intermediate
5 min read
How Incrementality Testing Works
The methodology for measuring causal impact of advertising
The basic methodology:
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1. Define Your Target Audience
Example: Users that have traded on competing DEXs in the past 30 days
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2. Split the Audience
Test Group
Sees your ads (80% of eligible audience)
Control Group
Doesn't see your ads (20% of eligible audience)
Both groups should be identical in all other respects - same onchain behavior patterns, same activity levels, same characteristics.
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3. Run Campaign for Set Period
Typically 2-4 weeks to gather sufficient data
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4. Measure Conversions in Both Groups
- Test group: 1,000 conversions from 100,000 exposed users = 1% CR (conversion rate)
- Control group: 180 conversions from 20,000 unexposed users = 0.9% CR
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5. Calculate Incrementality
Calculation Example
Incremental lift = 1.0% - 0.9% = 0.1%
Incrementality rate = 0.1% / 1.0% = 10%
What This Means
This means only 10% of your attributed conversions were actually caused by ads. The other 90% would have happened organically.