In the app retargeting space, we often talk about how incrementality can help your brand stay on track with its goals. But, did you know incrementality testing can help your brand save costs too? In today’s economic climate, with rising inflation and tightening budgets, incrementality can also be a cost-effective way to weather increasingly uncertain LTV curves.
Below, learn how you can use incrementality to meet your goals and save your brand money at the same time.
What is incrementality testing?
Incrementality, or incremental lift, is a key metric for understanding the value of your retargeting campaigns in your overall marketing strategy. Our team has written much about the basics of incrementality in the past, including how to run an effective incrementality test and why it’s the best metric for evaluating campaign success.
There are a range of different ways to measure campaign incrementality in DSP mobile advertising. We’ve written extensively about each methodology and the pros and cons of each. The one common denominator between all incrementality testing methodologies is the use of randomized control trials (RCT). Under this principle a holdout or control group is determined and tested alongside a treatment group to calculate the relative lift.
Here’s a quick rundown of the three most common types of incremental lift testing:
Intent-to-treat (ITT)
The most basic form of incremental testing, ITT lift analysis, serves an ad to a treatment group and does not serve an ad to a control group. The differing response of each group provides the lift analysis. This methodology does not control for “noisy” data, or meaningless information that comes from the unexposed population of the treatment group.
Ghost bids
The ghost bid methodology goes a step further than ITT by testing incrementality at the bid request level. This methodology places bids on users in the test group and places invisible bids on users in the control group. This solves the noisy data that can result from the unexposed users in the test group mentioned in the ITT methodology above. Because ghost bids resolve the noisy data issue without adding extra costs in the process, we recommend our partners at YouAppi to take advantage of this methodology.
{For more information on why ghost bids are the most cost efficient and effective incrementality testing methodology, read our blog here.}
PSA ads
In the PSA ad methodology real ads are served to both the test and control groups. In other words, a random selection of the test group receives a brand-related ad and a random selection of users in the control group receive a public service announcement (PSA) . While PSA ads solve the noisy data challenge by creating a clean apples-to-apples testing environment, they can be costly to mobile advertisers since they have to pay to serve non-branded ads.
The value of incrementality testing in today’s mobile landscape
Understanding the specifics of how your ad spend affects your campaign revenue is critical to allocating your mobile marketing budget effectively. This is where tools like attribution and incrementality can help mobile advertisers better balance their budget. But, while attribution is easy to implement, it misses the mark when it comes to attributing the value of organic and ‘immeasurable’ aspects of your marketing efforts including brand equity, offline marketing, and word of mouth. This is one of the reasons why a robust mobile marketing campaign is not complete without incrementality measurement. Since both the control and treatment group are affected by organic growth and other marketing activities, these ‘immeasurable’ effects are also accounted for.
Furthermore, since the deprecation of the IDFA, the granularity of multitouch attribution has taken a hit. User-level data is harder to come by, and therefore so is the ability to tie impressions to conversions to understand where your performance is coming from. Again, this is where incrementality testing emerges as a powerful tool to fill in the gaps.
Prove the value of your retargeting campaigns
Incrementality testing can help you assess the true value of your campaigns. This is especially valuable when it comes to understanding campaign cannibalization; e.g. whether your campaigns are double counting organic conversions that would have happened despite your paid efforts. With incrementality testing, you can understand which campaigns were most effective and generated the most revenue. These insights can help you realign your retargeting KPIs and generate more value as a result.
Cut costs, not quality
When you can zero in on exactly the channels and strategies that are driving campaign lift, you can balance your budget better. According to data from AdExchanger, mobile advertisers that adopt incrementality into their campaign measurement can cut their ad spend by 30% while still growing sales.
Takeaways
It’s hard to argue against the benefits of incrementality testing. Not only is it the most accurate way to prove the additive lift of your retargeting campaigns, it can also prevent your brand from cannibalizing its own organic traffic.
- Three common incrementality testing methodologies:
- Intent to treat (ITT): In ITT lift analysis, an ad is served to a treatment group and not served to a control group.
- Ghost bids: This methodology places bids on users in the test group and invisible bids on users in the control group.
- PSA ads: In the PSA ad methodology real ads are served to both the test and control groups.
- Incrementality testing saves costs: According to AdExchanger, mobile advertisers that adopt incrementality into their campaign measurement can cut their ad spend by 30% while still growing sales.
- Incrementality testing proves the value of your retargeting campaigns: With incrementality testing you can understand which campaigns were most effective and generated the most revenue. These insights can help you realign your retargeting KPIs and generate more value as a result.
Save costs with incrementality testing
When you can zero in on exactly the channels and strategies that are driving campaign lift, you can balance your budget better. Our team of retargeting and retention experts have helped brands across the mobile ecosystem understand the additive lift of their growth campaigns. Schedule a meeting with our team to better understand your paid retargeting efforts so you can focus more budget on the channels and strategies that drive long-term value.
