If you’ve been working in the performance marketing space in the last few years, it would be hard to believe you haven’t heard of incrementality testing until today. It’s a massive buzzword (like AI) and can be difficult to execute unless you have a larger number of resources. Additionally, people are typically vague on what incrementality testing is so we are going to demystify it for you.    

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What is incrementality?

Measures the actual impact of a channel or strategy on a site's sales by evaluating a holdout compared to control. If the control that is seeing your ads performs 20% better than the holdout that is seeing no media, then your media is only driving 20% of the impact that you are reporting out on in your account. In a perfect world, every ad dollar would directly create a sale that wouldn’t have happened otherwise. It’s not realistic, but it’s the hope.

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Why should you set up incrementality testing?

It allows you to see channels that are driving sales that are either over-reported or under-reported and properly re-allocate budgets. 

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Here are the steps we recommend to get an incrementality study setup: 

1. Determine what you want to measure. Often top of funnel spend or hard-to-track channels like TikTok are where people will focus their efforts with this testing. 
2. Create the test design. For example, promote a specific product on Tiktok that isn’t generally that popular. Holdout 5 DMAs and measure site performance on that specific product at the DMA level and compare the 5 held out regions vs 5 similar regions that were included in the ads & determine the delta. 
3. Perform a K-Means Analysis. Here is a video on how to do this. 
4. Setup the holdout on your test & run the test for at least 4 weeks.
5. Evaluate the data based on the test design. 

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Any Brand Can Run This!

There are a lot of tools pitching Incrementality tools and they are great at automated incrementality testing. If you are interested in doing this yourself in house, we’d encourage you to try! 

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But… 

If you feel like you still need a hand with this, we’re happy to help design and execute on incrementality testing.

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