Online grocery brand rings up growth and protects margin

Achieve sustainable profitable growth and overcome double counting with Incremental's channel mix optimization solution.
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An online grocery brand looking to enter the market against giants turned to Incremental to boost growth without increasing ad spend. In this case study, we’ll examine two ways entrant brands can get more out of their advertising aimed at driving traffic to digital channels.

The opportunity:

In this case study, we will examine two ways entrant brands can get more growth from their budgets.

As digital-first brands begin to grow, they often find the effectiveness of further investments in retail media networks begin to plateau as they max out their capture of local demand within those retail channels. To find new buyers, they need to invest in additional media channels to develop a more full-funnel approach to driving traffic to these digital storefronts. The challenge in managing these is that most platforms struggle to capture the impact of advertising that happens off-platform. This can lead to under crediting upper funnel metrics and double counting as multiple channels touch a user on their path to purchase with each taking full credit. Channel mix optimization is about holistically looking at the impact of these investments across channels and optimizing the mix across them to achieve sustainable profitable growth.

Similar to the problem of optimizing their channel mix, as teams introduce new advertising platforms into their mix, isolating the impact of each individual campaign becomes increasingly difficult as potential buyers are more likely to be touched by multiple campaigns across multiple channels. To optimize campaigns towards incremental sales within such an environment a more robust measurement of campaign performance is needed.

The challenge:

Even before the pandemic, the brand was contending with a growing number of consumers placing their grocery orders online. During the pandemic, online grocery delivery and pickup experienced a step change in growth which propelled their sales BOPIS growth as well. However, as larger competitors began to increase their investment in retail media across these ecommerce marketplaces driving up CPC, growth for the brand began to stall and concerns about the ROI of their existing advertising spend began to rise. To return the brand to growth they needed to drive more sales with their existing advertising budget WITHOUT increasing their overall investment in advertising.  

The solution:

To right-size its mix of investments across channels driving traffic to digital marketplaces, the brand leverages Incremental Retail Media Measurement suite. The model controlled for external factors like seasonality, promotion, and macroeconomics and isolated the impact of each media channel to provide a holistic view of how each investment was driving growth for the company.

The results indicated that the brand was under-invested in upper funnel channels like YouTube and could improve the overall ROI of its advertising budget by reallocating some media spend to YouTube and broader category terms within their retail media spend.

Similarly, they had difficulty tracking campaign-level performance; they leverage multiple buying platforms across the different media channels each providing their own reporting. This made it difficult to look holistically across all their active campaigns and optimize their investments across them. With weekly model updates and recommendations at the campaign level, the Incremental platform provided granular insights into the incremental sales each campaign drove (while controlling for external factors) and provided an easily actionable list of budget reallocations between them each week.

The results:

By leveraging Incremental, the brand was able to keep its advertising budget flat but realize a 38% increase in top-line growth and a 15% net-margin growth, and a 34% increase in overall iROI by dynamically reallocating its investments across channels and campaigns.

38% Top-line Growth

15% Net-margin Growth

34% Increase in Overall iROI

What’s next:

After validating that shifts yielded the expected returns, the brand integrated the ongoing measurement and recommendations into their monthly workflow with their agency partners who manage these campaigns. The brand will continue to recalibrate its search advertising strategy based on holistic business performance.

Want to find out how your brand can fuel incremental growth? Get started with Incremental today.


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