Incrementality

Definition

Incrementality is defined as a measure of supplemental business resulting from a marketing tactic or set of marketing tactics which would not have otherwise occurred. It can be stated in terms of a lift in customers, sales, revenue, or other pertinent metrics.
A/B testing, AAU studies and other forms of research are often used to quantify and/or project incrementality.

Incrementality is calculated by subtracting out a base level from an exposed level. Depending on the desired insight, the base level can represent either non-exposure to marketing or exposure to comparative marketing (e.g. an existing campaign).

Mathematically, it can be represented in either absolute or proportional terms:

  • Incrementality (absolute) = Exposed Level – Base Level
  • Incrementality (proportional) = (Exposed Level – Base Level) / Base Level

For example, if brand preference of those exposed to an ad is 40 and those of a matched, unexposed control group is 30, then absolute incrementality is 10 (i.e. 40 – 30) and proportional incrementality is 33% (i.e. (40-30)/30). [1]

 

References

  1. ^ Common Language in Marketing Project, 2018.

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