How the Finance Industry Can Tackle the Incremental Lift Problem
By Jeremy Fain
Many major financial institutions, such as TD Bank, Citibank, and Chase face a fundamental problem: they already have big brand recognition. But wait, you ask: isn’t that a good thing? Not necessarily. Not if your goal is incremental lift.
These financial institutions are already engaged in copious amounts of advertising, especially on television. The question these marketers constantly face is this: if I spend my ad dollars in a particular way, am I getting access to new consumers? Or am I simply advertising to people who are already going to purchase my products anyway?
Let’s take the example of a bank, any big bank. They are always looking to add new accounts, but it is not as easy as it sounds. People choose banks based on their parents, or what their first job recommended, or because they are upset with their old bank. There are many products that banks have that they can advertise to their current customers or try to find new customers. But how do they find these new customers without wasting advertising on people who are already going to be customers? If someone is looking for an online brokerage account, and they are already ready to give that business to TD Ameritrade because they have seen so many TV ads or their friend told them it is the best, then TD Ameritrade wants to advertise to anyone BUT them. All of these businesses are interested in figuring out where they can advertise to bring new customers into the fold (incremental lift) – without wasting valuable ad dollars on consumers who have no likelihood of converting to a sale.
This pain point – achieving this incremental lift – is what inspired me to start Cognitiv in the first place. Not just because solving for it was an exciting problem, but because after surveying the market and hearing about all the poor reviews of the current offers, I became convinced that nobody was cracking the code of consistent incremental lift. Now, by using the newest AI technology called Deep Learning, I’m happy to say that Cognitiv is finally solving this big marketing problem.
The methodology to show incremental lift has been standardized over the years. I’ll be the first to admit that our measurement methodology is not groundbreaking. The groundbreaking part is how Cognitiv uses Deep Learning to solve for who, when, and where to target, that is delivering never-before-seen results to these types of big brands.
Without revealing too much of our secret sauce, we are able to train neural networks to recognize who has a high likelihood of already converting without more ads (non-incremental customers) and who has a high likelihood of converting if exposed to an ad (incremental customers). To go even further, Cognitiv can predict how the placement and time of the ad will improve the effectiveness of that ad for the potential new customer. This solution not only delivers higher incremental lift than more traditional solutions, but it improves the conversion rate and return-on-ad-spend of the incremental customers.
Plenty of people ask me how Deep Learning achieves this result. The answer? Deep Learning can do this since it uses large amounts of data from the brands themselves to train algorithms that are unique to their needs. Cognitiv is the only company right now able to build these automated, self-learning miracles at scale. Our neural networks are sophisticated enough to find the patterns in user data and discern the differences between incremental and non-incremental customers.
That’s why we’re so happy that we have been able to deliver dependable results in the financial services sector. That’s a major boon to any financial services firm, as prospective new customers are constantly entering the market. The financial services providers that find those new entrants and convert them are the ones that thrive.
Cognitiv’s algorithms are consistently updated, which is an important thing to note, because there will always be new consumers to advertise to. And with deep learning, the algorithm will be able to target them. Best of all? When companies stop wasting money on prospects who will not convert, they can reallocate those funds towards advertising to consumers who will.
Solving for incremental lift is extremely important. The reason why more agencies and platforms aren’t tackling it, however, is that they don’t have a good solution. Incremental lift solutions have not been shown to produce any lift in the past, because it was too difficult to see who was going to convert, and who wasn’t. Deep learning will power a future where achieving incremental lift is a distinct possibility, and Cognitiv is proud to be leading that revolution.