Should You Even be Worrying About Incrementality?

With all this talk about incrementality-based advertising, we thought we’d finish with a look at when and why you should even worry about the metric.

Olivia Kory is building Haus.io, where they help to automate marketing incrementality testing. She explains that it only makes sense to hire Haus when your business can’t untangle which of its channels is driving growth.

For instance, you might be growing so fast organically that you can’t just turn off paid to see its impact on the top line. Or you are an omnichannel business selling across Amazon/retail in addition to DTC, and there are halo effects at play (e.g. someone seeing your products at Costco, then later buying online). Olivia typically sees these problems occur somewhere between the $5-10M annual ad spend.

If your brand is small and nowhere near these “problems”, you don’t need to worry about incrementality as much, at least when it comes to your tech stack and the purchasing of expensive SaaS to help you sort all of this out.

That doesn’t mean you shouldn’t think about it.

Remember the shop owner and the flyer boy.

Sean Frank (him again), notes that this can be the problem with most loyalty programs in this thread.

The point of stuff like loyalty, or discounts, or coupons, or referral programs should be to drive net new sales. The problem is, it’s very difficult to deliver these perks to the folks who need them to make the sale, rather than to the people who would have bought anyway. The former means you are landing new customers and growing your user base. The latter means you’re handing out money for nothing.

Takeaway: Discounts, incentives, and advocacy/loyalty programs are all entrenched in the fabric of DTC at this point. If you’re a smaller or medium-sized brand you probably don’t need sophisticated tech to help you tease apart incrementality, but you do need to understand it on a fundamental level. Are you building up your consumer base or simply giving away your profits?