What is Incrementality?

Incrementality is a term used in mobile advertising that refers to the additional (or incremental) impact of a particular marketing campaign or effort on conversions. More specifically, Incrementality works by tracking the performance of a campaign before and after its launch. It tracks metrics such as conversions, revenue, and other related metrics. It then compares the metrics to the metrics of the same period before the campaign was launched, providing a clear picture of the campaign’s impact and ROI.

Why is measuring Incrementality important?

Incrementality helps marketers understand how their campaigns are performing and how they can improve the ROI (return on investment) of a particular campaign. Knowing this information and optimizing campaigns to maximize ROI can help marketers reduce costs and increase revenue.

By measuring the incrementality of a campaign, marketers can determine whether the campaign generated additional value or impact beyond what would have happened without the campaign. This allows marketers to optimize and reallocate budget to the most effective marketing campaigns.

How is Incrementality calculated?

There are various methods for measuring incrementality. The most common method is A/B testing, which involves comparing the results of a campaign with a control group that does not receive the campaign, and econometric modeling, which uses statistical analysis to isolate the impact of a campaign on sales or other outcomes.

Incrementality = (Test Conversion Rate – Control Conversion Rate) / (Test Conversion Rate)

With the continuously changing advertising industry, measuring incrementality at regular intervals is important to ensure that marketers keep up with the latest channels to bring them the highest ROI.