Examining the Outcome of Incrementality Testing in Advertising: Identifying the Beneficiaries and Those at a Disadvantage
In the world of digital advertising, it is crucial for advertisers to understand the true impact of their ad campaigns. This is where incrementality testing comes in. By comparing the behavior of users exposed to ads versus those who were not, incrementality testing measures the actual influence of ads and helps determine whether they are driving additional conversions or if those conversions would have occurred anyway.
Not all campaigns and ad formats are created equal when it comes to incrementality testing. There are winners and losers in this game, and it’s time to peel back the curtain and take a closer look.
The Winners of Incrementality Testing
1. 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 truly driving incremental influence and conversions, they can prove their value further and increase their marketing budget as a result.
2. Data Analytics Companies: Incrementality testing relies heavily on sophisticated data analysis techniques. Companies offering such services can capitalize on the growing demand for reliable measurement methods, such as geo-lift testing and media mix modeling.
3. Platforms with Transparent Attribution Models: Advertisers are increasingly seeking platforms that provide clear insights into the effectiveness of their ads. Platforms that offer reliable incrementality testing capabilities will attract more advertisers.
4. Advertisers Running Cross-Channel Campaigns: Understanding how different channels contribute to conversions and whether they drive incremental lift helps advertisers allocate their budgets more effectively across channels.
5. Advertisers Running New Product Launches or Promotions: Incrementality testing provides valuable insights into the effectiveness of these campaigns, allowing advertisers to optimize their messaging and targeting to maximize impact.
The Losers of Incrementality Testing
1. 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.
2. Platforms with Poor Measurement Capabilities: Platforms that lack robust measurement capabilities and transparency in their attribution models may lose out. Advertisers are becoming more discerning about where they allocate their ad budgets, and platforms that cannot provide accurate insights into campaign performance may see a decline in advertiser trust and investment.
3. 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.
Prospecting vs. Remarketing Campaigns
When it comes to incrementality testing, the valuation of prospecting and remarketing campaigns can vary. Prospecting campaigns, which target new audiences who have not previously interacted with the brand, are often undervalued. While they may not always result in immediate conversions, they are crucial in driving incremental brand exposure and consideration over time.
On the other hand, remarketing campaigns, which target users who have previously interacted with the brand, may be overvalued. In some cases, remarketing ads may simply remind users who would have converted anyway rather than driving truly incremental conversions.
Advertisers should carefully evaluate the incrementality of prospecting and remarketing campaigns based on their specific objectives, target audience, and desired outcomes. Understanding the true incremental impact of each type of campaign allows advertisers to optimize their advertising strategies to maximize ROI and effectiveness.
Different Ad Formats
The value of different ad formats can also vary based on their ability to drive incremental conversions, engagement, and brand lift. Native ads, which blend seamlessly with the surrounding content, are often undervalued. They are less intrusive and more likely to drive incremental engagement and conversions than traditional display ads.
Interstitial ads, which appear between content transitions, may be perceived as interruptive, but 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 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.
On the other hand, search ads and social media ads may be overvalued when it comes to incrementality. While search ads can drive conversions, their incremental impact may be limited compared to other ad formats that target users earlier in the purchase funnel. Similarly, social media ads may reach a large audience, but their incremental impact on conversions and revenue may vary depending on factors such as ad targeting, messaging, and creative.
Advertisers should evaluate the incrementality of different ad formats based on their specific campaign objectives, target audiences, and desired outcomes. Testing various ad formats is crucial to making informed decisions.
Brand Search vs. Non-Brand Search
The value of prospecting and remarketing campaigns can also vary based on brand search versus non-brand search. Non-brand search campaigns, which target generic or industry-related keywords that do not include the advertiser’s brand name, are often undervalued. They capture users in the consideration or research phase of the buying journey and drive incremental brand exposure and consideration over time.
On the other hand, brand search campaigns, which target keywords directly related to the advertiser’s brand name or branded products/services, may be overvalued. 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 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 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 and in the future. It is essential to add it to your measurement toolkit to be ready whenever changes like the phasing out of cookies occur.
By understanding the winners and losers of incrementality testing, advertisers can make more informed decisions about their ad campaigns and optimize their strategies to maximize effectiveness and ROI. Evaluating the incrementality of different campaign types and ad formats is crucial in allocating budgets effectively and driving incremental conversions. It’s time to take advantage of incrementality testing and unlock the true impact of your ad campaigns.
