SBP 030: Solving for Incrementality, with Avinash Kaushik
May 25, 2023
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Avinash Kaushik, Chief Strategy Officer at Croud, discusses the importance of choosing the right KPIs and avoiding vanity metrics in marketing. They explore the concept of incrementality and its value in justifying marketing budgets. They also emphasize the need for experimentation, collaboration, and measuring the incremental value of advertising dollars. Additionally, they discuss the significance of giving marketers additional budget to explore new ideas and strategies.
Incrementality enables marketers to measure the true impact of marketing efforts and understand their value.
Selecting the right KPIs is crucial, avoiding 'vanity metrics' and focusing on metrics that drive meaningful outcomes.
Businesses of all sizes can adopt an incremental mindset to assess marketing impact and make data-driven decisions.
Deep dives
Understanding Incrementality and its Importance
Incrementality is a concept in marketing that asks the question, 'What would happen if we fired everybody in marketing?' It aims to measure the true impact of marketing efforts and determine how many conversions or sales are truly incremental. Incrementality is important because it provides a clear understanding of the actual value marketing adds to a company's bottom line. It helps marketers establish what portion of their efforts are truly driving results and enables them to make informed decisions about budget allocation. By measuring incrementality, marketers can justify their marketing budgets and demonstrate the impact of their campaigns on business outcomes.
Challenges and Mistakes in Setting KPIs
Setting key performance indicators (KPIs) poses challenges and potential mistakes for marketers. One common mistake is focusing on 'activity metrics' rather than 'outcome metrics.' Activity metrics measure things like impressions and page views, while outcome metrics focus on conversion rates, revenue, and profit. It is essential to strike a balance between these metrics, ensuring that the right incentives are set for the marketing team. Another common mistake is getting enamored by 'vanity metrics,' which may not have any real impact on business success. Marketers should prioritize selecting KPIs that align with business goals and drive meaningful outcomes, helping to create a scorecard with a few key metrics that drive the right behavior.
Different Types of Incrementality Measurement
There are different types of incrementality measurement, including channel silo, cross-stack, and portfolio incrementality. Channel silo incrementality involves measuring the impact of specific channels, such as Facebook or Google, and determining the incremental value they bring. Cross-stack incrementality looks at multiple channels working together and measures the combined impact. Portfolio incrementality assesses the overall impact of all marketing efforts combined. Each type of incrementality measurement serves a specific purpose, and marketers can use different strategies and methods to measure and understand the effectiveness of their marketing efforts.
Applying Incrementality Concepts to Businesses of All Sizes
The concept of incrementality applies to businesses of all sizes, whether they are small startups or large enterprises. While the methods and tools used may vary depending on the budget and resources available, businesses can still adopt an incremental mindset and assess the true impact of their marketing efforts. Small businesses can focus on using attribution models within their digital platforms like Google Analytics to gain a better understanding of the value each channel brings. Medium-sized businesses can invest in conversion lift studies provided by platforms like Facebook to measure incrementality across different channels. Larger businesses can explore advanced measurement techniques like mix modeling to assess incrementality across their entire portfolio of marketing efforts. Regardless of size, embracing an incremental mindset allows businesses to make data-driven decisions, allocate budgets more effectively, and drive better results.
Importance of Experimentation and Collaboration
One of the main ideas discussed in the podcast is the importance of experimentation and collaboration for marketers. The speaker emphasizes the need for marketers to step out of their silos and interact with professionals from other departments within the company. By exploring different areas of marketing and learning from others, marketers can gain valuable insights and broaden their perspectives. This can lead to better decision-making and more effective marketing strategies. The speaker also advises marketers to follow industry experts, engage with newsletters, and take advantage of educational resources like online courses to continuously expand their knowledge.
Measuring Incrementality and Investing in Growth
Another key point highlighted in the podcast is the significance of measuring incrementality and investing in growth. The speaker stresses the importance of moving beyond vanity metrics and focusing on metrics that reflect true business impact. They discuss the concept of incrementality, which involves understanding the additional value or impact generated by marketing efforts. By conducting channel lift studies, measuring acquisition behavior and outcomes, and investing in data-driven models, marketers can gain valuable insights into the effectiveness of their marketing campaigns and make data-backed decisions. Additionally, the speaker encourages marketers to invest in themselves by taking formal courses, subscribing to newsletters from industry experts, and staying up-to-date with the latest trends and insights in marketing.
Welcome back to yet another episode of the Sleeping Barber Podcast. We're thrilled to have Avinash Kaushik, the Chief Strategy Officer at Croud, on our show today. With a background at Google and well-earned reputation for insightful digital perspectives, Avinash brings a wealth of knowledge in digital marketing, data science, and much more to our conversation.
In this enlightening episode, we navigate through a myriad of topics. We delve into the frequent pitfalls surrounding KPIs in marketing, scrutinize the limitations of traditional marketing funnels, and unpack the impactful concept of incrementality. Avinash offers an alternative approach that promises to enlighten your strategies.
Make sure to stick around until the end for a post-show chat with our hosts, Marc and V. Believe us when we say this episode is one you wouldn't want to pass up!
See, Think, Do, Care Framework: https://www.kaushik.net/avinash/see-think-do-care-win-content-marketing-measurement/
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The Sleeping Barber Podcast:
Follow our updates here: https://www.linkedin.com/company/sleeping-barber/
Get in touch with our hosts:
Marc Binkley: https://www.linkedin.com/in/marcbinkley/
Vassilis Douros: https://www.linkedin.com/in/vassilisdouros/
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Timestamps:
O:55 - Intro to Avinash Kaushik
3:38 - The 2 big measurement mistakes many marketers make about KPIs
9:44 - Traps that misguide marketers
14:48 - Why funnels idiodic and a what to use instead of them
20:48 - How to measure both short-term and long-term campaigns
25:26 - What is incrementality, why does it matter & how is it different from ROI?
30:20 - The ladder of awesomeness
33:30 - The shock of measuring incrementality
35:55 - Different types of incrementality
47:12 - Anybody can suck less, how any size company can use incrementality
51:48 - Customer curiosity & open mindedness makes marketers better
58:44 - What marketers need to learn
1:05:08 - Avinash’s career path to Croud
1:07:40 - How to find out more about Avinash
1:08:50 - Post pod discussion with V and Marc
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Where to listen
Apple Podcasts: https://podcasts.apple.com/us/podcast/sleeping-barber-podcast/id1609811324
Spotify: https://open.spotify.com/show/4v0kaM350zEY7X2VBuyfrF
Google Podcasts: https://podcasts.google.com/feed/aHR0cHM6Ly9hbmNob3IuZm0vcy84MWVjYWJhNC9wb2RjYXN0L3Jzcw
Youtube: https://www.youtube.com/@sleepingbarberpodcast
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