This episode dives into how to optimize your ecommerce growth plan by focusing on incrementality. It outlines three critical questions for maximizing profitability and offers a framework for allocating budgets across channels and tactics to achieve the most incremental outcomes. The hosts emphasize the importance of understanding the true impact of your marketing spend beyond last-click attribution.
Key takeaways
Implement incrementality testing (geo holdout, inverse holdout, or scale tests) to accurately measure the true ROI of your various marketing channels and tactics, moving beyond platform-reported ROAS.
Utilize a system that connects budget allocation from a top-down profitability model (like the discussed spin-a-mirror model) with daily, campaign-level media plans to ensure alignment with business objectives.
For existing channels, prioritize inverse holdout tests to determine the current incremental contribution of your marketing efforts and adjust budget allocation accordingly.
Focus on understanding your true incremental ROAS for each channel to set accurate ROAS targets and optimize budget distribution, ensuring each dollar spent generates additional profit.
Consider the three core questions for a predictable and profitable e-commerce growth plan: what should your total budget be, how should it be allocated incrementally, and what is the daily campaign-level media plan.
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.
Frequently asked about this episode
What does this episode say about paid acquisition?
Implement incrementality testing (geo holdout, inverse holdout, or scale tests) to accurately measure the true ROI of your various marketing channels and tactics, moving beyond platform-reported ROAS.
What does this episode say about analytics & attribution?
Utilize a system that connects budget allocation from a top-down profitability model (like the discussed spin-a-mirror model) with daily, campaign-level media plans to ensure alignment with business objectives.
What does this episode say about dtc strategy?
For existing channels, prioritize inverse holdout tests to determine the current incremental contribution of your marketing efforts and adjust budget allocation accordingly.
What does this episode say about paid acquisition?
Focus on understanding your true incremental ROAS for each channel to set accurate ROAS targets and optimize budget distribution, ensuring each dollar spent generates additional profit.
What does this episode say about paid acquisition?
Consider the three core questions for a predictable and profitable e-commerce growth plan: what should your total budget be, how should it be allocated incrementally, and what is the daily campaign-level media plan.
