Incrementality: The most important thing for marketers to track

Incrementality. People have been talking about it a lot lately, which is sort of interesting to me, because when I think about incrementality, I really think about it as being. That's the core fundamental thing, the really the only thing that marketers should care about. The idea behind incrementality, the concept is if I put an extra dollar or an extra hundred dollars or an extra thousand dollars into some marketing channel, how much additional revenue is that going to drive? That's the thing that you actually care about as a marketer. You want to know, okay, if we spend X number of additional dollars, if we pull back Y number of additional dollars, how much is that going to change our overall business? That's the idea behind incrementality, and that's the thing that really matters. All of the other things that marketers look at your last touch report in Google Analytics or your Facebook cpa, those are all approximations of this thing that we really care about, sort of the platonic marketing metric, which is increment. And so incrementality has sort of risen in the dialogue recently because people have started to realize that a lot of those other metrics that they look at aren't actually capturing incrementality, even though they want it to. So your last touch, Google Analytics reporting. There's a lot of marketers are familiar with the idea that branded search, spend or investment might not be truly incremental. There have been sort of a lot of famous experiments that have happened. Ebay did one, and this was now like 12 years ago. So it's unclear how much it applies to the way that things work today. But at least 12 years ago, eBay ran an experiment where they turned off their branded search marketing because when people were searching for ebay socks in Google, they knew what they were looking for. They were gonna go to ebay and they were gonna buy some socks. They didn't need to pay Google for that. Click on the top advertisement because people were already going to buy socks from ebay. Lots of marketers are familiar with this ide. If people are searching for your brand, right? And whether your brand is ebay or whether it's Nike or whether it's, you know, a smaller e commerce brand, it's because they've already learned about your brand somewhere else. So they've learned about your brand probably from other advertising that you're doing, maybe on TV or YouTube or Facebook or anywhere else. They learn about it on their phone, they open up a new tab on their browser, on their computer, they type in your brand name, they click on that first link, which now you have to pay Google for, and then they make a purchase. And so that spend on branded search in that situation at least isn't truly incremental. And so that actually might be the case with lots of different advertising that you're doing. So the question always is, right? Facebook is a really good example. Facebook has a huge audience. They have an audience of billions of people. The majority of people in the world are on one of Facebook's properties. Facebook is very, very good at knowing when people are likely to purchase within a certain category. So they're very, very good at showing advertisements to people who are already very likely to purchase. And so always the question is, is how incremental is that spend, right? Are they generating new customers for you, or are they just, you know, getting an alley oop on customers who are going to convert anyway? And so the concept of incrementality has always been fundamental to marketing, but I think now people are talking about it a lot more in contrast with some other measurement methods that people want to be measuring incrementality but don't really. It's very important for brands to think about incrementality because that's how you actually think about optimizing your marketing budget. You want to put more money into channels that are driving truly incremental new customers for you, and you don't want to be investing in channels that are just getting an alley oop, right? That's just the branded search effect, where people already know about your brand, they're going to convert anyway, and you're just paying some channel additional money to. To get them sort of really to do nothing for you. That's this idea, and that's why it's really important for marketers, for CMOs to really be thinking hard about what is the true incrementality of every dollar of investing into every different channel versus how much of that spend is being wasted and not actually driving additional revenue for you. Well, they knew what they were looking for. They were gonna go to ebay and they were gonna buy some stocks. They didn't need to pay Google for that. Click on the top advertisement. Because people were already going to buy stocks from ebay. Lots of marketers are familiar with this idea where if people are sear your brand, right? And whether your brand is ebay or whether it's Nike or whether it's, you know, a smaller e commerce brand, it's because they've already learned about your brand somewhere else, so they've learned about your brand, probably from other advertising that you're doing, maybe on TV or YouTube or Facebook or anywhere else they learn about. On their phone, they open up a new tab on their browser, on their computer, they type in your brand name, they click on that first link, which.