Incrementality in Advertising for Business in Canada

The ROI You’re Missing: A Guide to Incrementality for Ontario Businesses

In Ontario’s bustling and competitive market, every dollar in your marketing budget counts. Incrementality in Advertising for Business in Canada. You’re running ads on Google, social media, and other platforms, and you see the clicks and conversions roll in. But here’s the billion-dollar question: did your ads cause those sales, or would they have happened anyway?

This is the central challenge that incrementality solves.

Incrementality is about measuring the true, causal impact of your advertising. It isolates the sales and conversions that happened only because a customer saw your ad. For any business in Ontario looking to optimize its budget and achieve real, sustainable growth, understanding incrementality isn’t just a tactic—it’s a necessity.

To help you grasp this crucial concept, we’ve answered the top five questions we hear from businesses across the province.

Top 5 Questions & Answers About Incrementality

1. What exactly is “incrementality” in advertising?

Incrementality is the measure of conversions that were a direct result of your advertising efforts. It separates the customers who converted because they saw your ad from those who would have purchased your product or service regardless (like loyal customers, those who found you through organic search, or those already committed to buying).

Think of it this way: A customer who was already on their way to your Toronto coffee shop sees a geofenced ad for it on their phone. When they buy a latte, was it the ad that caused the sale? Probably not. An incremental sale, however, is when someone in Hamilton who had never heard of your brand sees a compelling ad, clicks through, and places an online order for your coffee beans. That sale would not have happened without the ad.

2. How do you measure advertising incrementality?

The most reliable way to measure incrementality is through controlled experiments, often called lift studies. The process is scientific and straightforward:

• Control Group: A segment of your target audience is intentionally not shown your ad.
• Test Group: A similar segment of your audience is shown your ad.

After the campaign, you compare the conversion rates of both groups. The difference in conversions between the test group and the control group is your incremental lift.

Incremental Lift=(Conversion RateTest Group​)−(Conversion RateControl Group​)

This method removes guesswork and proves the direct causal effect of your ad spend.

3. Why is incrementality so important for businesses in a competitive market like Ontario?

In a dense and expensive market like the Greater Toronto Area (GTA) or the Ottawa region, ad space is costly and competition is fierce. Incrementality is critical for several reasons:

• Budget Optimization: It shows you which campaigns are just reaching existing customers and which are genuinely acquiring new ones. This allows you to stop wasting money on low-impact ads and reallocate your budget to channels that deliver true, incremental growth.
• Competitive Edge: While your competitors might be focused on vanity metrics like clicks or impressions, you gain a strategic advantage by focusing on what actually drives new revenue.
• Accurate ROI: It gives you a much truer picture of your Return on Ad Spend (ROAS), ensuring your investment decisions are based on solid data, not just correlation.

4. How is incrementality different from standard metrics like ROAS or CPA?

While related, they measure different things. Return on Ad Spend (ROAS) and Cost Per Acquisition (CPA) are efficiency metrics, but they can be misleading.

• ROAS/CPA: These metrics measure the total return or cost associated with a campaign. They often take credit for all conversions from people who clicked an ad, including those who would have bought from you anyway. For example, a high ROAS on a branded search campaign (when people google your company name) looks great, but its incrementality is often very low because those searchers were already looking for you.
• Incrementality: This metric provides context to your ROAS and CPA. It answers the “why” behind the numbers. A campaign might have a lower ROAS but high incrementality, meaning it’s incredibly effective at bringing in new business and is essential for growth. Conversely, a high-ROAS campaign with low incrementality might be a candidate for a budget reduction.

5. How does focusing on incrementality directly help my business increase sales?

Focusing on incrementality moves your marketing from an expense to a proven growth driver. Here’s how it directly boosts your sales:

1. Smarter Spending: By identifying and cutting campaigns with low incremental value, you free up cash to invest in campaigns that are proven to attract new customers who otherwise wouldn’t have found you.
2. Improved Targeting & Creative: Lift studies can reveal which audiences and ad creatives are most persuasive. This allows you to refine your messaging to resonate more powerfully with potential new customers, leading to higher conversion rates.
3. Sustainable Growth: Instead of just re-engaging the same customer pool, incrementality helps you build a strategy focused on true market expansion. You can confidently scale the campaigns that are expanding your customer base, leading to reliable and predictable long-term sales growth.

By moving beyond surface-level metrics, Ontario businesses can unlock the true power of their advertising and ensure every dollar spent is a dollar invested in real, measurable growth.