The digital world is becoming privacy-centric. After two decades where publishers and attribution platforms had almost unrestricted access to user data – changes in the operating system and browsers are giving users more control over access and usage of their information.
Incrementality measurement has become the solution to marketing measurement, as measuring incrementality does not require access to user level data.
Digital Marketing came with a very big promise: Everything is Trackable. Marketers became more Math Men than Mad Men , learning how to utilize attribution platforms providing analytics and insights so that marketers can utilize the oceans of data for their advantage. Everyone wants to assure an incremental sales lift.
With tracking, marketers were able to associate the direct performance of their media spend by using attribution solutions, all offering Advertisers with optimization methods to attract Advertisers to spend more with them.
Yet, over twenty years of technology advancement hasn’t yet solved the oldest problem of the Advertising industry: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half “ (John Wanamaker)
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Not All Advertising is Incremental:
Advertising is not an exact science. It is a way to get a message across to convince customers and prospects to use or buy a service or a product.
Advertising has become such an effective means that companies dedicate significant resources to this activity. Personal and budget.
If we take a digital campaign funnel as an example – even the best campaigns will have some waste.
Only some of the impressions shown convert to clicks, from the clicks, only a few will install an app, and from those installing the app, only a very few will become paying customers. These very few are expected to return the investment over the entire spend.
The Adtech industry is an entire industry dedicated to helping Advertisers improve the conversion rate. From probabilistic targeting companies to dynamic creative generators.
Performance Marketing was Supposed to be the Solution:
With Performance Marketing, Advertisers were given an opportunity to pay media providers only once a user performs an action, like an Install or a Purchase. This sounds like a great way to save Advertising waste.
By providing media vendors with a real-time indication of conversions, Media vendors would be the ones responsible for the optimization of campaigns in order to get paid.
Media vendors would be the ones assuming most of the risk, eliminating most, if not all, the risk from Advertisers paying for inventories that are not going to translate into clicks, installs, or purchasing users.
Performance Marketing is an Ironic Subset of Advertising:
By moving the risk to media vendors – Advertisers create a situation where vendors do everything in their power to minimize their own risk so that they waste the least media they must in order to be credited for a conversion.
We like to call this: Targeting the people who are already queuing up to make a purchase.
We can’t say that there is a perfect way to Advertise. Real-Time conversion sharing with publishers provides a lot of value for Advertisers and Media vendors.
However, this irony, or caveat, is something every marketer must be aware of when they decide how to split their budget and how to read their own performance reports.
Attribution Using Device IDs:
Device identifiers acted as the key for tracking and attribution.
Unlike Websites, where Advertisers control their own domain (literally) – Apps required the help of a 3rd party tool to handle tracking and attribution.
The graph below demonstrates the tracking & attribution process:
Wherever the IDFA was not passed (for example: Mobile Web inventory, or when Limit Ad Tracking was enabled), attribution providers relied on fingerprinting mechanics to match between an impression/click and an install once their SDK was triggered.
Attribution without identifiers:
During the Apple WWDC event on June 22nd, Apple also announced an attribution solution for developers – SKAdnetwork 2.0 (“SKAd”)
SKAd(17) offers an elegant approach to Attribution without invading users’ privacy.
The API involves three participants:
- Ad networks that sign ads and receive install notifications when ads result in conversions
- Source apps that display ads provided by the ad networks
- Advertised apps that appear in the signed ads
Ad networks must register with Apple, and developers must configure their apps to work with ad networks.
The following diagram describes the path of an install validation. App A is the source app that displays an ad. App B is the advertised app that the user installs.
When a user clicks an ad, advertisers display an App Store product screen with signed parameters that identify the ad campaign. If a user installs and opens an app, the device sends an install validation postback to the ad network. The Apple-signed notification includes the campaign ID but doesn’t include user- or device-specific data. The postback may include a conversion value and the source app’s ID if Apple determines that providing the values meets Apple’s privacy threshold.
What is Incrementality?
Incrementality measures the true effectiveness of Advertising activities irregardless of tracking.
The goal of paid advertising is to create incremental revenues. Whether it is to establish stronger brand equity or to push people to download an app and use it.
Incrementality testing requires Advertising to create various scenarios to isolate conversion data. Tests use changes in the marketing activities to compare how a change in activity influenced campaigns performance over time.
The goal of marketing in any organization is to drive growth by driving customers and prospects through the marketing funnel. Awareness > Interest > Desire > Action
Advertising efficiency is reached when the Advertising budget spends produces results that would not have happened if it was not for the Advertising activities.
The role of Marketing in every organization is to drive growth.
Measurement is a critical component in every marketing role. The ability to understand the influence of the marketing activities on results allows a marketer to refine their broader marketing strategy to achieve their goals.
Last Touch Attribution is a method of tracking which gives credit to where a user last engaged with a campaign before conversion.
While Last Touch Attribution is an important indicator – it does not allow Advertisers to measure the effectiveness of their advertising.
Incrementality Measurement offers Advertisers a way to attribute the revenue contribution of various Advertising campaigns.
Performance Marketing Does Not Guarantee Incrementality:
In recent well-known news, Uber Technologies filed a lawsuit claiming Fraud, Negligence, Unfair competition against several ad networks.
Uber ran advertising campaigns with networks where it only paid the network if and once a user became a customer, ordering their 1st “ride”.
Uber found that when pausing some of the advertising campaigns, the total number of new customers was unaffected.
Uber went on to cut 80% of their marketing spend with no significant impact over new customer acquisition.
All this, while using modern-day app tracking and attribution technologies.
While the above example shows a clear picture of cannibalization, the reality for most marketing campaigns is more subtle.
The opposite to incrementality is commonly known as cannibalization.
Cannibalization in Advertising refers to the Advertising activities claiming credit for revenues that would have happened if it was not for the Advertising activities.
Incrementality measurement is the gold standard of Advertising measurement. Measuring value, rather than measuring traffic.
Incrementality testing importance grew rapidly due to the infestation of attribution fraud over the past several years. With the deprecation of identifiers (IDFA, Cookies, ITP, GAID) Incrementality is the most accurate way of measuring and optimizing marketing spend.
INCRMNTAL is an incrementality measurement platform. Our platform uses machine learning and causality algorithms to provide you with incrementality and cannibalization actionable insights.
Our platform provides insights into overall paid marketing activities, even the untrackable ones.