What is Incrementality?
Incrementality measures whether your advertising actually caused conversions, or whether those users would have converted anyway. It answers the question: "What additional value did my ad spend generate that wouldn't have happened organically?"
Traditional attribution gives credit to ads that users saw before converting, but this doesn't prove the ad influenced the decision. Incrementality testing uses controlled experiments to measure true causal impact.
Incrementality Formula
Incremental Lift = (Test Group CVR - Control Group CVR) ÷ Control Group CVR × 100
Why Incrementality Matters
- True ROI: Understand actual return, not just attributed return
- Budget Optimization: Stop spending on channels that don't drive incremental value
- Cannibalization Detection: Identify when ads take credit for organic conversions
- Privacy-Resilient: Works even with limited user-level tracking
- Strategic Decisions: Make informed channel mix decisions
Incrementality Testing Methods
| Method | How It Works | Best For |
|---|---|---|
| Geo-Split Test | Compare regions with/without ads | Large-scale channel tests |
| User Holdout | Randomly exclude users from seeing ads | Retargeting, specific audiences |
| Ghost Ads | Track would-be ad exposures without showing ads | Display, programmatic |
| Conversion Lift | Platform-provided holdout test | Facebook, Google campaigns |
| PSA Test | Show public service ads to control group | Brand campaigns |
Running an Incrementality Test
- Define Hypothesis: What do you want to learn?
- Select Method: Choose appropriate test type
- Determine Sample Size: Ensure statistical significance
- Set Duration: Typically 2-4 weeks minimum
- Create Control: Randomly assign users/regions
- Run Test: Execute without changes mid-test
- Analyze Results: Calculate lift and statistical confidence
Pro Tip: Test Your Biggest Spends First
Start incrementality testing with your largest channels. Even a small improvement in efficiency on high-spend channels can yield significant savings.
Interpreting Results
| Incremental Lift | Interpretation | Action |
|---|---|---|
| 0% or negative | Ads not driving incremental value | Reduce/stop spend |
| 1-20% | Low incrementality | Optimize or reduce |
| 20-50% | Moderate incrementality | Maintain, optimize |
| 50%+ | High incrementality | Scale investment |
Common Findings
- Brand Search: Often low incrementality (users would search anyway)
- Retargeting: Variable, often 20-40% incremental
- Prospecting: Higher incrementality, reaching new users
- Social Media: Typically 30-50% incremental lift