Unlocking the Power of Incrementality: A Comprehensive Testing Framework for Optimal Revenue

In the rapidly evolving digital marketing landscape, understanding the true impact of your marketing efforts is crucial for making informed decisions and optimizing your budget. Conducting a single incrementality study is a great start, but to fully harness the power of incrementality, a comprehensive testing framework is essential. This blog will guide you through a structured approach to incrementality testing and introduce Stella, a powerful and affordable tool designed to help you achieve precise and actionable insights.

The Importance of Ongoing Incrementality Testing

Incrementality testing measures the additional impact of your marketing activities, providing a clear picture of what is truly driving results. However, one study alone cannot capture the complexities of your marketing environment. By following a systematic framework, you can continuously optimize towards the most incremental revenue and stay ahead of the competition.

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Step-by-Step Incrementality Testing Framework

1. Test All Paid Media Channels for Overall Incrementality

Begin by evaluating the overall incrementality of each paid media channel. This will help you understand which channels are contributing most significantly to your bottom line and where your marketing dollars are best spent.

2. Segment Testing: Prospecting vs. Retargeting

Next, break down each channel further by testing the incrementality of prospecting campaigns and retargeting campaigns separately. This will provide deeper insights into the effectiveness of your tactics within each channel, allowing you to allocate your budget more strategically.

3. Campaign-Level Testing with Inverse-Holdout or Geo-Holdout Studies

After understanding the incrementality by channel and tactic, it's time to dive deeper. Conduct inverse-holdout or geo-holdout studies at the campaign level. This approach will reveal which specific campaigns and campaign types are driving the most incremental value for your business.

4. Optimize Campaign Settings through Holdout Tests

Finally, test different campaign settings to refine your strategy further. This includes experimenting with various attribution settings in Meta (e.g., 1-day click vs. 7-day click 1-day view) or bid strategies in Google Ads (e.g., Maximize Conversions vs. Maximize Conversion Value). Additionally, test different ad types, concepts, and audiences to determine the most effective combinations.

5. Rinse and Repeat

Once you have completed the initial round of testing, it's time to start again from the top. Measure the overall incrementality of each channel, and incorporate the insights gained from the first round of testing to improve your strategies continually.

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Introducing Stella: Your Incrementality Testing Solution

Stella’s incrementality testing tool simplifies the process of analyzing your data and identifying the best holdout regions to achieve statistical significance quickly. Using synthetic data modeling, Stella ensures accurate and reliable insights for your decision-making process.

Dynamic iROAS Metric for In-Platform Optimization

Once you have determined your iROAS (incremental Return on Ad Spend), it’s essential to create a dynamic custom metric within your ad platforms. Here’s a recommended approach:

Combine Platform ROAS and iROAS: Use the formula: (({platform_roas}+(iROAS×3))/4). This gives more weight to iROAS, ensuring that it can adjust dynamically based on performance.
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Create Custom Metrics in Google Ads:

Go to your Google Ads account and navigate to the campaign or ad group level.
Click on "Columns" and select "Modify Columns."
Create a new custom column with your formula and save it.
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Create Custom Metrics in Meta Ads:

In Ads Manager, select "Customize Columns" and click on "Create custom metric."
Define your metric using the formula editor, name it, and save it.

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The Benefits of a Comprehensive Testing Framework

Consistent Optimization

By regularly testing and optimizing your campaigns, you can ensure that your marketing efforts are always aligned with the most current and accurate data, leading to more effective strategies and better ROI.

Enhanced Decision-Making

With continuous insights from incrementality testing, you can make more informed decisions about budget allocation, campaign settings, and audience targeting, ultimately driving greater business success.

Improved Client Satisfaction

Providing clients with data-driven insights and demonstrable results builds trust and enhances client retention. Stella’s tools empower you to deliver cutting-edge analytics without breaking the bank, giving your agency a competitive edge.

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Conclusion

Incrementality testing is not a one-time effort but a continuous process that requires a structured approach. By following our comprehensive testing framework and leveraging Stella’s powerful tools, you can optimize towards the most incremental revenue, improve decision-making, and provide exceptional value to your clients. Start your journey towards better marketing performance today with Stella.

Discover how Stella can transform your marketing strategy by requesting a demo today and unlock the full potential of incrementality testing.