Sharm Tank Vol. 17

Author

Nik Sharma
March 15, 2024

Happy Friday,

So how about that TikTok ban, huh?

In all honesty, I’m not too worried. When something becomes so entrenched in our culture, it doesn’t just disappear overnight. 

We’ll see what happens, but for now, check out this piece from The New York Times, it’s an awesome breakdown of the current situation.

Anyway, Let’s jump straight into it!

We’re Hiring!

  • Director of Paid Media — you will oversee our team of media buyers, providing strategic input around campaigns, how to achieve client results more efficiently, and working with our internal creative and web UX/UI team. You must have good experience to apply for this role.

  • Account Coordinator — you will work with the BEST account team in eCommerce, supporting them to ensure that our clients always feel a proactive and thoughtful presence from us. You don’t need much experience to apply for this role, you just need to be hungry.

  • Senior Web Designer — in this role you will lead the UX/UI design process from concept to execution, ensuring high-quality deliverables that meet project objectives and deadlines for you designed projects.

  • Office Assistant - We are looking for a part-time office assistant to help us with administrative tasks for ~5 hours each week, coming in on Tuesday, Wednesday, or Thursday. We’ll need your help with organizing the office and assisting our team.

The Main Course

"Half the money I spend on advertising is wasted; the trouble is I don't know which half." - John Wanamaker

This quote from John Wanamaker remains true today. As marketers, we need to spend more time identifying which half of our marketing is driving results.

The current digital landscape is a diverse one, filled with tools ranging from paid social, organic social, email, sms, online marketplaces, search engines, video platforms and more.

Each of these platforms unlocks new audiences. In fact, research shows that customers have an average of 8 touch points before making a purchase.

But with rising CPMs and compounding competition, advertisers can no longer throw money at the wall and expect efficient results.

Today, you need to know the exact value that every dollar in ad spend will yield. And this can only be done through incrementality.

But what is incrementality? 

If you’re like most marketers, you’re likely relying on the same channels year after year. While these channels seemingly generate results, you’re essentially showing your product to the same audience pool and missing out on the opportunity to reach new audiences.

An incremental outcome is one that wouldn't have happened without a specific marketing action.

Incrementality in marketing measures the actual impact that a marketing activity has on a specific KPI.

A great way to think about it is if you drive 100 sales for your product through a paid social campaign, how many of those sales were a direct result of the campaign and not the result of multiple other touch points.

This concept gained increased traction in response to the stricter landscape of user privacy in the last few years.

This also ties back into attribution since you don’t want to pay for the same result twice (or accidentally have 2 different platforms both attributing the result).

But don’t get the two confused.

Attribution is the process of matching two touch points of data. Incrementality, takes into account attribution to determine the true effectiveness of your marketing activities.

However, you can leverage the two through media mix modeling to forecast the best allocation of your budget across all marketing efforts, not just those that can be attributed.

This requires a high level of scrutiny, especially when considering privacy regulations and the difficulty of accounting for audience overlap. It’s for this reason that predictive modeling is the favored approach for measuring incrementality.

Now that we’ve gone over the basics of incrementality, let’s talk about how you can actually test it. Like most testing methodologies, this involves a control group and test group. 

Let’s look at a hypothetical. You’re running a campaign for your product and want to test its incremental lift. Group A is your control group, a benchmark that you can compare performance to. This group has not been exposed to the campaign. Group B, however, was exposed to the campaign. Group A had 20 purchases and Group B had 25 purchases. 

We can calculate the incremental lift by taking the difference in purchases between the test and control group, dividing that by the number of purchases from the control group, and multiplying by 100. It’s literally the formula for percent change.

In this case, incremental lift would be 25%. Meaning that the campaign generated a 25% lift in purchases overall (or in this case, 5 purchases).

You can also use this to determine incrementality, or the percentage of the test group that converted due to the campaign. In this example, those 5 additional purchases made up 20% of Group B’s total purchases.

But how do you make sense of this?

Now we can calculate whether the total spend associated with the campaign is worth those 5 additional purchases. This means taking the full cost of the campaign and only dividing by those purchases to determine cost of acquisition (rather than dividing by the full 25 purchases since 20 of those purchases would’ve happened without that campaign).

So even though there is a positive incremental lift, if the cost of the campaign is too high, it may not justify continued investment.

However, there are times when you’ll see a neutral or negative lift (do you even call it a lift in that case?)

A neutral lift means that your campaign is generating sales, but isn’t driving incremental value. In this case, you should consider changing your creative or updating your targeting to generate a positive lift.

Occasionally, you might see a negative incremental lift. While this isn’t common, it’s still possible. For example, an overly aggressive retargeting campaign could turn off users. A more common occurrence, your paid marketing efforts may cannibalize organic performance. 

Let’s look at one more example to really bring things home.

Let’s say Group A (the control group) made 10 purchases and Group B (the testing group) made 30 purchases. This would show a 200% incremental lift and 66% incrementality.

Based on this, we can see that our incremental users are very likely to make a purchase, meaning that ad spend would be better used targeting those users.

The benefits of incrementality testing cannot be overstated. It is the single most accurate way to deduce the actual cost of acquired users and it can also prevent you from cannibalizing your organic traffic

I could drone on and on about this, but we’ve covered the basics and that’s the important part. I’ll leave you with a brief glossary of incrementality-related terms for you to refer back to whenever you want.

  • Incremental lift: The positive effect a campaign had that would not have occurred without the target variable

  • Organic cannibalization: Events/installs that would’ve occurred even without the marketing initiative.

  • Incremental value: The efficiency of your campaign based on driving unique results

  • Confidence interval: The range of expected values if no changes were made to the marketing initiative.

  • Incremental Return on Ad Spend: A metric that quantifies the additional revenue generated from advertising efforts compared to a baseline.

Now let’s get into some fun stuff…

What We’re Reading This Week

Campaign of the Week

Childhood legend, Kraft Heinz just launched a fresh campaign for Lunchables Dunkables pitting kids’ imaginations (what they call K.I.)  against artificial intelligence (A.I.)

The campaign will prompt children to create Dunkables-related artwork based on specific prompts (ex. Imagine our Dunkables Mozza Sticks or Pretzel Twists as something fantastical) to show that children can conjure ideas that AI could not imagine.

While spanning video and paid social, pop-up exhibits in Los Angeles and Austin will feature the Dunkables-themed artwork from both children and AI. 

As part of this campaign, Lunchables also announced its first Head of Imagination position. Kids ages 5-13 will submit their idea using the same Dunkables prompt with the winner receiving an all expenses-paid trip to Chicago to spend a day at the Lunchables HQ to participate in “imagination sessions.”

Vendor of the Week

The mobile experience is everything in the e-comm world and Tapcart is on a mission to make mobile shopping easy, fun and attainable for everyone.

Tapcart is a mobile app builder that enables brands to build custom, hand-crafted experiences via their enterprise-grade mobile app capabilities. You can quickly turn your Shopify store into a native mobile app, send unlimited push notifications, and even add custom QR code widgets to your store.

Tapcart boasts an impressive suite of developer tools, custom blocks, and documentation that will give your developers the head start they need. Plus, with an extensive network of ecosystem partners, you never have to worry about how it will integrate with the rest of your tech stack.

Build the highest-performing mobile customer journey faster—with lower investment and total cost of ownership.

Want To Work With Us?

Click below to learn more about our services and how we can send your brand into hyperdrive!