to do is measure the incremental lift in sales generated by your campaign (the “extra” sales from “non-loyalists” who would not have purchased Dr. Pepper if not for the hard work of your marketing team).

By measuring the background conversion rate of shoppers not exposed to any of your marketing (Group B), you can better understand normal consumer purchasing behavior for Dr. Pepper. You can then compare that behavior to the behavior of shoppers who are exposed to your marketing (Group A). 

The difference in purchases between the marketed-to population (Group A) and the non-marketed-to population (Group B) is the true measure of performance for your marketing campaign.  

If you can demonstrate an incremental increase in purchases for the marketed-to population, you’ll know your campaign worked. But if you can’t demonstrate an incremental increase in purchases for the marketed-to population, you’ll know your campaign had no impact.  

What’s the drawback of incrementality? 

To ensure accuracy with incremental measurement, marketers must be able to access a large population of unexposed consumers to calculate a baseline. If relying on panels, these hold out segments can be difficult and costly to manage. 

For this reason, most marketers rely on a measurement partner capable of spreading the cost of data collection and analysis, in addition to providing a large, accurate data set. 

About Zeta

At Zeta, our closed-loop, AI-powered platform easily measures the true incremental lift from media spend, allowing marketers to make smarter, ROI-boosting decisions in real time. The benefit for our clients. By closing the gap between measurement and engagement, Zeta’s platform provides superior outcomes, and a better return on marketers’ media spend. Contact us directly to learn more.

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