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Incrementality vs. ROI

Incrementality measures ______ whereas ROI measures efficiency.

gross revenue

media cost

click-through rate

causal lift beyond baseline

Incrementality isolates the additional conversions truly caused by marketing activity. ROI divides profit by spend to judge efficiency, regardless of causality.

A campaign can show positive ROI but **zero** incrementality when spend ______.

has high CPM

cannibalises organic sales

runs in flighting

uses discount codes

If ads simply shift already‑intended purchasers into paid channels, revenue appears but lift is nil. ROI seems healthy because revenue is counted, but nothing new was created.

Which method is most direct for measuring incrementality?

Randomised control experiment

Time‑decay model

Attribution last‑click

CPA benchmarking

True lift requires a counter‑factual, best provided by test‑versus‑control randomisation. Heuristic attribution models cannot guarantee causal validity.

Geo‑based holdout tests output a lift metric that can then be converted into ______.

Viewability

ROI by dividing incremental profit by spend

Bounce rate

Latency

Incrementality tells you extra profit; dividing by cost produces a causal ROI. This sequence prevents over‑crediting non‑causal revenue.

In MMM, elasticity coefficients translate incremental sales response into ______ curves.

Impression share

Churn probability

ROI or diminishing‑return

CPC trends

Elasticity shows percent sales change per percent spend, forming response curves. These curves underpin ROI simulations at different budget levels.

Incrementality focuses on the **marginal** effect; ROI averages across ______ conversions.

only new

first‑touch

unique

all (incremental + baseline)

ROI’s numerator is total profit, which mixes organic and paid‑influenced sales. Incremental lift isolates only the marginal change, giving a purer causal view.

Lift results are typically expressed as ______ while ROI is expressed as a ratio or %.

CPC

CPM

percentage increase (e.g., +12%)

absolute dollars only

A lift test shows relative change versus control, such as a 12 % uplift. ROI might say $3 returned per $1 spent or 300 % return.

When a channel approaches saturation, incremental lift declines ______ than average ROI.

slower

at the same rate

faster

unpredictably

Diminishing returns hit marginal gains first; average ROI lags because it blends earlier efficient spend. This can mislead budget decisions if you ignore incrementality.

Incrementality tests require a control group that is ______ by the advertising.

converted

over‑served

cookie‑synced

unexposed

Ensuring the control never sees the ad maintains a valid counter‑factual. ROI calculations don’t mandate this separation; they can be computed from aggregate data.

Best practice: use incrementality to set total budget and use ROI to ______.

allocate across channels

design creatives

calculate p‑values

forecast churn

Incremental lift tells you when to stop spending overall. Within that envelope, ROI comparisons help decide which channels deserve the spend.

Starter

Review the basics.

Solid

Good job—refine for mastery.

Expert!

Outstanding performance.

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