How are incrementality experiments different from A/B experiments?

Analysis of Correct Answer(s)

This option is correct because the primary purpose of an incrementality experiment (also known as a lift study) is to measure the causal effect of your advertising. It answers the fundamental question: "How many conversions happened only because people saw my ads?"

• It isolates the true impact of an ad campaign by comparing a group that sees the ads (test group) with a statistically similar group that does not (the holdback or control group).
• The difference in conversion behavior between these two groups is the incremental lift, which directly measures the ad's influence on a consumer's decision to convert.

Analysis of Incorrect Options

• "They measure the relative effectiveness of different versions of a marketing campaign.": This is the definition of an A/B experiment. A/B tests compare the performance of ad version A against version B to see which one performs better. They optimize within a campaign, while incrementality measures the campaign's overall value.

• "They do not require a holdback group...": This is incorrect. A holdback group is the essential component of an incrementality experiment. Without a control group that is withheld from seeing the ads, it is impossible to measure the causal lift.

• "They typically require a smaller sample size...": This is generally false. To detect a statistically significant lift, incrementality experiments often require large sample sizes and robust statistical methods, making them more complex than many standard A/B tests.