The Importance of Attribution and Incrementality in Marketing

Today we'd like to share an article on how attribution matters in marketing and a deep dive on the importance of two crucial terms that come into play in the marketing world: incrementality and attribution. Attribution refers to the process of linking two data points, such as clicks to installs or impressions to installs. On the other hand, incrementality focuses on measuring the actual effectiveness of advertising efforts.

Understanding Incrementality

Incrementality is a key concept that revolves around growth directly linked to specific marketing initiatives beyond the existing brand equity baseline. For example, it measures how much a particular channel, tactic, or overall campaign contributed to an increase in sales, newsletter sign-ups, and more. In some cases the music industry can achieve it around sales where proper systems are in place.

Exploring Attribution

Marketing attribution involves evaluating the touchpoints a consumer encounters throughout their journey to making a purchase decision.

Importance of Incrementality and Attribution

While both incrementality and attribution play critical roles in marketing, they can be challenging to implement across various industries, especially in the music industry. Some unique challenges arise, particularly when it comes to sales attribution. In cases where robust e-commerce systems are not in place, or when dealing with multiple markets and promoters, attributing sales to specific marketing efforts becomes difficult. The world of streaming consumption is equally obscure, raising questions about the true impact of paid advertising on music streaming.

This challenge extends beyond the music industry. Various digital marketing companies face similar hurdles. Consider this article from The Drum that talks about how marketers are navigating an ‘uncomfortably complex topic’ concerning attribution. In the article we learn that other industries also grapple with understanding what exactly to attribute and how to measure it effectively. Some experts have shared their insights:

Harry Daniel, technical marketing strategist, Rawnet: "With the sunset of GA3, we now turn our full undivided attention to GA4 and data-driven attribution modeling as standard in Google Analytics. Data-driven attribution constantly updates how it understands conversion probabilities based on assessing how likely specific user paths are to lead to a conversion or an exit. Data-driven attribution modeling also compares user data to randomized control trials, allowing it to understand and better calculate the conversion probability of different user paths."

Kevin Joyner, director of data strategy, Croud: "Our industry has a new-found respect for privacy choices, and a new-found… resignation when it comes to zealous, privacy-protecting browser and OS technologies. These disruptions have thrown conventional digital attribution out of the limelight and into an important, supporting role. The new magic word in measurement is 'incrementality.' Deservedly so, but as causal inference and machine learning models grab our imagination, there’s a more old-fashioned phrase that mustn’t be forgotten: business impact."

Conclusion

Attribution and incrementality are crucial aspects of marketing that provide valuable insights into the effectiveness of various strategies. While challenges exist, particularly in the music industry, other sectors also face similar obstacles. As technology and analytics continue to evolve, businesses and marketers must embrace these concepts to make informed decisions that drive business impact. By understanding the significance of attribution and incrementality, marketers can navigate the complexities of the digital landscape and optimize their efforts for success.