Incrementality has always been the holy grail of retail media. But lately, it’s taken on greater importance as ad budgets are squeezed and retail media networks (RMNs) fight for their share of ad dollars.

• "The name of the game today seems to be incrementality," said Jonathan Fasano, business development director at Walmart Connect Mexico and Central America, during a recent EMARKETER Summit on commerce media.
• By quantifying the additional lift driven solely by an ad campaign—be it conversions, revenue, or customer acquisition—incrementality gives marketers the insights needed to allocate budgets more effectively.

However, over a third (36%) of consumer packaged goods (CPG) brand marketers and agency professionals say they’ve had difficulty proving investment incrementality, according to The State of Retail Media report from Skai and Path to Purchase.

• 44% cite concerns about the accuracy or reliability of incrementality results, the top challenge cited by respondents.
• Other challenges include applying incrementality across ad types/targeting methods/retailers (43%), limited tools or technologies (41%), and a lack of standardization (37%).

It doesn’t help that marketers aren’t completely aligned on what incrementality actually means.

• The most commonly accepted definitions are “ad attributed conversions of new-to-brand customers” and “serving ads where my products aren't already showing up in organic results,” each cited by 48% of CPG brand marketers/agencies per Skai and Path to Purchase data.
• But other definitions include showing a product ad when a customer is shopping on a competitor’s page, showing an ad to a customer who hasn’t purchased that product before, and serving ads to customers when they are likely to repurchase.

To navigate these challenges, advertisers and agencies are employing a variety of strategic tactics, including:

1. Data clean rooms

Data clean rooms enable brands to identify where their investments are most effective.

• “One of our biggest wins with data clean rooms is when we use it as a baseline to inform channel investment,” said Kavita Cariapa, senior vice president, head of commerce activation at Dentsu, during an IAB roundtable discussion.
• With clean rooms, Dentsu can advise its clients where there are incrementality opportunities or where they should prioritize their share on the shelf.

2. Advanced measurement tactics

Multitouch attribution (MTA) or marketing mix modeling (MMM) can also help marketers measure incrementality.

• “We’re suggesting our clients build up their measurement approaches,” said Dane Buchanan, chief data and analytics officer at M&C Saatchi Performance. “The performance world is shifting toward incrementality. And one of the main ways we’re doing that is through media mix modeling (MMM). It doesn’t solve for everything, but it helps marketers understand where they should be investing more or less.”
• 49% of marketers worldwide currently use MMM to measure their marketing results, according to September 2024 data from Supermetrics.

3. Third-party partners

Only 26% of in-house marketers worldwide conduct incrementality testing in-house, according to April 2024 data from Funnel and Ravn Research.

• That’s why RMNs like Gopuff are turning to third-party partners to boost incrementality measurement.
• Gopuff is working with retail media tech provider Koddi on a new tool that tracks incremental conversions, incremental revenue, and incremental ROAS.
• In a pilot program, the tool enabled advertisers to achieve a 40% lift in incremental purchases per user.

The bottom line: Despite current friction, the direction of travel is clear: incrementality is becoming a mainstream expectation.

• While only 8% of marketers worldwide use incrementality testing to measure their marketing results, per Supermetrics, half of brand marketers worldwide say controlled experiments (like incrementality or lift tests) will become more important over the next two years, according to October 2024 data from Econsultancy.

To stay competitive, RMNs should help advertisers overcome any current barriers to measuring incrementality while delivering more sophisticated KPIs to like new-to-brand and new-to-category buyers.

"Retail media needs to evolve always ahead of the brands and agencies to set that packet of new KPIs that continue proving the incrementality we can drive," said Fasano.

This was originally featured in the Retail Media Weekly newsletter. For more marketing insights, statistics, and trends, subscribe here.