Incrementality 101: Understanding incrementality to optimize affiliate partnerships

Different brands have varying definitions of incrementality. The impact.com team typically defines incrementality as an event or desired outcome happening solely because of the contribution from a marketing channel or partner. 

In the current macroeconomic climate of increased competition and rising ad costs, brands feel pressured to deliver marketing efficiency and prove a return on investment. These challenges shift spending toward measurable digital channels such as affiliate partnerships.

The role conversion paths play in understanding incrementality

Modern shoppers [81 percent] rely on research from multiple trusted online sources before purchasing—expanding the conversion path. 

A conversion path is a customer’s click journey to complete a desired action, such as making a purchase or installing an app. Each interaction—listening to podcaster recommendations, reading review sites, or opening an email—creates a unique touchpoint along the buyer journey.

Analyzing individual conversion path touchpoints helps brands understand and improve incrementality. They create a visual narrative of how various channels or partners interact to contribute toward a consumer conversion event—completing an order, installing an app, or subscribing to a newsletter. It also highlights how customers discover, research, purchase, and interact.

3 winning strategies to gain deeper insights to improve incrementality

The challenges with cross-channel measurement and skepticism around incremental value makes it difficult to secure marketing spend for partnerships channel. Roughly 43 percent of brands say measuring partnerships program performance and understanding the incremental value each partner brings to their business is a top pain point.

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1. Use innovative tracking tools

Partnership platforms with tracking features such as end-to-end tracking and cross-channel measurement help overcome the investment hurdle. These tools give brands access to the insights needed to clarify the effectiveness of channels and partners to prove value.

Additionally, cross-channel tracking allows brands to deduplicate redundant spending between channels. When you track across all channels in real-time, brands ensure only one channel gets credit for a given conversion event and avoid double paying. Deduplicating spend eliminates costs that don’t provide value—allowing more significant investment with a higher return.

2. Get a precise picture with reporting features

Setting a foundation of comprehensive tracking is the only way to gain an accurate view from reporting—after all, a brand can only report on what it tracks. If it’s not tracking everything, then even the best reports will cause brands to make decisions based on partial data. 

Reporting tools like Aggregate Cross-Channel Reporting help brands see the complete picture. Brands gain a deeper understanding of partner and channel performance that contribute to the conversion, providing an overview of the value provided and ways to optimize for success. 

Insights from Contribution Reports provide an identifying visual for how different channels interact. It also shows when a marketing channel acts as an introducer, influencer, and closer— and how often it gets credited for its actions. The report also indicates when a partner or channel is the sole contributor in the conversion path, emphasizing its incremental value as the conversion wouldn’t have occurred without them.

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This data proves the partnerships channel incrementality. The report can also be filtered at the partner level, helping brands understand the incrementality of individual partners in their programs.

Other reports, like the Leapfrogging Summary Report, can help address some of the challenges of the last-click attribution model. Leapfrogging refers to when a partner “hijacks” another partner’s conversion during the last stage of the customer’s conversion path, causing the partner that played a crucial role in the conversion to lose out on the associated commission.

The Leapfrogging Summary Report looks at the final partner interactions in a conversion path within a specified time window. These insights allow brands to make more informed decisions when tuning their program’s crediting rules and commission structure.

3. Adjust commission based on value

Insights from tracking reports help brands develop a commission strategy based on a partner’s unique contribution. They can also facilitate data-driven conversations with partners around commission changes. The data help ensure efficient spending and justify your partnerships strategy with informed decisions. 

For example, a brand can identify a partner that often contributes along the conversion path but doesn’t receive credit because of last-click attribution. Conversely, it can pinpoint a partner that doesn’t contribute often but “wins” a significant amount of time—signaling an over-compensation for its value. Brands can overcome these challenges by aligning payouts to value with Dynamic Payouts or offering Participation Bonuses to reward all contributions.

Drive confident decisions by understanding incrementality

The full picture of digital marketing channel interactions allows marketers to optimize efforts while ensuring incrementality significantly. 

Learn more impact.com resources to help you build clarity around the true value of your partnership program to drive confident decisions and incremental value. 

• What is affiliate tracking? The basics for publishers [blog]