When it comes to their ad spend in retail media, CPG companies have two primary questions:
- Did my media investment drive incremental impact for my brand and/or product(s) with this retailer?
- Was my investment worth it?
Incrementality is the key to answering these questions.
The power of incrementality
Think of incrementality as one level deeper than standard closed-loop attribution. With closed-loop attribution, you can track the full customer journey—from seeing an ad to purchasing a particular product online or in a store. However, you are unable to deduce if sales were truly incremental from what would have been driven normally.
Albertsons Media Collective’s incrementality methodology allows marketers to measure the causal effect of their retail media spend. This means statistical significance can be used to show that a specific campaign was the sole reason for any incremental lift.
Several factors can impact ad performance, such as audience targeting, creative execution, messaging, channel mix, time of year and other circumstances. Reaching the right shopper requires a blend of art and science, as well as delivering the right message at the right time to influence purchase behavior.
Without these factors, attaining the desired behavior and driving incremental impact will be nearly impossible. Incrementality, ultimately, is a result of a change in shopper behavior.
Solving the media investment puzzle
Think of your retail media campaign results as putting together a challenging jigsaw puzzle. First, you build the outer frame with the media metrics. They tell you what was delivered and if the shopper engaged with the ad. Next, you start to fill in the middle section with closed-loop attribution metrics—like attributed sales and return on ad spend (ROAS)—which provide more detail about whether the shopper purchased after seeing the ad. Now, you can start to see a portion of the full picture.
Incrementality is the final piece that completes the puzzle because it helps to answer the initial questions above: “Did my media investment drive incremental impact for my brand or product within this retailer?” and “Was my investment worth it?” All these available metrics work together to solve the puzzle of what happened with your ad campaign.
After the puzzle is solved, it is important to evaluate which of the factors may have influenced shopper behavior, and why, before determining how to use these insights to optimize your future campaigns.
CPG companies should use incrementality consistently to validate their retail media investment. The key is to lean into test-and-learn opportunities to better understand what factors drive the causal effect of your campaigns, like testing different types of messaging in your ads to see what resonates best with your target audiences. These opportunities should be strategically planned to ensure they deliver the data you need them to.
Incrementality allows CPG companies to show a campaign’s impact and drive change in shopper behavior, making it a worthwhile investment.
