Imagine this: you just launched your latest campaign and it was a major success.
You blew last month’s results out of the water.
You combined a variety of tactics, channels and ad creatives to make it work.
Now, it’s time to build the next campaign.
The only issue?
You don’t know what made it successful or how much your recent efforts impacted the results.
You’ve been building your brand for years. You’ve built up a variety of marketing pillars that are working for you. So, how do you know how much of your campaign is from years of effort or a new tactic you just implemented?
The key is incrementality.
This is a way to properly attribute the right weight to your marketing tactics.
In this article, we break down what incrementality is in marketing, how it differs from traditional attribution and how you can calculate and track it to grow your business.
What is incrementality in marketing?
Incrementality in marketing is growth that can be directly credited to a marketing effort above and beyond the success of the branding.
It looks at how much a specific tactic positively impacted a campaign on top of overall branding and marketing strategies.
For example, this could be how much a specific tactic, campaign or channel helped increase conversions, email sign-ups or organic traffic.
The primary purpose of incrementally in marketing is to more accurately determine the impact a single marketing variable had on the success of a project.
It removes every other factor and isolates the specific method to help marketers double down on that strategy or move on to new tactics.
With Matomo, you can track conversions simply. With our last non-direct channel attribution system, you’ll be able to quickly see what channels are converting (and which aren’t) so you can gain insights into incrementality.
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How incrementality differs from attribution
In marketing and advertising, it’s crucial to understand what tactics and activities drive growth.
Incrementality and attribution help marketers and business owners understand what efforts impact their results.
But they’re not the same.
Here’s how they differ:
Incrementality explained
Incrementality measures how much a specific marketing campaign or activity drives additional sales or growth.
Simply put, it’s analysing the difference between having never implemented the campaign (or tactic or channel) in the first place versus the impact of the activity.
In other words, how much revenue would you have generated this month without campaign A?
And how much additional revenue did you generate directly due to campaign A?
The reality is that dozens of factors impact revenue and growth.
You aren’t just pouring your marketing into one specific channel or campaign at a time.
Chances are, you’ve got your hands on several marketing initiatives like SEO, PPC, organic social media, paid search, email marketing and more.
Beyond that, you’ve built a brand with a not-so-tangible impact on your recurring revenue.
So, the question is, if you took away your new campaign, would you still be generating the same amount of revenue?
And, if you add in that campaign, how much additional revenue and growth did it directly create?
That is incrementality. It’s how much a campaign went above and beyond to add new revenue that wouldn’t have been there otherwise.
So, how does attribution play into all of this?
Attribution explained
Attribution is simply the process of assigning credit for a conversion to a particular marketing touchpoint.
While incrementality is about narrowing down the overall revenue impact from a particular campaign, attribution seeks to point to a specific channel to attribute a sale.
For example, in any given marketing campaign, you have a few marketing tactics.
Let’s say you’re launching a limited-time product.
You might have:
- Paid ads via Facebook and Instagram
- A blog post sharing how the product works
- Organic social media posts on Instagram and TikTok
- Email waitlist campaign building excitement around the upcoming product
- SMS campaigns to share a limited-time discount
So, when the time comes for the sale launch, and you generate $30,000 in revenue, what channel gets the credit?
Do you give credit to the paid ads on Facebook? What about Instagram? They got people to follow you and got them on the email waitlist.
Do you give credit to email for reminding people of the upcoming sale? What about your social media posts that reminded people there?
Or do you credit your SMS campaign that shared a limited-time discount?
Which channel is responsible for the sale?
This is what attribution is all about.
It’s about giving credit where credit is due.
The reason you want to attribute credit? So you know what’s working and can double down your efforts on the high-impact marketing activities and channels.
Leveraging incrementality and attribution together
Incrementality and attribution aren’t competing methods of analysing what’s working.
They’re complementary to one another and go hand in hand.
You can (and should) use attribution and incrementality in your marketing to help understand what activities, campaigns and channels are making the biggest incremental impact on your business growth.
Why it’s important to measure incrementality
Incrementality is crucial to measure if you want to pour your time, money and effort into the right marketing channels and tactics.
Here are a few reasons why you need to measure incrementality if you want to be successful with your marketing and grow your business:
1. Accurate data
If you want to be an effective marketer, you need to be accurate.
You can’t blindly start marketing campaigns in hopes that you will sell many products or services.
That’s not how it works.
Sure, you’ll probably make some sales here and there. But to truly be effective with your work, you must measure your activities and channels correctly.
Incrementality helps you see how each channel, tactic or campaign made a difference in your marketing.
Matomo gives you 100% accurate data on your website activities. Unlike Google Analytics, we don’t use data sampling which limits how much data is analysed.
2. Helps you to best determine the right tactics for success
How can you plan your marketing strategy if you don’t know what’s working?
Think about it.
You’ll be blindly sailing the seas without a compass telling you where to go.
Measuring incrementality in your marketing tactics and channels helps you understand the best tactics.
It shows you what’s moving the needle (and what’s not).
Once you can see the most impactful tactics and channels, you can forge future campaigns that you know will work.
3. Allows you to get the most out of your marketing budget
Since incrementality sheds light on what’s moving your business forward, you can confidently implement your efforts on the right tactics and channels.
Guess what happens when you start doubling down on the most impactful activities?
You start increasing revenue, decreasing ad spend and getting a higher return on investment.
The result is that you will get more out of your marketing budget.
Not only will you boost revenue, but you’ll also be able to boost profit margins since you’re not wasting money on ineffective tactics.
4. Increase traffic
When you see what’s truly working in your business, you can figure out what channels and tactics you should be working.
Incrementality helps you understand not only what your best revenue tactics are but also what channels and campaigns are bringing in the most traffic.
When you can increase traffic, you can increase your overall marketing impact.
5. Increase revenue
Finally, with increased traffic, the inevitable result is more conversions.
More conversions mean more revenue.
Incrementality gives you a vision of the tactics and channels that are converting the best.
If you can see that your SMS campaigns are driving the best ROI, then you know that you’ll grow your revenue by pouring more into acquiring SMS leads.
By calculating incrementality regularly, you can rest assured that you’re only investing time and money into the most impactful activities in terms of revenue generation.
How to calculate and test incrementality in marketing
Now that you understand how incrementality works and why it’s important to calculate, the question is:
How do you calculate and conduct incrementality tests?
Given the ever-changing marketing landscape, it’s crucial to understand how to calculate and test incrementally in your business.
If you’re not sure how incrementality testing works, then follow these simple steps:
Your first step to get an incrementality measurement is to conduct what’s referred to as a “holdout test.”
It’s not a robust test, but it’s an easy way to get the ball rolling with incrementality.
Here’s how it works:
- Choose your target audience.
With Matomo’s segmentation feature, you can get pretty specific with your target audience, such as:
- Visitors from the UK
- Returning visitors
- Mobile users
- Visitors who clicked on a specific ad
- Split your audience into two groups:
- Control group (60% of the segment)
- Test group (40% of the segment)
- Target the control group with your marketing tactic (the simpler the tactic, the better).
- Target the test group with a different marketing tactic.
- Analyse the results. The difference between the control and test groups is the incremental lift in results. The new marketing tactic is either more effective or not.
- Repeat the test with a new control group (with an updated tactic) and a new test group (with a new tactic).
Matomo can help you analyse the results of your campaigns in our Goals feature. Set up business objectives so you can easily track different goals like conversions.
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Here’s an example of how this incrementality testing could look in real life.
Imagine a fitness retailer wants to start showing Facebook ads in their marketing mix.
The marketing manager decided to conduct a holdout test. If we match our example below with the steps above, this is how the holdout test might look.
- They choose people who’ve purchased free weights in the past as their target audience (see how that segmentation works?).
- They split this segment into a control group and a test group.
- For this test, they direct their regular marketing campaign to the control group (60% of the segment). The campaign includes promoting a 20% off sale on organic social media posts, email marketing, and SMS.
- They direct their regular marketing campaign plus Facebook ads to the test group (40% of the segment).
- They ran the campaign for three weeks with the goal for sale conversions and noticed:
- The control group had a 1.5% conversion rate.
- The test group (with Facebook ads) had a 2.1% conversion rate.
- In this scenario, they could see the group who saw the Facebook ads convert better.
- They created the following formula to measure the incremental lift of the Facebook ads:
- The control group had a 1.5% conversion rate.
- Here’s how the calculation works out: (2.1% – 1.5%) / 1.5% = 40%
The Facebook ads had a positive 40% incremental lift in conversions during the sale.
Incrementality testing isn’t a one-and-done process, though.
While this first test is a great sign for the marketing manager, it doesn’t mean they should immediately throw all their money into Facebook ads.
They should continue conducting tests to verify the initial test.
Use Matomo to track incrementality today
Incrementality can give you insights into exactly what’s working in your marketing (and what’s not) so you can design proven strategies to grow your business.
If you want more help tracking your marketing efforts, try Matomo today.
Our web analytics and behaviour analytics platform gives you firsthand data on your website visitors you can use to craft effective marketing strategies.
Matomo provides 100% accurate data. Unlike other major web analytics platforms, we don’t do data sampling. What you see is what’s really going on in your website. That way, you can make more informed decisions for better results.
At Matomo, we take privacy very seriously and include several advanced privacy protections to ensure you are in full control.
As a fully compliant web analytics solution, we’re fully compliant with some of the world’s strictest privacy regulations like GDPR. With Matomo, you get peace of mind knowing you can make data-driven decisions while also being compliant.
If you’re ready to launch a data-driven marketing strategy today and grow your business, get started with our 21-day free trial now. No credit card required.
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