Connect Campaigns to Business Results with Incrementality Measurement
Discover how advertisers are learning new tactics from a traditional testing strategy.
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Could it be that the secret to succeeding in an age of new platforms and new data is embracing time-honored scientific practices? New research from Facebook shows that using randomized control tests to measure incremental change — an established scientific technique — can help marketers make better decisions about their media investments.1 Industry leaders such as Netflix, Airbnb, eBay and Booking.com say they’ve seen success using incrementality measurement in today’s rapidly changing advertising landscape.
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Measurement is critical for two things. One is to understand the ROI we are getting and correctly account for the source of that growth. And second, to enable optimization across our different paid channels so we can decide where our next dollar of marketing budget should be spent.
— Alok Gupta
Director of Data Science, Airbnb2
Prove sales impact
Incrementality measurement helps advertisers understand the true impact of their ads by connecting the dots from people-based marketing to business outcomes. Using randomized control tests, performance “lift” is calculated by comparing outcomes from two different groups of people: those who've been exposed to an ad or ad variable, and those who haven't. The results help advertisers identify how much business value is driven by an isolated tactic, making them critical for determining which media investments are most effective. By isolating a variable such as creative or audience in experimental conditions, and then connecting it to business results, advertisers can determine effectiveness and shift budgets and tactics to improve future ad performance.
Measure ads with accuracy
A Facebook analysis of 580 conversion lift tests found that incrementality measurement can lead advertisers to decisions that help improve the efficiency of their marketing spend.3 The results of each test were evaluated using two different measurement systems: incrementality measurement and one-day click attribution, which assigns credit to the ad that receives a click within one day of the conversion event.
The two systems disagreed 23% of the time (on average) as to which tactic was most effective for the business — a major difference when trying to find a clear tactical winner for a campaign.4 In cases where there was disagreement, advertisers missed out on a potential 64% average improvement in cost per conversion if they picked the wrong winner.5
“The classical way direct-response advertisers measure is using a click-based attribution model,” said Jonathan Lewis, Facebook Product Manager. “With incrementality widely viewed as the best source of truth for evaluating impact, it’s concerning that tests based on one-day click attribution pick a different winner than what a true test vs. control test would do. Considering the scale of the mismatch tells you whether an investment in incrementality measurement is worth it.” 6
Drive business innovation
A business culture that embraces rigorous, data-driven decision-making stands a strong chance of driving growth, but every marketer should consider how incrementality measurement can help them innovate their advertising.
Industry leaders, including Netflix, Airbnb, eBay and Booking.com, have seen success using incrementality to measure ad effectiveness, evaluate tactics and channels and adapt their marketing strategies to maximize ROI.
According to Stephan McBride, Director of Science & Analytics, Marketing and Economics, at Netflix, incrementality helps marketing leaders at the entertainment company understand the effects of actions it takes in marketing to improve business operations and achieve the company’s primary goal of growth.
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All sides of the C-Suite want to be data-driven, and budgets can be reallocated to the right areas when incrementality shows that particular channels or groups are more effective.
— Stephan McBride
Director of Science & Analytics, Marketing and Economics, Netflix
Airbnb relies on performance advertising to achieve growth goals. Like most businesses, Airbnb has a finite budget with which to pursue those goals, so maximizing ROI on marketing spend is a top priority, and measurement plays a key role. In fact, most of Airbnb’s high-impact work in marketing in 2017 resulted from experiments measuring incrementality and estimating the marginal efficiency of its channels. As a result of learnings from this measurement, the company said it was able to achieve higher returns than ever before on paid display and paid social channels.7
Learn more about how top advertisers are embracing this philosophy in our whitepaper “Unlock Business Growth With Incrementality Measurement.”
4 Steps to a New Measurement Strategy
The Measurement Council — formed in 2016 by the team at Facebook and partners from global industry leaders, top brands and advertising measurement specialists — recommends a 4-step process for business leaders looking to empower their people in their organizations and effectively apply experimentation and learning to their campaign decisions: 8
Step 1Embrace a test-and-learn culture with engaged leadership. Facebook’s new Test and Learn tool can help you get started
Step 2Prioritize data-driven decision-making and elevate its importance throughout the business.
Step 3Run tests to generate data and learnings, and achieve better outcomes
Step 4Hire talented people who can lead, with a focus on innovation and data in all aspects of marketing
