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Calculating Incrementality: Finding the Right Audience

Reaching the people mostly likely to generate incremental revenue really boils down to one thing — you must constantly be evaluating the difference — or lift — in performance between:

  • Shoppers exposed to retargeting ads
  • Comparable shoppers not exposed to retargeting ads

Randomized control trials (RCTs), where lift is calculated with automated control (or holdout) groups, are the gold standard for measuring incrementality.

Related post: How Retargeting Delivers Incremental Revenue [Video]

RCTs will answer the question: Which of my users have high incremental lift (likely to purchase because of viewing an ad) and which have low incremental lift (likely to purchase even without viewing an ad)? You can then optimize for incrementality, meaning funnel more ad spend to audiences that grow your bottom line, and less to those that don’t.

Our new online incrementality calculator provides tips for determining which users have high incremental lift and also allows you to punch in revenue and budget numbers and see the potential net-new revenue your company could generate by optimizing ads for incrementality.

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