In today’s digital advertising landscape, understanding the real impact of your advertising efforts is crucial. Enter incrementality testing - a powerful tool that has revolutionized how marketers measure campaign effectiveness. At YouAppi, we've long championed the use of incrementality testing to help our clients optimize their mobile advertising strategies.

In this blog, learn how incrementality can transform your mobile marketing efforts.

The Evolution of Incrementality Testing

Initially used as a basic method to measure the lift in conversions or revenue, incrementality testing has now evolved into a sophisticated technique that provides granular insights into campaign performance.

Today, we can drill down to segment-level insights, allowing for more targeted and efficient ad spend. This has enabled marketers to:

  1. Identify high-performing user segments
  2. Allocate budget more effectively
  3. Tailor messaging to specific audience groups

Types of Incrementality Tests

There are three primary methodologies for conducting incrementality tests, each with its own advantages and considerations:

1. Intent-to-Treat (ITT)

ITT is the most basic form of incremental testing:

  • A treatment group receives ads while a control group does not
  • Analysis is based on attribution-level data rather than bid request or impression data
  • Operates at a high, overall audience level
  • Does not account for users in the test group who may not see an ad
  • Results in "noisy" data that is less concrete and more broad

2. Ghost Bids

This methodology offers a more refined approach:

  • Operates at the bid request level, providing access to user-level data
  • Allows segmentation within the target group
  • Separates users in the test group who do not see an impression or receive a bid request
  • Places invisible "ghost bids" on users in the control group
  • Creates an apples-to-apples comparison between exposed users in the test group and "would have been exposed" users in the control group
  • More cost-effective and efficient than other methods

3. Public Service Announcements (PSAs)

This approach serves real ads to both test and control groups:

  • Serves brand-related ads to the test group and PSAs to the control group
  • Creates an apples-to-apples testing environment by serving actual ads to both groups
  • Eliminates noisy data from unexposed users in the test group
  • Comes at an additional cost to advertisers for serving non-branded ads
  • May introduce bias due to differing content between branded ads and PSAs

Among these options, ghost bids offer the best balance of accuracy and cost-effectiveness. This method provides a clean comparison without the additional expense of serving PSAs, while still addressing the issue of noisy data present in the ITT approach.

The Data Significance Imperative

While incrementality testing offers powerful insights, the validity of these insights hinges on one critical factor: data significance. Without statistical significance, your incrementality test results are merely educated guesses.

Why Data Significance Matters

Data significance ensures that your test results are not due to random chance but represent a true effect of your advertising efforts. Here's why it's crucial:

  1. Confidence in Decision-Making: Statistically significant results give you the confidence to make informed marketing decisions.
  2. Avoiding False Positives: Without data significance, you might mistakenly attribute success to a campaign that had no real impact.
  3. Resource Optimization: By focusing on significant results, you can allocate resources more efficiently, avoiding wasted spend on ineffective strategies.

Achieving Data Significance

To ensure your incrementality tests yield significant results:

  1. Adequate Sample Size: Ensure your test and control groups are large enough to produce reliable results.
  2. Sufficient Test Duration: Run your tests for an appropriate length of time, typically at least 4-6 weeks
  1. Proper Segmentation: While segmentation is valuable, ensure each segment has enough data to produce significant results.
  2. Regular Monitoring: Continuously monitor your tests and adjust as needed to maintain significance.

Beyond Traditional Metrics: The Incrementality Testing Advantage

While traditional metrics like ROAS and CPA provide valuable insights, incrementality testing offers a deeper understanding of your marketing efforts.

Uncovering Hidden Value

Incrementality testing can reveal value that traditional metrics might miss:

  1. Long-Term Impact: Measure the extended effect of your campaigns beyond immediate conversions.
  2. Cross-Channel Influence: Understand how your mobile campaigns impact other marketing channels.
  3. Brand Lift: Quantify the less tangible but crucial impact on brand awareness and perception.

Optimizing for True Incremental Value

By focusing on incrementality, you can:

  1. Eliminate Wasteful Spend: Identify and cut campaigns that aren't driving true incremental value.
  2. Maximize Budget Efficiency: Allocate more resources to campaigns and segments that drive genuine incremental results.
  3. Refine Targeting Strategies: Use incrementality insights to fine-tune your audience targeting for maximum impact.

The Future of Incrementality Testing

As mobile marketing continues to evolve, so too will incrementality testing. Here's what we at YouAppi envision for the future:

  • AI-Powered Incrementality Analysis: Machine learning algorithms will enable real-time incrementality analysis, allowing for on-the-fly campaign optimizations.
  • Cross-Device Incrementality: As users increasingly move between devices, incrementality testing will evolve to provide a holistic view of campaign impact across all touchpoints.
  • Privacy-First Incrementality: With growing privacy concerns, incrementality testing methods will adapt to provide valuable insights while respecting user privacy.

Implementing Incrementality Testing: Best Practices

To make the most of incrementality testing in your mobile marketing strategy:

  1. Start with Clear Objectives: Define what you want to measure and why before designing your test.
  2. Choose the Right Methodology: Select the incrementality testing method that best suits your goals and resources.
  3. Ensure Clean Data: Rigorously clean your data to minimize noise and ensure accurate results.
  4. Analyze at Multiple Levels: Look at both campaign-level and segment-level results for a comprehensive understanding.
  5. Iterate and Improve: Use your incrementality insights to continuously refine your marketing strategy.

Takeaways

Incrementality testing is more than just a measurement tool - it's a mindset that can transform your approach to mobile marketing. By focusing on true incremental value, you can make more informed decisions, optimize your ad spend, and drive real business growth.

  • Types of Incrementality Tests:
    • Intent-to-Treat (ITT): Basic form, involves a treatment group receiving ads and a control group not receiving ads. Results can be noisy and less concrete.
    • Ghost Bids: Operates at the bid request level, providing user-level data and creating an apples-to-apples comparison. More cost-effective and efficient.
    • Public Service Announcements (PSAs): Serves real ads to both groups, eliminating noisy data but at an additional cost and potential bias.
  • Data Significance: Ensuring statistical significance is crucial for reliable incrementality test results. It helps in making informed decisions, avoiding false positives, and optimizing resources.
  • Achieving Data Significance:
    • Ensure adequate sample size.
    • Run tests for an appropriate duration (typically 4-6 weeks).
    • Properly segment data.
    • Regularly monitor and adjust tests.
  • Incrementality Best Practices:
    • Start with clear objectives.
    • Choose the right methodology.
    • Ensure clean data.
    • Analyze at multiple levels.
    • Iterate and improve continuously.

 

Get started today with YouAppi and discover how incrementality testing can elevate your mobile marketing efforts.