Counterfactual Revenue
Counterfactual revenue is the modeled estimation of what revenue would have been in a parallel universe where a specific marketing intervention did not occur. It serves as the 'zero-spend' baseline against which actual revenue is compared to calculate incremental lift.
The Short Version
The sales you would have made if you did nothing.
Prerequisites
Missing the Baseline
You run a BFCM sale. Revenue spikes. Was it the ads or the holiday?
Without knowing the Counterfactual Revenue (what you would have sold anyway during BFCM), you will over-credit your ads for the holiday traffic.
How it works
Train model on historical seasonality and trends
Project revenue for the period assuming Ad Spend = 0
The difference between Actual and Counterfactual is the 'Lift'
Common Misconceptions
Using last year's data as the counterfactual (Simpler, but ignores new trends)
Assuming counterfactual is zero (The worst mistake possible)
Ignoring external factors like competitor price changes
Related Terms
Frequently Asked Questions
QHow accurate is the counterfactual?
Our ridge-regression models typically achieve 95%+ accuracy in backtesting against holdout periods.
QCan I download the counterfactual data?
Yes. You can export the daily modeled baseline to compare against your own internal forecasts.