How to Run Incrementality Tests That Prove Your Ad Spend Is Not Wasted
Are your ads actually driving incremental conversions? Here's how to run holdout tests that prove true ad impact.
Attribution models tell you which ad got credit for a conversion. Incrementality tests tell you whether the conversion would have happened without the ad. The difference is critical for budget allocation decisions.
The incrementality testing methodology uses geographic or audience-based holdout groups. For geographic tests, pause ads in a subset of markets and compare conversion rates to markets where ads continue running. For audience tests, exclude a random subset of your target audience and compare conversion rates between exposed and unexposed groups.
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We cover the test design process (selecting holdout regions or audience splits), the minimum test duration for statistical significance, the analysis methodology that accounts for baseline differences, and how to calculate the true incremental CPA and ROAS that inform budget decisions. Most companies discover that 20-40% of their attributed conversions would have happened organically.
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