Incremental Lift: The Key to Proving Campaign Performance
Audiences and advertising mediums are constantly changing, with each passing year offering new ways to interact and engage with consumers. To be effective, marketers need to reach the right audiences on their preferred channels and devices, but getting budget approval and executive buy-in on untested tactics can be fraught with challenges.
So, how can marketers prove that a new initiative or campaign will improve sales and create a substantial return? They have two options: launch on a smaller scale before rolling out more broadly, or prove that a campaign worked — after the fact. Either way, decisions based on gut instinct aren’t enough anymore. Marketers need to validate their hunch before investing too much budget in an unproven message, channel, or tactic. By demonstrating a direct connection between marketing efforts and sales, marketers can foster support from the team, and garner the resources needed to scale up.
Proving Results With Incrementality
The goal of marketing is simple: promote a product or service to consumers via ads, emails, events, in-store promotions, and more, in order to generate sales. But, proving how marketing impacts purchase behavior is a lot harder.
Many marketers are embracing advanced approaches to measure the impact of their efforts, such as multi-touch attribution and marketing mix modeling. While these tools can be a powerful weapon in any marketer’s arsenal, much of the focus of these techniques is devoted to measurement across multiple campaigns and programs — either to determine where and how much to invest, or to optimize the creative or channels of campaigns in flight. Yet so much of a marketer’s day-to-day is focused on answering specific questions, or supporting targeted initiatives, such as:
- “Did our rebranding campaign work?”
- “Did the Back-to-School shopper campaign make us money?”
- “Did our campaign targeted at Millennials actually get them into the store?”
One surefire strategy for answering these questions is by measuring incrementality. Incremental lift is the increase in sales that is attributable to marketing efforts above native demand (sales that would have occurred anyway, without marketing influence). Necessities — such as light bulbs, napkins, and socks — are good examples of products purchased due to native demand. The difference between native demand and marketing-driven sales represents incremental lift.
Measuring incremental lift helps marketers understand and prove the real impact of advertising across a wide array of digital and offline campaigns and tactics. Done correctly, it enables marketers to zero-in on actual sales driven by their campaigns.
In the past, incrementality was calculated simply by comparing sales before and after marketing efforts. But many outside factors can impact performance, such as weather, seasonality, pricing, promotion, and more. So this approach can lead marketers astray. For example, winter coat sales will naturally peak during colder months. Merely comparing June winter coat sales to November sales would lead to inaccurate conclusions, because there is naturally less demand in the summertime.
The only true way to measure incrementality is by comparing the sales metrics based on actual response or purchase data for two groups of your buyers — those who saw an ad or campaign, and those who did not. This type of analysis provides powerful insights into which campaign elements and consumer segments are driving response. For instance, marketers can answer important questions, such as:
- Is my campaign driving more buyers, higher purchase frequency, and higher basket size?
- Did my campaign have positive impact on in-store and online sales?
- What impact did it have on existing brand buyers vs. new brand buyers?
- Did my campaign have positive return on ad spend?
- What impact did the campaign have on my market share?
- Which audience segments had the strongest response?
With this level of insight, marketers can optimize their budgets and campaigns in the most impactful way possible, and get the proof they need to secure budget approval and executive buy-in.
While lift analyses can help marketers isolate the impact of specific marketing initiatives, there are a number of critical factors that can influence the accuracy of results. For example, if marketers have access to store- or person-level data, the results will be more accurate than if they only have information at the geographic or national level. Other factors, such as lack of time, bandwidth, and analytic acumen can also make it difficult to tease out what’s really driving sales, leading to inappropriate assumptions and less-than-stellar results. Fortunately, there are advanced measurement solutions available that can not only alleviate the analytical headache, but also ensure the accuracy and actionability of the findings.
Why Incremental Lift?
Modern marketers like to try new things, but can’t afford to waste budget on ill-advised tactics. Measuring incrementality is a better way to validate spend and minimize risk. When leveraged correctly, incrementality can boost a brand’s revenue and help marketers prove their value
Zhelko Genev is a solutions consultant director for Nielsen’s Marketing Effectiveness group, where he is responsible for building technical understanding and credibility with prospective clients, scoping client engagements, and showcasing Nielsen’s Campaign Lift suite of testing solutions. Reach him at email@example.com.