Six rules to abide by for incremental impact

Vincent Rebeix, global chief product and analytics officer, and Matt Mee, global chief strategy officer at EssenceMediacom, explain why a new approach is needed.

Incrementality is marvellous. It’s the number that tells you how many additional purchases a given channel can drive, conversions that simply wouldn’t have happened without that marketing tactic.

For a media agency, every incremental sale is a success story. It allows us to demonstrate how our planning and activation is driving client growth.

But it’s not always easy to identify which sales are truly incremental and which would have happened anyway. The truth is that, for too long, too many of us have conflated all digitally driven sales with incremental ones. Sometimes we’ve underplayed the cost of incremental sales by huge margins.

The fact is that just because someone clicks on an ad, doesn’t mean they wouldn’t have bought the product or service in any case.

Thanks to a deep dive into the science in conjunction with some of our biggest clients, we think it’s time to develop a new view of incrementality and a new approach to measuring and optimising these sales.

Digital performance thinking has evolved hugely but even as we’ve tracked more actions, we’re still predominantly reliant on the most recent media placement for attribution.

However, in its rush to reinvent the world, the digital advertising industry ignored one of the fundamental lessons, first learned in the 1980s: decades of analysis across multiple EssenceMediacom econometrics and media mix modelling (MMM) studies reveal that media activity rarely drives more than 20% of all conversions at any given time.

While many brands are trying to bring the greater accuracy of MMM into their decision-making processes by adding speed to its honesty, cross-channel, real-time incrementality data is only now starting to become a reality.

Our research highlights six rules for the way media can maximise performance and how we should think about incrementality:

1. Combine brand and performance, differently

We all know that brand and performance should go hand in hand. Running both together increases click-through rates while decreasing cost-per-action. This is true in the world of last click but may sometimes stem from a surge of non-incremental conversions. In a world of incrementality, when brand spend is up, you should not assume that performance spend should increase as well. Indeed, sometimes cutting the latter will lead to more cost-effective outcomes.

2. Pick the right incrementality metric

An incrementality percentage is one of the key data points in every conversion lift study. It’s a powerful number that can be compared across channels. In reality, the cost per incremental conversion is more important. A low incrementality channel with a low baseline may be worth your investment, but the opposite may not be.

3. Don’t jump to conclusions

A negative incrementality number does not necessarily imply that a channel or tactic is not incremental intrinsically. Incrementality measurement is a journey and you should make sure that you have multiple valid data points before you start making radical decisions.

4. The right messaging is vital

The messaging, context and audiences targeted are key factors driving campaign incrementality. No matter how good your planning is, if your offer is not designed to actively recruit waverers and competitor products, you will lose.

5. Do not allow the algorithm and "optimisation" to derail you

Most platform algorithms have been trained to maximise cheap conversion volume. AIs ruthlessly pursue the cheapest possible conversion and weed out audiences, contexts that are deemed to underperform in days, if not hours. The cheapest cost-per-click is very unlikely to be incremental. Do not attempt to optimise until you have consistent incrementality data.

6. Incrementality is just one part of the media effectiveness journey

Your incrementality journey will deliver more to your business if it is framed within a broader marketing effectiveness measurement plan that allows you to look at the contribution of each channel holistically. This will help contextualise and sense-check individual reads as well as help justify your overall marketing budgets to the organisation.

At a time when marketers are being challenged to drive more, demonstrable value from their budgets, rethinking incrementality represents far more than just another new measurement and optimisation approach.

It’s a paradigm shift in how we understand the value we deliver and a clear source of advantage for those that embrace it.

Vincent Rebeix (pictured above, right) is Global Chief Product and Analytics Officer and Matt Mee (pictured above, left) is Global Chief Strategy Officer at EssenceMediacom.

This article was originally published in Campaign Magazine UK on 15 June 2023 - a subscription is required to access.