iROAS, or Incremental Return on Ad Spend, is a powerful metric that measures the additional revenue generated by your advertising campaigns, beyond what would have occurred without your marketing efforts. It differs from traditional ROAS by focusing solely on the incremental revenue that your ads drive, helping you understand the true impact of your marketing spend.
While traditional ROAS provides a broad view of how much revenue is generated per dollar spent on advertising, it does not distinguish between revenue that would have occurred organically and revenue that was directly driven by the campaign. iROAS isolates this effect, allowing marketers to focus their budgets on activities that generate new and incremental growth, rather than merely capturing demand that already exists.
At Rockerbox, iROAS is an integral part of our unified measurement approach. By integrating iROAS with other tools such as Marketing Mix Modeling (MMM) and Multi-Touch Attribution (MTA), we help brands optimize their ad spend and drive true performance. With our professional services team, you also gain expert guidance in analyzing and acting on your iROAS results to ensure continuous improvement of your marketing efforts.
Why iROAS is Critical for Marketing Efficiency
- Focus on Real Revenue Drivers
iROAS provides a clearer understanding of which campaigns and channels are truly driving additional revenue. By isolating the incremental impact of your marketing, you avoid attributing success to campaigns that may not be as effective as they seem when using standard ROAS alone.
- Optimize Your Budget for Maximum Impact
With iROAS, you can better allocate your marketing budget to the channels and campaigns that deliver the most incremental value. This ensures that every dollar you spend is driving real growth, rather than just maintaining existing sales.
- Validate Campaign Effectiveness
iROAS helps validate which campaigns are genuinely driving performance by comparing the incremental returns of different marketing activities. It’s an essential metric for marketers looking to optimize their strategy and maximize the returns on their media investments.
- Complementary to MTA and MMM
iROAS doesn’t operate in isolation. At Rockerbox, we integrate iROAS with MTA and MMM to provide a unified view of your marketing effectiveness. This ensures that your marketing strategy is informed by a complete understanding of what’s working and why.
How to Calculate iROAS
Calculating iROAS is relatively simple, but it requires careful setup to ensure accuracy. Here’s how it works:
iROAS Formula:
iROAS = (Incremental Revenue - Control Revenue) / Ad Spend
- Incremental Revenue: This is the revenue that can be directly attributed to your marketing campaign, which is measured through controlled experiments such as A/B testing or geo-lift testing.
- Control Revenue: The revenue generated by a control group (those not exposed to the campaign) that represents what would have happened naturally without your advertising.
- Ad Spend: The total cost of running your marketing campaign.
By using this formula, marketers can calculate the actual return generated by their advertising spend, rather than overestimating its impact by including revenue that would have occurred organically.
How Rockerbox Helps You Measure iROAS
At Rockerbox, we help brands measure iROAS as part of our unified measurement offering. Here’s how we support you through every step of the process:
- Setting Up Controlled Tests
To measure iROAS effectively, Rockerbox works with your team to design and implement controlled experiments. This could include A/B testing, geo-lift testing, or other incrementality testing methods that isolate the true impact of your marketing efforts. Our professional services team ensures that the tests are designed with precision, allowing you to capture reliable iROAS data.
- Executing and Managing the Testing Process
We manage the entire testing process, from the selection of test and control groups to the execution of the experiment. Rockerbox ensures that every aspect of the test is conducted smoothly, minimizing bias and ensuring accurate measurement of incremental revenue.
- Analyzing Results and Measuring Incremental Revenue
Once the tests are complete, our experts analyze the results to calculate the incremental revenue generated by the campaign and determine your iROAS. We provide you with detailed insights into how much additional revenue was driven by your marketing, allowing you to make informed decisions about future budget allocations.
- Integrating iROAS with MMM and MTA
Rockerbox integrates iROAS data with your MMM and MTA models, giving you a unified view of your marketing performance across all channels. This ensures that your decision-making is based on a complete and accurate understanding of how each part of your marketing ecosystem contributes to overall performance.
- Ongoing Strategy Optimization with Expert Support
Measuring iROAS is just the beginning. Rockerbox’s professional services team works closely with you to continuously optimize your campaigns based on iROAS results. Whether you need to scale up successful campaigns or refine underperforming ones, our team provides the guidance you need to ensure ongoing improvement.
Why Choose Rockerbox for iROAS Marketing?
Rockerbox offers a comprehensive and integrated approach to measuring and optimizing iROAS as part of your overall marketing strategy. Here’s why brands choose Rockerbox for their iROAS needs:
- Unified Measurement Approach
iROAS is just one piece of our broader unified measurement solution. By integrating iROAS with MMM and MTA, Rockerbox helps you gain a complete and cohesive understanding of your marketing performance, ensuring that every part of your strategy works together to drive growth.
- Expert-Led Testing and Analysis
Our professional services team provides hands-on support in designing, executing, and analyzing incrementality tests to measure iROAS. We ensure that your experiments are set up correctly and that the results are actionable, allowing you to optimize your strategy with confidence.
- Actionable Insights for Continuous Improvement
Rockerbox doesn’t just deliver data—we provide actionable insights that help you improve your marketing performance. With our guidance, you’ll know exactly how to adjust your campaigns to maximize iROAS and improve overall efficiency.
- Comprehensive Support and Ongoing Optimization
From setting up tests to refining your strategy, Rockerbox offers full support throughout the entire process of measuring and acting on iROAS data. Our goal is to help you continuously improve your marketing performance, ensuring long-term success.
FAQs About iROAS Marketing
What is iROAS, and how does it differ from traditional ROAS?
iROAS, or Incremental Return on Ad Spend, focuses on the additional revenue generated by your advertising campaigns that wouldn’t have occurred without your marketing efforts. Traditional ROAS, on the other hand, includes all revenue generated, even if some of that revenue would have occurred organically. iROAS provides a more accurate picture of your campaign’s effectiveness.
How can I measure iROAS with Rockerbox?
Rockerbox offers a suite of tools and services to help you measure iROAS through controlled experiments, such as A/B testing or geo-lift testing. Our team will design and manage the test, analyze the results, and integrate the findings with your MMM and MTA models for a comprehensive view of your marketing performance.
Why is iROAS important for optimizing ad spend?
iROAS helps you identify which campaigns and channels are driving true incremental growth, allowing you to focus your budget on the efforts that deliver the highest returns. By measuring iROAS, you ensure that every dollar you spend is generating real, measurable value.