Incrementality Testing Series
by Zac Henschel
September 11, 2018
Incrementality

Identifying What to Test Now:
You’ve fought for this media budget. You’re investing this media budget. And finally, you’re getting your media out in front of….someone who was already going to buy?

What if that is happening (and it may be happening) – wouldn’t you want to know?

For this very reason, it’s no surprise that incrementality remains such a focus across all types of marketing. Marketers are all hungry for reliable evidence to help us make decisions about whether our media actually has the intended impact.

Building off our recent incrementality blog post  and whitepaper, we want to spend more time unpacking the topic of incrementality. Specifically, we will be focusing on testing as the purest method of determining the incremental value of marketing. There is a huge opportunity for clients who develop an “always on” culture of testing for incrementality across their investments, but we want to unpack how this actually impacts your business. Incrementality testing requires thoughtful planning, prioritization, risk evaluation, and execution. For marketers looking to prove the value of their marketing investments and benefit from their learnings, it is critical to nail the basics of test planning, methodology and operations.

How do business leaders make “always on” testing a reality?
To capture the “how do I actually do this” questions that come with incrementality testing, we’ll be posting content around three testing-centric topics over the course of the next few months.

  • Kicking the tires: Identifying what to test now
  • Under the hood: Testing methodologies and execution
  • Fine-tuning: applying test results to activation and measurement

Today, we want to hone in on the first topic which is a common question for marketers: What should I test to have the most impact?

Kicking the tires –  Identifying what to test now
When considering the time, scope and effort needed for organizing formal experiments to determine the incrementality of your media, planning is key. Marketers are often only able to run a finite number of controlled tests at any one time to ensure clean test reads. Time is a scarce resource, and marketers need to prioritize the most impactful tests first, developing a roadmap to guide test learnings.

But how do you narrow in on where you can have the most impact? At Ovative Group, we key in on three main questions to identify what tests to prioritize:

Question 1: Where am I investing most right now?
Where are your largest digital investments? Begin testing there first.

To drive impact through testing, it is critical to identify the most costly assumptions you’re making. If you spend significantly higher in one digital channel than others, your budget is already making a hypothesis that the performance of that channel is outstanding. It then becomes necessary to test that hypothesis. If you are wrong about the channel you are spending most in, you would likely make very different decisions with your money.

As an example, typical digital measurement favoring ecomm-only last click has biased spend across the industry towards lower-funnel demand capture media like brand search and retargeting. Ovative has helped many retailers who have been assertive in Paid Search Trademark Terms to test the impact of that spend, going dark in a control group over a period of a few weeks. The results often revealed much lower, even negligible incremental value, with almost all of that paid traffic converting through organic channels that required no spend.

Questioning and validating the effectiveness of your highest spend channels may be controversial in your organization, especially for firm believers in “tried and true” tactics. However, tests like this one help clarify in an objective way. Results equip you with the proof needed to drive change in a channel based on its true incremental impact rather than just attributed value, and even identify spend that should go towards truly incremental media.

Question 2: What tactics have room to scale into a broader audience?
Testing will identify not only where to shift spend from, but it also reveals where there are unexplored opportunities.Non-branded media and digital display tactics fall into this category.

In contrast to the Trademark Paid Search Test above, Ovative helps clients prove out significant incremental benefit, for both online and in-store, media channels like non-brand paid search, display or paid social audiences. It is key to identify your investment opportunities where there is room to scale, and where traditional measurement may not assign proper credit. We have seen proven incremental return on ad spend across upper funnel channels like non-brand search, paid social and display. These types of channels will deliver incremental ROAS ranging from 50%-100+% of what is reported in attribution – significantly higher than what we see when testing “branded” media aimed towards audiences already planning to buy.

Plan your tests to complement each other by identifying both where you want to take money from and where you want to invest more money. This balance in your learning agenda will allow you to quickly get smart about where your budget should shift in order to capitalize on true incrementality.

Question 3: What am I ready for?
We understand that getting buy-in to plan and execute a formal incrementality test on a significant portion of media spend can be tough. This can be especially daunting when your organization is new to testing media investments. In these cases, it is best to determine what the easiest first step might be and test there.

In some cases, to get that critical momentum, it’s best to choose the lowest hanging fruit and just get moving. Display and paid social partners often offer tests with minimal (if any) expense – though you may have limited visibility to how results are calculated. This could be an ideal first step as your organization gets used to testing media performance. Even though these test may not be the most impactful, building momentum through an easy win can help enable the more impactful tests on higher-spend channels in the future.

Which of these questions resonate most with you? Are you invested heavily in untested areas? Are you under-investing in channels where there could be opportunity? Is there somewhere where your organization is ready to test now? Use these questions to prioritize what test comes next. Then, keep building on those questions to feed your testing learning agenda – set your sights on how your business might organize around the highest priority questions it wants to answer, and start moving forward.

Like what you see?
Ovative loves helping businesses unlock incremental value through testing – an important piece to your overall marketing story. Beyond testing, we want to help you use the insights from testing comprehensively with online-to-offline connection and customer analytics to inform better business decisions. Drop us a line and let’s see how we can harness the the broader power of enterprise-level measurement and activation in your business.

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