As Australia faces ongoing economic pressures, brands are under more scrutiny than ever to ensure every dollar spent on advertising is pulling its weight. The days of prioritising sheer visibility are over – now it’s all about measuring true value.
This is where incremental measurement becomes indispensable, it empowers brands to see beyond surface-level metrics and determine the real return on their ad investments. With economic challenges knocking at the door, it’s time to focus on what really drives growth in this $15.6 billion internet advertising market, which has grown by 9.7 per cent in the last financial year, as reported by IAB in their 2024 March Quarter Australia Online Advertising Expenditure Report.
Economic Headwinds and the Need for Accountability
IAB reports that there has been a 4.2 per cent softening in spend in Q1 2024, from the preceding quarter, which is to be expected after the seasonal period. After this quarterly downturn, the Australian online advertising market still grew by 9.3 per cent, quarter-on-quarter. In this growingly competitive landscape, businesses simply can’t afford to invest in campaigns without knowing if they’re genuinely working.
Traditional models like ‘last-click’ attribution are outdated and miss the bigger picture, instead, brands should be homing in on incremental measurement – the practice of identifying conversions that wouldn’t have happened without their advertising efforts.
How often have we seen the inflated ROAS figures from different partners, only to realise the actual returns were far less? By measuring the lift in consumer engagement and purchases through test-and-control methodology, advertisers can finally cut through the noise and pinpoint what’s driving real results.
The Problem with Last-Click Attribution
For too long, last-click attribution has reigned supreme in digital marketing, but it’s a deeply flawed model, because giving full credit to the last touchpoint before conversion ignores the many other touchpoints that influence a customer’s decision which leads to misattributed successes and subpar optimisation strategies.
Incremental measurement flips this on its head, allowing brands to identify the additional value their campaigns are driving. It’s not about counting every conversion, but about understanding which ones can genuinely be attributed to marketing efforts. This holistic approach ensures that campaigns are optimised for real impact, not just for show, allowing marketers to truly guide decisions when building their channel strategy.
Optimising for Incremental Value
If businesses want to stay ahead, they need to focus on incremental return on ad spend (iROAS) rather than chasing vanity metrics. It’s time to stop crediting ads for conversions that were bound to happen anyway and start zeroing in on those that were truly influenced by the campaign. Brands that shift to this mindset will stretch their marketing dollars further and gain a competitive edge in an increasingly crowded space.
Capturing In-Store and Online Conversions
As consumer behaviour continues to evolve, blending digital and in-store interactions, it’s essential for brands to track both online and offline conversions. People don’t just shop in one channel anymore – they move between them seamlessly. Marketers who can measure the full spectrum of their campaigns, from the first digital interaction to the in-store purchase, will have a clear view of their advertising’s incremental impact.
In a world where every dollar counts, incremental measurement is no longer a “nice-to-have” – it’s essential. Brands that pivot away from last-click attribution and focus on incremental ROAS will be the ones best positioned to navigate these economic headwinds and come out on top.
Shane Hanby is a seasoned digital marketing executive known for his innovative strategies and leadership. With a background in media and advertising technology, he serves as the Managing Director for Australia and New Zealand at Epsilon.
