One of our primary goals here on the AdRoll blog is to keep our readers up to speed on all things retargeting. That’s why we’re super excited about our new, bi-monthly, educational video series, ‘The Honor Roll’, where we’ll cover topics in online advertising and retargeting, and answer any questions you may have. Whether your question is basic, highly technical, specific to the AdRoll platform or not, we’re up for the challenge.
Moving forward, you can submit your questions to email@example.com. Make sure to stay tuned to the blog to see if your question makes The Honor Roll!
First up, our president, Adam Berke, takes to the white board to explain how incrementality tests work, a frequently asked question in retargeting.
Okay. Welcome to The Honor Roll. I’m Adam Berke, and today we’re going to walk through incrementality test, what they are and why they’re important. So everybody knows that if you did no retargeting, some percent of users who leave your site would come back on their own. They would remember, they would do a search, they would come back what we call “organically.” They would do it without any intervention.
What an incrementality test lets you do is measure the actual effect that the retargetting has above and beyond what would have happened if you didn’t do any retargetting, and then the way that you set up and optimize a campaign to deliver optimal incrementality is different than if you were optimizing a campaign just for the lowest CPC or the lowest CPA.
So let me show you how it works with AdRoll. So with your existing smart pixel, that you placed across your site, AdRoll can randomly select people to be put into two different groups. A percent of people will be put into an A group, and a different percent of people will be put into a B group. So this might be 90% of your users, and then a randomly selected 10% will be put into a B group, which is what we’ll call the control group.
So to the A group, we’ll serve your retargeting ads as we normally would. So we serve these folks retargeting ads, and then we’ll be able to measure what percent of these people came back to complete a certain action. And then, to the B group, instead of serving retargeting ads, we’ll serve what we call control ads, and those are PSA ads for maybe disaster relief, Smokey the Bear, something along those lines that doesn’t have to do with your brand. And then we can measure the return conversion rate of people who saw the control ads. So this is effectively the group of people that would have converted if you had done no retargeting at all.
Then we can compare the two conversion rates between the groups that was retargeted and the group that wasn’t and see the actual lift. In this case, we got 2% more, which is equal to a 25% lift in your conversion rate. And that is the true impact of the retargeting campaign. No matter what the CPC is, CPA, or anything else, this is the true net impact of a retargeting campaign. And that’s why an incrementality test is often very useful to figure out the lift that you’re actually getting from retargeting and how to set up your campaign and make sure you’re getting lift and not just converting the low hanging fruit that would have come back on their own.
So thanks for joining us in The Honor Roll. Signing off.