Why Ads with Proximity to Purchase Can and Should be Incremental
Have we Forgotten the Fundamentals of Marketing Effectiveness?
This article originally appeared as an opinion piece in WARC on March 21, 2025.
There’s a recent talking point that’s been circulating from a certain corner of the digital ad industry.
“A useful rule of thumb: the closer an ad is to purchase, the less likely its sales are incremental.”
How has our industry gotten to the point where a statement like this can be made with a straight face? Have we lost all sense of how marketing works?
Embedded in this is a takedown of last-click attribution. You’ll get no argument from me on that point. A lot of ad dollars in search, social, retail media, and elsewhere are misspent due to over-reliance on last-click. Branded search is a frequent offender.
But the rule of thumb doesn’t say anything about last-click or branded search. It says: “the closer an ad is to purchase, the less likely its sales are incremental.”
Let’s think about this as marketers for a moment.
Do we really think an ad appearing close to the point of purchase lacks an ability to influence brand choice?
I’m not sure I can think of a better place to influence brand choice than (1) in the shopping context (2) at the moment of decision, and (3) close to the point of purchase.
Here’s what Jon Moeller, CEO of Procter & Gamble, has to say:
“I generally believe the majority of brand choice is made in a retail environment. I think less brand choice is made sitting on a couch or even driving in a car on the way to a retail establishment. The same is true for online. So, we’re very carefully evaluating this opportunity.”
We also can’t ignore that 85% of sales still happen in-store, which the heuristic conveniently overlooks. In-store ads – particularly emerging in-store digital – are also in a position to influence brand choice.
Here are 10 ways incrementality (iROAS or iROI) happens close to the point of purchase in digital and physical retail contexts:
Sponsored brands. E-commerce on-site display and video ads create brand awareness – especially for challenger brands and innovation SKUs – that may not generate immediate clicks but drive incremental sales over time.
Conquesting. Conquesting competitor brands’ search terms is a relatively expensive proposition, but converting even a small percentage to regular buyers of your brand can be highly incremental.
Ad relevance. RMNs leveraging purchase-based data to deliver relevant, personalized search results improve conversion rates.
Margin recapture. Effective in-store or digital ads can reduce the reliance on trade promotion, recouping near-term margins and improving profitability.
Driving traffic to your aisle. An in-store digital ad at the grocery store entrance can, for example, remind food shoppers to also visit the household goods aisle since they’re almost out of dish soap.
Driving impulse purchases. An ad in the checkout aisle can drive an impulse purchase of a candy bar or drink.
Driving product trial. Product samples are an effective form of media that induce trial and adoption from new-to-brand consumers.
Merchandising. Effective merchandising strategies can increase units per buyer. Convincing a dairy aisle shopper to make a cheesecake for the holidays drives four units of cream cheese instead of zero or one.
Unbranded search. Three-quarters of retail media search is unbranded. Unless the shopper searches for “sports drinks” when they explicitly have Gatorade in mind (and how often is that really the case?), last-click conversions will mostly be incremental to brands.
Branded search. Yep, even branded search can be incremental if the brand uses the opportunity to introduce innovation SKUs or upsell from single-packs to multi-packs.
If I were to make a counter-argument (which I won’t since it would be similarly ill-advised to apply such blunt logic), it would look like this: “A useful rule of thumb: the further away an ad is to purchase, the less likely its sales are incremental.”
My supporting points for this argument (hypothetically, of course) would be:
Fraudulent ads aren’t incremental. Open-web programmatic display ads are littered with bot traffic and other forms of ad fraud, and any ad that isn’t viewable by a human, by definition, produces no iROAS.
Non-viewable ads aren’t incremental. Major ad platforms reject third-party ad verification, so brands can’t be sure their impressions meet the one-second viewability standard as users rifle through their feeds.
Display ad retargeting overstates incrementality. Similar to branded search, ad retargeting puts impressions in front of e-commerce shoppers who are already the most likely to convert.
Black box AI optimization tools overstate incrementality. These tools appear to be directing tons of impressions to their bot-ridden off-site audience networks without providing domain or URL-level transparency so advertisers can’t see where they run. Some practitioners argue their algorithms are just big retargeting engines (see argument above).
Of course, this is a ridiculous heuristic to apply to all upper-funnel ads. That would be claiming that advertising on TV, CTV, and premium publishers doesn’t work when they are, in fact, some of the best venues for brands to be seen.
The reality of any advertising is that its incrementality depends on the quality of the strategy, creative, context, and data supporting the campaigns. Not the distance from purchase.
So why is this talking point stated at the top gaining popularity right now?
Because the rise of retail media is encroaching on other large digital ad platforms’ businesses.
One point I do agree with though: “Non-incremental ads are the secret suckers of your budget – they look great in reports but add zero value.”
Ain’t that the truth.