To your surprise, up to 40% of the money being spent in advertising through mobile app marketing could be for users who would install the app irrespective of the cost. This shows why incremental testing is crucial to ensure that every dollar spent on marketing is effective. By implementing incrementality testing, user acquisition managers can maximize return on advertising spend (ROAS) and make data-driven decisions to optimize campaigns.
What is Incrementality? A Clear Definition
Incrementality in mobile game advertising is all about figuring out the real impact of your ads. It’s not just about how many installs or purchases you’re seeing—it’s about understanding how much of that is actually because of your ads. It’s a way to measure what’s genuinely being added by your advertising efforts. For example, in a scenario where a mobile ad campaign yields 10,000 installs, only 3,000 of these were preventable, and then the actual number of additional installs would be 7,000. In simple terms, incrementality helps marketers answer a critical question: “Can 70-80% of this growth be attributed to our marketing alone?”
Why Incrementality Matters in Mobile Games and App Marketing
When there are millions and millions of apps out there challenging each other, especially in the mobile gaming segment, knowledge of incrementality is key. It controls the budget for marketing, excluding unnecessary strategies that might annoy organic users or waste money on ads that don’t bring real results.
Consider the following example:
- Game Segment: Hyper-casual mobile games.
- Marketing Spend: $50,000.
- New Installs: 20,000.
- Incremental Installs (via incrementality testing): 12,000.
Formula for CPII:
Calculation:
- Cost Per Incremental Install (CPII): $4.17.
Without incrementality testing, the CPI might seem to be $2.50 (total installs divided by spend). However, the true efficiency can be calculated only with the help of CPII (Cost Per Incremental Install), which will indicate the directions for further improvements of the campaign.
Incrementality Testing: How It Works
Incrementality testing is particularly useful for understanding the success of particular campaigns, individual pieces of creative content, or given channels. This is often done using experimental methods including random sampling or matched control groups based on variables like gender.
- Split Testing: Take your audience and split them into two – those who saw the campaign (the ‘experiment’ group) and those who did not (the ‘control’ group). Compare the outcomes.
Example: An interactive rewarded video ad campaign for a puzzle game. The test group proves to be 15 percent higher than the control group meaning that 15 percent of the installs are new installs.
- Geo-Testing: Geo-Testing in Mobile Gaming Ads:
Geo-testing is a powerful tool for understanding how a marketing campaign impacts players in specific regions. It divides a geographic area into two groups: a test group (where the campaign runs) and a control group (where it doesn’t). This allows marketers to measure the incremental effect of the campaign, such as boosts in game installs, session durations, or in-app purchases. In gaming, geo-testing can reveal how different regions respond to factors like ad creatives, incentives, or event promotions. It’s especially useful for optimizing campaigns based on player preferences, ensuring the best ROI.
Example: Testing an ad campaign for a multiplayer card game in Southeast Asia versus Europe to see which region shows higher engagement and in-app purchases, helping refine strategies like reward types or event timings.
- Intent-to-Treat (ITT) Analysis: ITT analysis measures how exposure to a campaign impacts all players, even if some don't fully engage. This method includes all participants in the analysis, regardless of whether they played the game as intended or dropped out, offering a more realistic view of the campaign's effect. ITT is useful for understanding the overall impact, as not every player follows the campaign perfectly. In contrast, Per-Protocol Analysis only includes participants who strictly followed the study protocol. This can sometimes overestimate the treatment’s effectiveness since it doesn’t account for those who didn’t comply.
Example: A campaign promoting a new mobile game feature is tested across a group of players. ITT shows the overall impact, including those who didn’t interact with the feature.
The Role of Incrementality in Revenue and Margins
The second concept affecting installs is the role of incrementality in revenue and margins. Calculating incremental revenue helps verify that you are driving app downloads and also encouraging monetization.
Consider this scenario:
- Campaign Spend: $100,000.
- Total Revenue: $150,000.
- Incremental Revenue (directly tied to the campaign): $80,000.
- Incremental Margin: $80,000 – $100,000 = -$20,000.
This negative margin indicates that marketing is wasteful and encourages marketers to make creatives, audiences or bids more efficient. Thus, by concentrating on small increases, marketers will be able to define areas where they can optimize ROAS with the help of reducing unnecessary expenses.
Incrementality in Marketing: Creative Insights Drive Results
Creative Insights reveal ad creatives' impact on the incrementality of Mobile Game ads. High-quality and contextually appropriate creatives can significantly enhance Click-Through-Rates.
- Rewarded Video Ads: When it comes to incrementality, rewarded ads are especially interesting because they drive measurable actions. For example, if a player only makes a purchase or spends more time in the game after engaging with a rewarded ad, you can attribute that behaviour directly to the ad. Incrementality testing proves that such advertisements lead to new installations instead of advertising your game to customers already using your app.
- Playable Ads: Having people engage with a snippet of the game before downloading the full app usually results in more engagement as well as incremental downloads.
- Personalized Campaigns: Dynamic creatives aligned with a user’s interests (e.g., preferred type of game) can result in relatively higher incrementality.
Real-World Case Study: Incrementality Testing for Clash of Clans
A well-known mobile strategy game, Clash of Clans, ran incrementality tests to refine its user acquisition campaigns across multiple platforms:
- Objective: Maximize installs while ensuring high-value players were targeted.
- Testing Approach: Geo-testing was used to compare regions where ads were displayed with regions where ads were withheld.
- Findings:
- Campaigns on social media platforms showed a better incrementality rate, meaning only one in four installs was directly attributable to the ads.
- In contrast, programmatic ad buys targeting players of similar games showed a half-less incrementality rate, significantly outperforming social media campaigns.
Actionable Outcome: Clash of Clans reallocated its ad budget strategically from social media to programmatic platforms, leading to a significant increase in incremental installs and a boost in player lifetime value over three months.
Why Incrementality is Non-Negotiable in Mobile Marketing
At a time when marketing budgets are under pressure and acquisition costs continue to rise, incrementality testing offers a clear path to optimization. It addresses the fundamental question everyone from a user acquisition manager to a CMO struggles with: "What truly works?" By pinpointing the impact of each campaign, incrementality testing provides the insights needed to make smarter, more effective marketing decisions.
By understanding and implementing incrementality testing, mobile game marketers can:
- Decide which channels, campaigns, or creatives truly contribute to growth. Define incrementality of your games without which the definition of growth remains vague.
- Maximise the marketing efforts to get a better return on investments and increase incremental sales.
- Ensure the budget reasons are well explained and backed by data.
Key Takeaways: Applying Incrementality Insights Tomorrow
Start Testing: Adjust incrementality tests by refining control/test groups, varying campaign parameters, and analysing incremental effects on key metrics to identify the true growth drivers.
Focus on Metrics: Isolate incremental installation, incremental revenues, and incremental margin rather than focusing on the end results.
Refine Creatives: When it comes to incremental performance, try rewarded videos, playable ads, and other content pieces to drive the best results.
Monitor Data: Leverage Segwise for forecasting the ROAS and automate campaign monitoring across all ad networks.
When you consider these factors as a foundation for your mobile marketing approach, you will be able to build the foundation for constant, gradual growth in a highly competitive domain. In the dynamic world of mobile games, it can be seen that it is the small incremental growth that results in giant leaps forward.
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FAQs:
1. What is the difference between incrementality and attribution?
Attribution is the process of discovering which channel or campaign led to a conversion. The second one, incrementality, is aimed at reflecting the extra conversions that specific channels provide compared to non-paid traffic and that those conversions do not overlap with the organic ones.
2. How can incrementality be measured in real-time?
Actual incremental app installations and revenues can be tracked in real-time using Segwise or predictive analytics platforms while incrementality testing commonly involves carrying out experiments.
3. Are certain ad formats better for driving incrementality in gaming?
Yes, formats like rewarded video ads and playable ads are usually good for generating incremental growth as they are useful to the user while prompting the installation.
4. Can incrementality testing help reduce ad spend?
Absolutely. This way, marketers can get rid of ineffective channels and allocate their budgets to further the approaches with actual incremental sales growth.
5. How often should incrementality testing be conducted?
It depends on the campaign goals and objectives, though testing should be done all the time or at least be done for major campaigns to ensure that strategies are continually tweaked over time.
