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Measuring Success in 2020: Part Four

From Attribution to Incrementality: An Interview with Carl Spaulding, EVP of Strategy at NCSolutions

{This is the final installment of a four-part series aimed at helping marketers up their programmatic game in 2020 by taking a more holistic approach to measurement. If you haven’t already, go back and read parts one, two, and three.}

As you learned earlier in our series, there are plenty of ways to tie your digital investment to metrics, like online sales — or even offline sales.

For our final post, we interviewed Carl Spaulding, EVP of Strategy at NCSolutions (NCS) — one of our partners — to discuss how consumer packaged goods (CPG) marketers can go beyond attribution to gain a deeper understanding of incremental sales.

Attribution and incrementality both measure performance. At a high level, how do the two differ from each other?

CARL SPAULDING: Most attribution assigns credit to consumer touchpoints (like search clicks, display, mobile, or Connected TV ad impressions) that are associated with certain customer actions or conversions (i.e., sales) — but it does not measure if exposure to the ads actually caused customers to take action. Attribution generally tracks the path to an online or offline purchase, not the causal influences that drove a customer to make the purchase.

Alternatively, measurement of incrementality — like sales lift measurement — compares the purchase behavior of test and control groups to prove the impact of ads on customer actions and sales. Since these test and control groups are balanced across hundreds of online and offline variables, any difference in customer behavior is a result of someone seeing your ads. Incrementality measures actual sales that occurred as a result of the advertising.

Is one approach better than the other? How do marketers know which one they should be using?

It is really about what questions you are looking to answer.

Incrementality — and more specifically sales lift measurement — can be seen as more scientific since it proves a causal relationship between ad spend and customer actions. This measurement seeks to answer questions, such as, “What is the advertising’s direct impact on sales?”

Attribution, on the other hand, shows a correlational relationship. It answers questions like, “What touchpoints were associated with a consumer conversion?” Sometimes that conversion is defined as a sale, other times it might be defined as a site visit.

All that aside, both are still valuable, and marketers should look to incorporate a blend of both measurements depending on what goals they’re trying to achieve. Once you understand the difference, these two approaches can even complement each other in your measurement strategy.

Here's some of the main differences between the two:

How does NCS use sales lift measurements to help brands improve their advertising?

Brands can improve their advertising through post-campaign insights and enabling in-flight optimization. NCS post-campaign Sales Effect studies provide a deep dive into how well campaigns worked, generating valuable insights for improving future campaigns. The NCS Optimization Suite gives CPG brands an unprecedented ability to optimize to offline sales while still in-flight — before their full campaign budget is spent. This is possible with Purchase Data Metrics and Sales Lift Metrics, both part of the NCS Optimization Suite.

With the NCS Optimization Suite, CPG brands can optimize throughout their campaigns using offline sales as their key performance indicator. We have two separate, yet complementary solutions:

  • Purchase Data Metrics (PDM): Brands gain directional signals about how their campaign is performing based on trends in total sales by exposure group. PDM is available as often as daily, but it does not measure incrementality.
  • Sales Lift Metrics (SLiM): By using incremental sales data powered by machine learning, CPG brands can dial up the very campaign tactics that are driving the highest return, and dial down those that are producing fewer incremental sales results. SLiM is a causal measurement of incremental sales driven by advertising, and is available weekly after the fifth week of a campaign.

PDM and SLiM are both available through The Trade Desk platform.

Interested in tracking CPG sales with NCSolutions across your US-based digital buy? Contact us to learn more.