I hope you’re doing well! Following up on our recent discussion about optimisation models and driving incremental growth, I wanted to share insights on how to plan, monitor, and leverage your backend data to ensure sustainable growth for your brand.

At the core of successful growth is ensuring that your incremental media buying efforts are accurately measured and evaluated. This requires focused attention in three key areas: establishing a single source of truth, identifying a clear North Star goal, and aligning all media channels with these standards. Additionally, we’ll discuss why relying solely on in-platform ROAS (Return on Ad Spend) can be misleading and why incremental testing is crucial for understanding the true value each channel provides.

1. Establish a Single Source of Truth

When scaling your brand, it’s essential to have a reliable, unified source of data that you can trust. A single source of truth ensures consistency in reporting across all channels and allows for accurate measurement of the incremental value delivered by your campaigns.

Key Benefits:

  • Eliminates Conflicting Data: Using multiple tools for measurement can lead to discrepancies, making it difficult to assess the real impact of your campaigns. A single source of truth removes this ambiguity, ensuring all stakeholders are working with the same, reliable data.
  • Better Decision-Making: Clean, consistent data allows you to make well-informed decisions about optimising your media spend and driving incremental growth.
  • Seamless Reporting: A unified data source simplifies reporting, making it easier to compare performance across different channels, a vital component of effective campaign analysis.

Actionable Strategy:

Integrate backend sales data with advertising data to ensure every action contributes to measurable business outcomes. This alignment between backend and marketing efforts is crucial for identifying and driving incremental value.

2. Identify Your North Star Goal

Your North Star goal serves as the guiding metric for all media efforts. It’s not just a revenue target or a vanity metric; it’s a reflection of long-term growth for your brand. This goal could represent customer lifetime value (CLTV), repeat purchase rate, or a specific profit margin.

How to Use Your North Star Goal:

  • Track Progress Regularly: Use your single source of truth to measure how your media efforts are contributing to this goal. Regular tracking ensures all teams and channels are aligned towards the same outcome.
  • Align Incremental Growth: Every campaign should be evaluated based on how it moves your brand closer to this goal. For instance, if your North Star is CLTV, measure how ad spend impacts not only immediate conversions but long-term customer retention and repeat purchases.
  • Prioritise Long-Term Success: Focus on strategies that drive sustainable growth. Short- term wins can be tempting, but aligning with your North Star goal ensures long-term profitability and scalability.

Actionable Strategy:

Ensure all campaigns are assessed based on their contribution to your North Star goal, tracking incremental performance through data-backed insights.

Live example:

– For a health/wellness client of ours with a subscription product and a 300% increase in LTV within 3 months of first purchase, our north star is NCPA. This is the holy grail metric, upon which all decisions are made. With every single change, we ask on a weekly basis: “How did this change affect our NCPA?”

– Moving spend to a new channel – How did this affect our overall NCPA?
– Increasing number of weekly email campaigns – How did this affect our overall NCPA?
– Scaling meta spend by 30% – How did this affect our overall NCPA?

Having too many north star metrics creates confusion when deciding if changes have had a positive impact or not.

3. Why In-Platform ROAS Should Not Dictate Business Decisions

While ROAS is a common metric for assessing ad performance, relying solely on in-platform ROAS can lead to misleading conclusions. Here’s why:

Key Issues with ROAS:

  • ROAS Can Be Misleading: Platforms like Facebook and Google track and report ROAS based on direct interactions they can measure. However, this can create attribution bias, as they may claim credit for conversions influenced by other channels. A high in-platform ROAS does not necessarily indicate true incremental growth.
  • Double Attribution: Multiple platforms may claim credit for the same conversion. For example, if a customer interacts with both Facebook and Google before making a purchase, both platforms might take credit, leading to inflated results.
  • Incrementality is Key: The best way to measure true channel performance is by running incrementality tests. These tests determine how much additional value a channel provides that wouldn’t have occurred without the ad spend, giving a clear picture of real growth.
  • ROAS is a ‘revenue’ metric, and not a ‘profit’ metric. It doesn’t take into account your transaction fees/ COGS/ fulfilment fees/ returns etc so without context, it doesn’t actually mean that much…
  • ROAS does not equal GROWTH. By using ROAS as a north star metric, it’s very easy to start making ad account decisions which do not align with the company’s goal of profitable revenue growth. IE, spending more on bottom of funnel/ retargeting,

Why Incrementality Testing Matters:

  • Prove Real Growth: Incrementality testing, through methods like A/B testing with control groups, reveals whether media spend is driving actual growth.
  • Use ROAS as a Guide, Not the Final Decision: ROAS can still help understand campaign efficiency, but decisions should be based on incremental value, ensuring every pound spent drives sustainable, long-term growth.

Actionable Strategy:

Run incrementality tests regularly to evaluate the real impact of your media channels and ensure that each contributes to your North Star goal.

4. Monitor Incremental Value Across Media Channels

Not all media buying efforts deliver the same value. To optimise growth, it’s important to assess the incremental contribution of each media channel, particularly when measured against your North Star goal.

How to Monitor Incremental Growth:

  • Channel-Level Analysis: Dive deep into backend data to evaluate how each channel performs in driving high-value, long-term customers. This will help determine where to increase spend and where to optimise.
  • Focus on Quality of Conversions: Incremental growth is about quality, not just quantity. Go beyond immediate conversions and assess whether a channel brings in customers likely to contribute to long-term growth.
  • Be Agile: Incremental insights allow for real-time optimisation. Adapt your media spend and strategies based on the most current data to maximise efficiency and reduce waste.

Actionable Strategy:

Continuously monitor incremental performance across channels, adjusting strategies and spend to focus on areas delivering the greatest long-term value.

Conclusion

By establishing a single source of truth, setting a clear North Star goal, and regularly monitoring incremental value across media channels, you can drive sustainable growth for your brand. Remember, in-platform ROAS should serve as a guide, not the sole basis for decision-making. Instead, focus on incrementality testing to prove that each channel is contributing real, measurable growth.

Let’s schedule a follow-up to review your current data and discuss how we can align your media efforts with these strategies. Together, we can ensure every pound spent is contributing to meaningful, long-term success for your brand.