Answering the question, “What is incrementality,” is like trying to define the word “warm.”
In short, it depends on who you’re asking.
Just as a person raised in Minnesota is likely to have a different perspective about what it means to be warm than a person raised in Singapore, so will one brand have a different point of view about incrementality than another brand.
Instead of understanding incrementality as a term with a rigid definition, it’s far more useful to perceive it as a concept.
The concept of incrementality is as follows:
How brands define incrementality varies; it is not a one-size-fits-all approach. This is because a “desired outcome” is different from one brand to the next.
For example, some actions that brands may look at within their affiliate program to assess “incrementality” include:
These are just a few ways brands evaluate incremental actions within their programs. The key point is that it’s ultimately up to the brand to determine what action/actions they deem incremental.
Once that’s decided, that definition can be used to set incrementality goals, track efforts, allocate spend towards those actions and even reduce spend in areas that don’t meet that criteria.
Establishing what incrementality means for your affiliate program starts with asking the right questions. Here are a few we ask to our clients to help them define incrementality for their affiliate program:
Every brand will have their own unique perspective on and answers to these questions based on what they value and based on what their data shows, be that provided by their affiliate network or Software as a Service (SaaS) platform or what they’ve gathered internally.
Once your team has enough perspective and data to answer some of the aforementioned questions, you’ll be able to establish a performance baseline by channel and by partner vertical (e.g. content, loyalty, mass media, coupon/voucher, brand-to-brand, mobile, etc.).
From there, all partner activities and initiatives can be centered around maintaining or improving those incremental KPI’s—and perhaps even optimizing away from partners who do not meet those standards.
These insights can also help ensure your affiliate program remains credible and efficient, both with internal stakeholders and with external partners.
Too often, brands claim that their affiliate partners aren’t driving incremental value. However, in most cases, those affiliate partners don’t have a clear understanding of what the brand’s definition of incrementality is or how it’s being measured/evaluated. This missing information makes it difficult for them and the program management team to support those outcomes.
In addition, some brands perceive certain partner types (e.g. content, coupon, loyalty, etc.) to be more incremental than others, which may or may not be accurate. It all comes back to what the brand’s unique definition of incrementality is for their affiliate program, their business, etc.
Each affiliate partner contributes to a piece of the marketing pie. Therefore, it’s important to maintain a healthy balance of partners within your affiliate program as they each can add value in their own way. This balanced approach can also help reduce program contribution risk and maintain healthy sales from different audience groups driven by the portfolio of partners in a program.
It is also necessary to communicate incrementality goals to your affiliate partners so they understand why certain decisions are made, and what success looks like for both themselves and the brands they are working with.
With better alignment, open communication and clear objectives – even when business goals shift – brands will realize better incrementality—not just within their affiliate program, but from all their marketing channels.