How to validate your retargeting campaigns with incrementality tests?

Retargeting is a highly effective marketing technique used by many brands worldwide. However, running a successful retargeting campaign can be a challenging, time-consuming and costly task. As a result, many brands are curious to know if their retargeting providers deliver on their promises. In order to evaluate their retargeting providers’ effectiveness, many brands opt to use incrementality tests. But is this a reliable method?

Incrementality testing vs your business – what do you need to know?

So what is incrementality testing? It is a technique used to determine the extent to which a retargeting campaign influences your conversions, as opposed to other general marketing efforts you run. It allows you to measure the incremental lift – the difference between the two levels, which can be positive or negative. Properly executed incrementality tests can be an incredibly valuable instrument, as they help you to gain a better understanding of the effectiveness of your retargeting campaign compared to other marketing efforts.

What are the basics of incrementality tests?

The process of incrementality testing typically involves a few key steps that are consistent across different methods. You begin by defining the target audience, which is then split into two groups to create a test group and a control group. The first one receives ads from the retargeting provider, while the control group sees ads based on standard retargeting techniques as a point of comparison.

It’s essential to ensure that the results of incrementality tests are not generated simply due to chance, so a P-value is typically used to measure the probability of any variance or randomness in the results. Once the testing is complete, you can achieve one of three results: no impact, negative incremental lift, or positive incremental lift. No impact means that there was no significant difference between the two groups. A negative incremental lift indicates that the test group performed worse than the control group, while a positive incremental lift is the desired outcome, confirming the success of the retargeting campaign.

How to prepare your business for running an incrementality test?

Before conducting an incrementality test, it’s crucial to have the right resources in place to ensure accurate results. This includes an in-house analytics team that can validate the test results and confirm that the target groups were correctly split. The team should also review conversion data and compare it to the numbers you got from the retargeting partner.

The size of the retargeting campaign and the timing of the testing are other critical factors to consider. A sample size that’s too small won’t generate enough data to make the proper conclusions, while testing too early in the campaign may not provide enough time for retargeting to scale. Ideally, testing should begin after two or three months when the campaign has stabilized. By following these guidelines, you can maximize the value of your incrementality tests and make informed decisions about your retargeting efforts.

Richard Maxwell

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