What is incremental lift?
If you close down your advertising campaign, customers might still make purchases. But how much more would they have made had the campaign been alive? This “more” is called incremental lift – what happens when all else is held constant and something changes in response to a stimulus.
Incrementality measurement lets you understand the true impact your marketing strategies have on a customer’s decision to purchase.
Why is incrementality testing important?
With incrementality testing done correctly, you can determine the effectiveness of your marketing campaigns and if an ad truly influenced conversions.
Understanding incrementality allows you to manage your budget by helping you allocate spend in the most effective way possible. Another benefit of measuring incrementality is that you can see which audience segments should receive increased spend and which should not.
Segments that show higher incremental lift are those that were more influenced by your marketing. Those with lower incremental lift were less influenced. By understanding each customer journey, marketers can better optimize where they spend their money.
How is it measured?
To determine true incremental lift, an audience is segmented to create a holdout or control group and receives no advertising. The other half of the group does receive advertising and the conversion rates are compared.
Understanding Incremental Lift Tests
Control vs. Exposed lift study.
A portion of your target audience receives an ad, while the other doesn’t.
How it’s done: To run a control vs. exposed lift study, the KPI you hope to measure is identified. Then two populations that have performed similarly historically with that KPI are found.
The test is then executed by either:
- Removing an existing factor that both groups have been exposed to.
- Adding a new factor to only one group and keeping all other factors the same.
The difference between these two groups would be your incremental lift.
At Popula Digital, we’ve also run two types of incremental lift studies: geo holdout tests and ghost bidding tests. Let’s break them down.
Geo Holdout Tests
These incrementality tests can reveal insights like:
- Do your ads contribute to revenue?
- Do you get the same results without spending more?
How it’s done: Geo holdout tests compare two geographies that have historically performed similarly. We either turn on or turn off the channel we’re testing in only one of those markets.
Then, we measure the difference between the two in the KPI we’re measuring (i.e., sales) during that time. Again, this is the incremental lift.
Ghost Bidding Tests
These tests reveal if your ads are effective at increasing conversion rates. It’s a cost-effective way to run a control group study.
How it’s done: Ghost bidding tests withhold an ad at the last minute, so it’s not served to an individual who would’ve normally seen it. The incremental lift is the difference between the users served an ad vs. those not served an ad.
Choosing the Right Lift Study
Using the right lift study helps you identify why your campaigns are successful and how to replicate them for future campaigns.
Determine Your Ultimate Goal
Your measurement decisions are guided by the goal you choose.
What is it you want to do?
You may want to focus your goals on increasing metrics like:
- Awareness
- Foot traffic
- Sales
- Trial rates
Your goal should be both realistic and measurable. Some of these will be easier to measure than others. If you select sales, you could measure lift by looking at how much revenue or the average order value has increased. However, measuring awareness might be a little more difficult. All your advertising efforts should contribute to your goals.
Executing a Lift Study
Understanding incremental lift requires a strict scientific method approach to determine direct cause and effect. The scientific method follows five main steps: Observe, hypothesize, test, implement and repeat.
Let’s look at each in more detail:
- Observe a desired outcome.
- Hypothesize the impact a stimulus will make.
- Test two randomly selected samples — one with the stimulus and the other without — then confirm or deny the hypothesis.
- Implement the results into strategic, budget or optimization decisions.
- Repeat since the quest for better results never ends.
Following each step will help you measure incremental lift accurately and repeat your results.
Embracing the Science of Marketing
For brands to be able to determine the effectiveness of a new message, channel, media type or launch it is essential to conduct incrementality tests and measure lift. This also helps you identify when campaigns are successful, pinpoint the factors that contribute to success and decide where to invest incremental funds.
Reach out to us to learn more about incrementality and measurement solutions. We can help you implement a lift study on your next campaign so you can clearly see the impact you’re making.