Marketing

Why Marketers Should Use Incrementality Testing Now – eCommerce Magazin

The question of whether a user has returned to an app thanks to certain marketing measures or whether he would not have returned for “organic” reasons is still a concern for e-commerce providers. A promising approach to address this problem with retargeting is the so-called Incrementality tests, i.e. the precise measurement of uplift versus organic traffic. The e-commerce industry has been the subject of intense discussion for around two years, and will experience a boom in the near future.

How retargeting affects conversions

So far, only large and progressive companies with the appropriate budgets and resources have been able to benefit from this technology, in which user groups are segmented. From the comparison, app marketing managers can deduce how certain people feel Marketing techniques, and in particular retargeting, have an impact on conversions. What sounds complicated and is indeed complex is now also feasible for small marketing teams: With new improved tools, they can easily carry out these tests themselves, which were previously reserved for data-driven companies with more resources.

How the incrementality measurement works

With incrementality, the actual value of marketing measures can be determined by measuring which conversions were achieved as a result of a marketing campaign and which of these conversions would also have taken place organically. To determine the incremental lift of a particular marketing channel or campaign, an experiment is conducted where the target audience is randomly drawn into Test and control groups is divided. The test group, which is typically 80 to 85 percent of the total audience, is exposed to the normal campaign and sees ads, while the control group is excluded from the campaign.

Remarketing: Splitting the audience into control and test groups

This allows advertisers to uncover the incremental impact of their marketing campaign or channel and measure the engagements that would have occurred without that specific investment. The CMO of an e-commerce provider will sooner or later ask the mobile marketing manager exactly this question with a view to his budget: How high is my ROI for the expenses that went into retargeting measures?

The answer can be clear Conversion rate does not deliver on its own, since this number has to be subtracted from how many users would have made a purchase within the app without marketing efforts. In order to give the CMO a precise and differentiated answer, the app marketing specialist in the company would first have to carry out an incrementality test. But this is a lengthy and complicated process that is prone to errors in execution and can be difficult to interpret.

Retargeting – campaigns carried out in parallel by marketing

Each parameter can affect the result: If the test group was relatively small, the control group may already be too small. The test is only “clean” if the selected group is not addressed at the same time by other retargeting campaigns run in parallel by Marketing. For example, it could be that the test only wants to examine the successes of a particular one Facebook campaign achieved. However, some of the users surveyed also happen to fall into one or more target groups for a further retargeting campaign, for example “Users who have installed the app in the last 90 days” – some of them also fall into the group “Users who are in the were inactive for the last 7 days ”.

Overlapping of measures is the rule here, not the exception, because brands often run several campaigns at the same time. The conditions for an incrementality test could be falsified from the start. Outliers within the groups also represent a challenge that must be calculated from the results. Even if there is great interest, hardly any advertiser has the appropriate in-house resources to apply the method of successfully integrating incremental testing into their workflows for campaign optimization and to use its meaningful findings.

The industry has now responded to the call for automation and integrable tools and provides solutions that greatly simplify the process – from design to execution and analysis. This allows marketers to focus on the ultimate goal of their test without worrying about how to do it.

Incrementality meets attribution

Attribution and incrementality are completely independent concepts that complement each other for a more effective mobile marketing strategy. They each have a separate function when it comes to providing a complete picture of the performance and real value of campaigns. If attribution is about measuring the overall performance of advertising campaigns and the resulting events in order to attribute campaign successes to the right channels (and to reward them appropriately for this), incrementality measurement answers another question about the effectiveness of individual, targeted measures and covers it on where budgets may have been wasted.

But both have the same goal: to measure, interpret and ultimately optimize the return on investment of campaign spending. If both are used in parallel, they form an integrated marketing measurement strategy in which the incrementality can be used to validate the hypotheses derived from the attribution. As the industry shifts towards an aggregated future, solutions that provide advanced insights into campaign management and optimization will inevitably play a bigger role in marketers’ decision-making processes. (sg)

AppsFlyer Jeger
Ben Jeger is Managing Director – Central Europe at AppsFlyer.

About the author: Ben Jeger is Managing Director Central Europe at AppsFlyer. The provider in the areas of mobile attribution and marketing analytics enables marketers to expand their mobile business on the basis of meaningful measurements and analysis solutions. AppsFlyer takes a customer-centric approach to helping 12,000+ brands and 7,000+ technology partners make better decisions every day.

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