Over the past few years, incrementality has become a key measurement within affiliate marketing, and for good reason. It represents a great tool for improving accountability among your affiliate partners and optimizing return on ad spend (ROAS).
In this article, we'll dive into what incrementality really means, dispel any misconceptions surrounding the term, and explore the benefits you can unlock by leveraging this principle in your affiliate program. Whether you're new to the concept or just looking to deepen your understanding, read on to learn how incrementality can help take your affiliate marketing efforts to the next level.
What is incrementality?
If you've already checked out Incrementality in Affiliate Marketing 101, you know incrementality can mean many different things depending on who you speak to.
We won't get into all the nuances of this definition here. Instead, let's keep things simple and boil down incrementality to one central concept: tying an input to a specific outcome.
You're probably asking yourself, "is that it?" For the most part, yes. As the name implies, incrementality is all about measuring the efficacy of your partnership marketing campaign by breaking it down into measurable increments.
To illustrate, imagine that one of your affiliates recently ran a new ad on Facebook and you want to know what kind of impact it had on the customer journey. You can randomly segment audiences into control and test groups to determine this. The variance in conversion rates will reveal the marginal contribution of the social media ad.
What incrementality is not
Incrementality isn't a broad look at return on ad spend (ROAS). In fact, it's the exact opposite — incrementality is all about identifying precise drivers of results, not lumping a bunch of broad outcomes into one category.
For instance, let's say one vendor delivers an 8x ROAS and another provides a 10x return. While the second vendor may actually be providing a better return on ad spend, you have to dig a little deeper to find out for sure.
That's where incrementality comes into play. During testing, you can add or remove inputs to pinpoint what's leading to the difference in ROAS and consumer behavior between the vendors. Once you know what's responsible for the better return and consumer output, you can double down on that type of spending.
It's important to remember that each partner type will always drive a different ROAS, but each partner supports your full funnel within the affiliate channel to provide unique value to consumers at each touch point. Incrementality measurement helps you evaluate that unique value based on your goals.
Benefits of measuring incrementality
By measuring incrementality, your organization stands to accomplish many of its ongoing goals, including:
Improve partner accountability
Keeping affiliate partners accountable is essential if you want your affiliate marketing program to thrive. You can't have some partners claiming credit to boost commissions at the expense of other partners.
While incrementality alone won't create a transparent affiliate program, it certainly helps.
Additionally, you'll need to develop a reliable attribution model to precisely track each affiliate's actions. Implementing a good attribution model and using incrementality metrics will keep partners honest while allowing you to properly pay your top performers.
Identify and eliminate non-efficient spend
When you only focus on broad, high-level metrics, it's tough to determine which inputs are providing value for your brand. Instead, you're forced to resort to guesswork and make inferences without the complete picture.
Through incrementality testing, you can precisely determine what inputs are working. You'll likely find that certain causal events aren't making as big an impact on the customer journey as you initially thought. When you've determined this, you can redistribute marketing dollars where they belong.
Reveal opportunities to scale
After you achieve some success with your partnership marketing campaign, it's time to scale it. The question is, how do you determine which channels you should focus on? Once again, the answer is incrementality testing.
The more incrementality testing you conduct, the better you'll understand the strengths and weaknesses of your affiliate partnerships. You can determine what sort of ads or deals (coupons, sales, etc.) or partner types (content, loyalty, card-linked offer, etc..) resonate with your target audience and use these insights to build a scalable program.
Ready to get incremental?
Implementing an incrementality measurement strategy in your affiliate marketing program can greatly improve accountability among your partners and optimize your return on ad spend.
By tying specific inputs to outcomes, you can identify precise drivers of results and eliminate non-efficient spend, as well as reveal opportunities for scaling your program. While incrementality is a complex topic that can be challenging to apply to your affiliate marketing program, fortunately, you don't have to go it alone.
Acceleration Partners can help you navigate the complexities of this advanced concept. With our guidance, you can effectively measure incrementality and unlock the full potential of your affiliate program.