Incremental ROAS (iROAS)
Incremental ROAS (iROAS) measures the revenue that would not have occurred without a specific marketing channel, divided by the spend on that channel. Unlike traditional ROAS, which relies on attribution, incremental ROAS estimates true causal impact by comparing actual outcomes to a modeled counterfactual.
The Short Version
Incremental ROAS tells you whether spend created new revenue or just captured existing demand.
Visual Explanation
What Is Incremental ROAS?
Your ROAS might look great. That doesn’t mean it worked.
Prerequisites
Why Traditional ROAS Fails
Traditional ROAS relies on attribution models (Last Click, Data-Driven) that assign credit to touchpoints in a user's journey. This often over-credits 'harvesting' channels like branded search and retargeting, which interact with users who are already converting.
This focuses optimization on correlation (who touched the user) rather than causation (who drove the sale), leading to wasted budget on users who would have bought anyway.
How it works
Estimate what revenue would have been without the channel (Counterfactual)
Compare against observed revenue
Attribute the difference as incremental impact
Common Misconceptions
High ROAS ≠ High Incrementality (Retargeting often has high ROAS but low iROAS)
Low Incrementality ≠ Useless Channel (It may just be saturated)
Short time windows distort results (Incrementality needs time to separate signal from noise)
Deep Dive Concepts
Frequently Asked Questions
QIs incremental ROAS the same as MMM?
Not exactly. MMM (Marketing Mix Modeling) is the statistical method used to calculate incrementality. Incremental ROAS is the specific metric that results from that model.
QCan incremental ROAS be negative?
Yes. If a channel cannibalizes organic sales or other more efficient channels to the point where the cost of media exceeds the net-new revenue, iROAS can be negative.
QDoes incremental ROAS replace attribution?
No. Attribution is useful for day-to-day campaign tactical execution. iROAS is for strategic budget allocation and measuring true business impact.