MASTERING INCREMENTALITY IN PERFORMANCE MARKETING: A DATA-DRIVEN APPROACH TO MAXIMISING ROI

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IN THE WORLD OF PERFORMANCE MARKETING, “INCREMENTALITY” HAS BECOME MORE THAN A BUZZWORD – IT’S ESSENTIAL. AT ITS CORE, INCREMENTALITY ANSWERS A CRUCIAL QUESTION: HOW MUCH OF OUR MARKETING ACTIVITY IS GENUINELY DRIVING ADDITIONAL VALUE, AND HOW MUCH WOULD HAVE HAPPENED ANYWAY?

This article provides an in-depth look at incrementality measurement, explores how to assess and apply incremental lift, and discusses how to set up and interpret experiments. With real-world data insights, we’ll examine proven strategies to help you focus on the channels, audiences, and tactics that generate meaningful, additional returns.

WHAT IS INCREMENTALITY IN PERFORMANCE MARKETING?

Incrementality shows us the extra impact a marketing activity has on conversions or revenue – above and beyond what would have happened regardless. It’s a method of isolating the true effectiveness of a marketing campaign, channel, or tactic by distinguishing between organic conversions (those that would have happened anyway) and incremental conversions (those directly driven by the campaign). This approach helps marketers make informed decisions and allocate budgets to tactics that genuinely contribute to growth.

Without measuring incrementality, marketing activities can be misleading. For example, if a large percentage of conversions from a campaign are from users who would have purchased anyway, resources could be better spent elsewhere. Incrementality brings clarity and ensures that your marketing investments align with genuine impact.

WHY INCREMENTALITY MEASUREMENT IS ESSENTIAL:

Incrementality measurement isn’t just about verifying campaign success; it’s about unlocking insights that traditional attribution models often miss. Key benefits include:

For example, a study by Measured revealed that on average, only 50-70% of digital ad conversions are incremental. This means that up to 30-50% of conversions would have occurred without any exposure to the ads, underscoring the importance of isolating and optimising true incremental impact.

HOW TO MEASURE INCREMENTALITY:

With these trends in mind, let’s look at the specific metrics that need attention during Q4, along with targeted actions to keep your campaigns effective and profitable.

To make the most of incrementality, it’s important to choose the right measurement methods. Here’s how different approaches can help pinpoint the true impact of your campaigns.

Controlled Experiments (Holdout Testing)

One of the most reliable ways to measure incrementality is through controlled experiments, where a “test” group is exposed to a campaign, while a “control” group is held out. Comparing results between these groups reveals the true lift driven by the campaign.

Implementation Example:
A retail brand might run a holdout test for a display campaign. By splitting its audience into two groups, with one group excluded from exposure, it can assess if the test group shows a significantly higher conversion rate than the control. This difference quantifies the incremental lift generated by the ads.

Data Insight:
In a recent study by Measured, a retailer discovered that only 40% of conversions from its display ads were incremental, meaning that 60% of the attributed sales would have occurred without ad exposure. This insight helped them reallocate their display ad budget to channels with a higher incremental impact.

Geo-Targeted Lift Studies

Geo-experiments offer a practical approach for larger brands or when holdout testing isn’t feasible. By targeting specific regions with an ad campaign and leaving other regions as control, you can measure lift across geographic areas.

Data Insight:
According to Google’s Think with Google, a global e-commerce brand ran a campaign in select cities, tracking metrics across similar cities that did not receive exposure. The result showed a 15% increase in incremental sales in targeted cities, demonstrating the effectiveness of geo-targeted lift studies for isolated campaigns.

Data-Driven Attribution Models with Incrementality

Using multi-touch attribution (MTA) or data-driven attribution models can provide a clearer understanding of which channels contribute most to incremental conversions. Unlike last-click models, data-driven attribution assigns credit to multiple touchpoints, helping you identify the real drivers behind incremental growth.

Data Insight:
According to Tinuiti, brands using data-driven attribution saw up to 20% higher incrementality in paid search and paid social channels. This approach ensures that conversions influenced by upper-funnel activities are accounted for, rather than overvaluing last-touch interactions.

STRATEGIES TO DRIVE INCREMENTALITY IN PERFORMANCE MARKETING:

Understanding where incrementality is generated is only half the equation. Here are proven strategies to actively boost incremental conversions.

Segment High-Intent and Low-Intent Audiences

Focusing on audience intent can significantly impact incremental results. High-intent audiences (e.g., past purchasers or those who have shown strong engagement) may convert with less advertising influence, whereas low-intent audiences (e.g., new users) may require a stronger push.

Recommendation:
For high-intent audiences, reduce frequency and focus on retargeting methods that remind users of a specific benefit or offer. For low-intent audiences, use awareness-building content or promotions designed to increase engagement and drive incremental lift.

Align Messaging with Stage of the Funnel

Incrementality isn’t achieved by simply ramping up ad spend; it’s about creating touchpoints that bring additional value at each stage of the customer journey.

Use Sequential Retargeting

Sequential retargeting – moving users through different ad formats based on previous interactions – offers more tailored messaging and improved incrementality. By guiding users along a series of touchpoints, you can avoid ad fatigue and present more personalised experiences that build interest gradually.

Example:
A consumer electronics brand tested sequential retargeting on Meta by showing users a progression of ads based on their interactions: an initial video introducing the brand, a carousel ad showcasing product benefits, and finally, a discount offer. According to AdEspresso, this approach led to a 25% increase in incremental conversions compared to standard retargeting. By guiding users through a structured journey, the brand achieved a deeper engagement and reduced the risk of oversaturation.

Optimise Creative Content and Offers

Testing various creatives and promotional offers is essential for boosting incremental conversions. A/B testing lets you identify the combinations that resonate best with users and refine messaging to amplify lift.

Data Insight:
A fashion retailer tested different offer formats, finding that specific discount messaging (“Get 20% off your first purchase”) led to a 15% increase in incremental conversions compared to generic “Buy Now” messaging. This was backed by Google’s recommendations on ad testing, which emphasise that personalised calls to action and tailored incentives tend to drive stronger engagement and lift.

Run Real-Time Tracking and Adjust Campaigns Dynamically

Real-time data allows you to monitor incrementality during the campaign, instead of waiting for end-of-campaign analysis. Platforms like Google Ads and Meta Ads offer live data on key metrics, enabling you to swiftly shift focus from underperforming ads to those yielding higher incremental lift.

Example:
A travel company ran a Google Ads campaign with real-time tracking and found that specific keyword variations generated unexpected high-incremental conversions. By reallocating budgets dynamically towards these keywords, the company improved incremental ROI by 18%. According to Google, real-time tracking like this allows for rapid response to performance insights, which is particularly effective for high-intent seasonal campaigns.

Prioritise New Customer Acquisition Over Existing Customer Retargeting

One of the main goals of incrementality is to attract new customers who wouldn’t have made a purchase without seeing your ad. Retargeting existing customers often leads to cannibalisation, where marketing simply captures purchases that would have happened anyway, diminishing incremental returns. Shifting focus towards new customer acquisition brings genuine growth, as it expands your customer base rather than recycling conversions.

Recommendation:

Data Insight:
According to SegmentStream, brands focused on acquiring new customers saw a 30-40% improvement in incrementality compared to brands heavily retargeting existing customers.

CONCLUSION:

Driving incrementality in performance marketing is about understanding that not all conversions add equal value. Focusing on strategies that bring in additional customers and boost engagement where it matters most allows you to make smarter decisions and maximise ROI. Techniques such as controlled experiments, geo-targeted studies, and sequential retargeting can help identify which campaigns truly add incremental value.

In a performance marketing landscape where attribution alone can fall short, incrementality testing has become essential. Armed with accurate data and insights, marketers can build campaigns that do more than capture existing demand – they can drive new growth opportunities. By prioritising incrementality, you ensure every pound spent actively contributes to measurable, sustainable results.