What is Incrementality?

Incrementality measures the incremental effect or ‘ lift’ the advertising effort brings above the baseline conversion rate for a target population. Advertisers tend to already know who are most inclined to buy their product. With incrementality, the question becomes, what is the effect of the ads on that consumer above and beyond their purchase level without the advertising.

 This term has been around for ages but now, as the media industry expands its data capabilities, it has become a hot topic.  The proliferation of platforms and the expansion of all types of available datasets leave us with an embarrassment of riches … and a challenge. Which platform really added value and which dataset is best to measure that incrementality.

At a recent ARF meeting, ARF Leadership Lab speaker Rick Bruner, CEO/Co-Founder of Central Control and US Vice Chair of I-COM hosted a panel of media executives. To Bruner, incrementality “is the latest, and certainly greatest, buzzword in the history of advertising.” To research experts it involves randomized controlled trials (RCT) that connotes Return on Investment (ROI), by using trial and error. “That’s the formula for advertising success,” he explained.

For brands such as Walmart, incrementality is a must-know, as noted by the Director of Product at WalmartLabs, Vadim Tsemekhman, who stated, “Our Top Priority: Focus on finding ways to conduct scaled randomized controlled testing across every marketing channel.”

But RCT demands a degree of experimental risk where time and money are invested in a test that may not pay off. One way of conducting RCT experiments is through the use of “ghost ads” – not exposing likely consumers to an ad and then comparing their behavior to a group of those who were exposed. It is time consuming but will lead to a greater understanding of which platforms are really moving the needle for a brand campaign.

“My prediction is that, come Monday morning, everyone who reports ‘lift’ for advertising effect based on something other than RCT is suddenly going to be in the market for real RCT,” concluded Bruner.

This article first appeared in Cynopsis.