This episode dives into the critical concept of incrementality for ecommerce businesses, explaining how to move beyond platform-reported ROAS to truly understand the incremental impact of marketing spend. It introduces a three-question framework for profitable growth, focusing on optimal budget allocation across channels and the daily media planning required to achieve business objectives.
Key takeaways
Implement a three-question framework for budget allocation: 'What should my total budget be?', 'How should that budget be allocated across channels for the most incremental outcome?', and 'What is the campaign-level media plan and expected profit outcome for every single day?'
Define incrementality as a percentage applied to channel-attributed revenue and ROAS to understand the true impact of your marketing efforts.
Utilize structured tests like inverse holdouts (for existing channels) or geo holdouts (for new channels) to accurately determine the incremental contribution of each marketing channel and tactic.
Focus on understanding the true ROAS of your Meta acquisition campaigns by applying an incrementality percentage, moving beyond the 7-day click ROAS reported by the platform.
Recognize that a system that integrates total budget allocation, channel-level allocation, and a daily media plan is crucial for maximizing profitable ecommerce growth, as these elements are often siloed.
In this episode, Richard and Luke Austin go deep into the concept of incrementality. They discuss how CTC helps brands answer three critical questions for a predictable and profitable ecommerce growth plan: What should my total budget be to maximize profitability? How should this budget be allocated across channels for the most incremental outcome? What is the campaign-level media plan and expected profit outcome? Luke shares insights into CTC's partnership with Measured, a platform offering best-in-class incrementality testing and budget optimization tools. They explore real-world examples of how understanding incrementality can drastically shift budget allocations, leading to more efficient customer acquisition and better overall performance.
Show Notes: Particl’s exclusive 2-week free trial and a 20% discount off your first month using the code "CTC." http://Particl.com The Ecommerce Playbook mailbag is open — email us at podcast@commonthreadco.com to ask us any questions you might have about the world of ecomm.
What does this episode say about paid acquisition?
Implement a three-question framework for budget allocation: 'What should my total budget be?', 'How should that budget be allocated across channels for the most incremental outcome?', and 'What is the campaign-level media plan and expected profit outcome for every single day?'
What does this episode say about analytics & attribution?
Define incrementality as a percentage applied to channel-attributed revenue and ROAS to understand the true impact of your marketing efforts.
What does this episode say about dtc strategy?
Utilize structured tests like inverse holdouts (for existing channels) or geo holdouts (for new channels) to accurately determine the incremental contribution of each marketing channel and tactic.
What does this episode say about paid acquisition?
Focus on understanding the true ROAS of your Meta acquisition campaigns by applying an incrementality percentage, moving beyond the 7-day click ROAS reported by the platform.
What does this episode say about paid acquisition?
Recognize that a system that integrates total budget allocation, channel-level allocation, and a daily media plan is crucial for maximizing profitable ecommerce growth, as these elements are often siloed.
