Understanding the Basics of Incrementality
Today we are talking about what an incrementality measurement is. Learn how a data-driven approach to measuring Facebook campaigns can show the true marketing value of your business. Some companies use ads to introduce their brand – its benefits and distinguishing qualities that set them apart from other brands. Promoting a product or service can also move it on top of a prospect’s preference.
In addition, ads can help a company shape a positive perception in the eyes of consumers. Thus, building a trustworthy company reputation. Making people aware of the existence of a company, product, or service can be accomplished using ads. We know metrics are important, but what is this one?
What Is an Incrementality Measurement?
To be able to reach prospects across every channel, ads come with a cost. In fact, companies are spending about 7-8% of their gross annual revenue for advertising alone. Now, the question arises. Is spending 8% of gross annual revenue worth it? Did it produce a reasonable number of sales? Or did you just spend money only to have wasted it? This is where incrementality enters the picture.
Incrementality is a measurement that companies use to know the lift that advertising spend has provided to the sales, revenue, or conversion rate of the business. Calculating incrementality is extremely vital to any business because it can provide the assurance that marketing finances are spent wisely and paying off.
It’s normal for any business to take risks at times. And in every risk taken, there is always a chance that it will fail. Although a good outcome is always hoped for, especially if money is involved, there is always that chance where a strategy or a path taken is not as effective as anticipated. As a result, incrementality can lead an advertiser to decisions that can help advance the effectiveness of marketing spend. It prepares an advertiser by anticipating the specific varieties of errors or complications that may occur and have a plan of action when these complications do arise.
So how do your ads really perform? Although it sounds like a simple question, answering it will take evaluating. Incrementality offers a way to determine the success of a business strategy by comparing people who’ve been impacted by the strategy to those who haven’t. Therefore, it is a guide in making smarter decisions by understanding how and where marketing is contributing to business results.
Starting Something New
When decided to embrace this approach, ask this basic question: What business question do I want to answer and focus on? Then, be cautious about how you approach your goal and know how to gauge its success. Always keep in mind that systematic planning will ensure a smooth decision-making process especially when unforeseen circumstances arise along the way.
Learn And Grow
If a strategy fails or didn’t yield the result you have hoped for, don’t fret. Marketing mistakes are part of the learning process and is necessary for improvement. Choosing to adopt incrementality requires a change in belief in order to appreciate responsible learning. Things can and will go wrong despite how carefully a plan is executed. But when they do, take it positively and salvage as much valuable information that you can.
Alok Gupta, head of marketing at Lyft, once said “Investing in incrementality means that we believe that more robust measurement will make us, in the long run, a more efficient marketing business.”
An incrementality measurement may or not be for every business. At the end of it all, success is not all about numbers but rather on how much understanding has been gained for the future of the next marketing plans to be executed.