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Calculating Incrementality: Bucking the Status Quo

Incrementality retargeting
When it comes to retargeting, most agencies and third-party providers have rigged the system in their own favor by claiming credit for revenue that would’ve come through organically.

Behind the scenes, they’re engaging in “status quo retargeting.” This approach targets shoppers with high organic purchase rates and low incremental lift who are already planning on buying regardless of seeing an ad. The result? Third-party providers’ self-reported performance looks strong because they’re measured based on last-click attribution. But you, the advertiser, end up missing out on untold incremental revenue growth.

Related post: From Attribution to Incrementality: 5 Steps to Start Growing Revenue

An alternative approach to the status quo is incrementality retargeting. Here the focus is on people with low organic purchase rates and high incremental lift (meaning they’re more likely to be influenced by an ad to make a purchase).

Advertisers can discover who these people are by doing randomized control trials (RCTs), where lift is calculated as the difference in revenue between two groups: those assigned to a treatment group (who see ads) and those in a holdout group (who do not see ads). This difference reveals the additional revenue generated directly by advertising.

A marketing team can then hold back on showing ads to “low lift” users and replace them with less-expensive-to-acquire “high lift” users whose behavioral data shows they’re more likely to be persuaded by ads.

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

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