The term "incrementality" in the context of advertising is being used frequently at the moment - but what is it? Simply put, incrementality refers to the lift in conversions or sales that can be attributed to a specific advertising campaign above what would have occurred naturally - i.e. the uplift above the “base”.
Although incrementality has been used recently for media, it has long been a term used in the world of CPG and promotions. This is where you need to determine the effectiveness of promotions over and above a baseline you would have got without the promotion. After a baseline level of sales is established, the additional uplift in sales can then be attributed to the promotion, and then you can work out the profit effectiveness of the promotion.
In the media world, the reason this has risen in importance recently is because not all media measurement solutions isolate the incremental uplift. For example, traditional Multi Touch Attribution often fails to separate out base (or what your conversions / sales you would have gotten anyway) from the uplift of the advertising campaign. This can lead to overstated results.
Market mix modelling (MMM) accurately measures incrementality as does Lift Testing. When using MTA or other Attribution results it is important to do this in conjunction with incremental techniques such as lift (RCTs, Geo-tests, etc) or market mix modeling (MMM) to ensure a true reflection on channel performance.
Accurately quantifying the incremental impact of Marketing means we have a better understanding of the true impact of advertising campaigns, move from ROAS to ROI. We then have the information required to discuss with Finance the effectiveness and efficiency of media and set the right budget to deliver against our objectives.
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