How to Calculate Incremental ROAS Step-by-Step for Marketers

Alex Bouqt

·September 5, 2025

·8 min read

How to Calculate Incremental ROAS Step-by-Step for Marketers — Image Source: unsplash

What Is Incremental ROAS?

Incremental ROAS (Return on Ad Spend) is a key performance metric that reveals the true impact of marketing campaigns. It measures the additional revenue generated that would not have occurred without the campaign.

Unlike standard ROAS, which counts all sales during a campaign period, incremental ROAS focuses only on the incremental lift directly attributed to advertising efforts. This approach highlights how much extra revenue a campaign drives, offering a clearer view of its effectiveness

Formula:
(Test Group Revenue − Control Group Revenue) ÷ Ad Spend.

To figure out incremental ROAS, several key terms need to be understood:

Term	Definition
Test Group	The audience exposed to the advertising spend, often with increased or adjusted budgets to measure effect.
Control Group	This group is used to compare results. It shows what happens with normal spending on the tactic.

Why Incremental ROAS Matters

Incremental ROAS looks at extra money from more ad spending.
Traditional ROAS counts all money from ads, even if some sales would happen anyway.

Measuring incrementality prevents overestimating ad effectiveness. A campaign might appear successful with traditional ROAS, but incremental ROAS shows whether the growth was real.

Tip: Using incremental ROAS avoids wasted spend by highlighting which ads truly drive growth. Ads that don’t create extra sales can be reduced or eliminated.

Benefits of Incremental ROAS

Aspect	Explanation
Accurate Impact Measurement	Shows you which ad dollars really work.
Better Budget Allocation	Lets you save money by stopping ads that do not help you grow.
Competitive Advantage	Helps you make smart choices using real results, not fake numbers.

A big CPG brand found that only 40% of their ad sales were really extra. When they looked at true lift, their ROAS went down from 5.2x to 2.1x. They made more profit because they spent their money better.

Campaign Optimization

Incremental ROAS provides actionable insights that allow campaigns to improve continuously. By tracking incremental impact, brands can identify what works, reallocate budgets quickly, and scale the most effective tactics.

Bayer got 32% more incremental return by using connected measurement and changing budgets daily.
Lulus, an online store, grew their incremental ROAS by 94% by using data to find new customers and improve ads.

These brands used what they learned from incremental ROAS to fix their lists, get more sales, and make bigger baskets.

Note: When you watch incremental ROAS, you can change your ads fast. You see what works and make changes for better results.

Calculate Incremental ROAS

Step-by-Step Process

You want to make smart decisions with your marketing budget. To do this, you need to calculate incremental ROAS the right way. Follow these steps to get accurate results:

Set Up Test and Control Groups
- Create two groups: one sees your ads (test) and one does not (control).
- Make sure both groups are similar in size, behavior, and demographics.
- Remove outside noise: avoid holidays or big events that could skew results.
- Choose a test period of at least one week.
- Segment your audience so the groups do not overlap.
Track Revenue for Both Groups
Measure the revenue from each group during the test. The test group’s revenue shows what happens with ads. The control group’s revenue shows what happens without ads.
Measure Ad Spend
Record how much you spend on ads for the test group. Only include the money spent during the test period.
Calculate Extra Revenue
Subtract the control group’s revenue from the test group’s revenue. This gives you the extra revenue caused by your ads.

Apply the Formula
Use the formula to calculate incremental ROAS:

Incremental ROAS = (Test Group Revenue − Control Group Revenue) ÷ Ad Spend

Or, in simple terms:

Incremental ROAS = Incremental Revenue / Ad Spend

Interpret the Results
Look at your incremental ROAS value. A higher number means your ads bring in more extra money for every dollar you spend. If the number is low, you may need to change your strategy.

Tip: Use tools like media mix modeling or multi-touch attribution to improve your results. Clean and consistent data makes your calculations more reliable.

Common Challenges When You Calculate Incremental ROAS

Challenge	Description
Revenue Attribution Issues	Hard to know which channel gets credit for sales.
Data Fragmentation	Ad data lives on many platforms, making it tough to see the full picture.
Time Lag Effects	Some sales happen days after someone sees your ad, which can confuse your numbers.
Cross-Device Behavior	People use many devices, so tracking all their actions is tricky.
Inconsistent Measurement Standards	Different platforms use different ways to measure ROAS, which can be confusing.
Tracking Limitations	Privacy rules can limit what data you can collect, making it harder to measure results.

Note: When you calculate incremental ROAS, always check your data for accuracy. Clean data helps you trust your results.

Example Calculation

Let’s walk through a real-world example to show how you can calculate incremental ROAS.

Suppose you run a campaign and set up your test and control groups. Here are your results:

Group	Revenue	Ad Spend
Test Group	$25,000	$4,000
Control Group	$15,000	$0

Now, follow these steps:

Find the Extra Revenue
$25,000 (test group) minus $15,000 (control group) equals $10,000 extra revenue.

Apply the Formula

Incremental ROAS = ($25,000 - $15,000) / $4,000 = $10,000 / $4,000 = 2.5

Interpret the Result
Your incremental ROAS is 2.5. This means for every $1 you spend on ads, you make $2.50 in extra revenue.

Tip: Marketers often analyze incremental ROAS to see which campaigns work best. If your incremental ROAS stays steady or grows, you may want to invest more in that channel. If it drops below 1.0, you might need to rethink your strategy.

Best Practices for Reliable Results

Make sure your test and control groups are similar in size and behavior.
Use large enough groups to get results you can trust.
Watch for outside factors like season changes or big events.
Keep your data clean and organized.

Measurement Techniques

Geo-Holdout Tests

Geo-holdout tests help you see how ads work in certain places. You stop ads in some regions and compare them to places where ads keep running. This way, you get clear results because you remove things that could mess up the test. You find out which channels help your business grow and use your money better.

Pick regions to measure results closely.
Stop ads in some places to see what changes.
Find out which channels help your business most.

Geo-holdout tests help you choose where to spend your money.

Audience Holdouts

Audience holdout tests split people into two groups. One group sees your ads, and the other does not. You compare both groups to see how much your campaign helps. This test shows what happens when some people do not see your ads. You learn about how many people buy and how they act.

Easy way to measure incrementality.
Shows the real boost from your ads.
Helps you plan your budget better.

Remember, you need a big enough holdout group for good results. You might reach fewer people during the test, but you learn important things.

Media Mix Modeling

Media mix modeling (MMM) uses data to show how each channel affects sales. You look at old spending and results to see what brings in more money. MMM helps you plan your budget and see how channels work together.

See which channels bring in the most sales.
Find the best way to split your money.
Learn how channels work together for better results.

Media mix modeling helps you guess what will happen if you change your budget.

Best Practices

Data Accuracy

Use analytics tools to find incremental revenue.
Figure out the extra ad spend for your campaign.
Use the marginal ROAS formula:
Marginal ROAS = Incremental Revenue ÷ Incremental Ad Spend

Watch out for audience saturation. If you show ads too much to the same people, your returns can drop. Make sure your ads are good and match what people want. Different channels work better for different goals, so test them to see what works best. Pay attention to seasons and market trends, because these can change how people react to your ads.

Common Pitfalls

Many marketers make mistakes when measuring incremental ROAS. Avoid these to get better results:

Not setting a clear goal for your test.
Not randomizing your test and control groups.
Using just one attribution model.
Missing cross-device tracking, which can count users twice.
Not having a clear plan for attribution.

Pitfall	Explanation
Using Only One Attribution Model	Gives you a small view; try more models for a full picture.
Missing Cross-Device Tracking	Can count people twice; use user ID mapping.
Unclear Attribution Models	Can cause budget mistakes; set and use clear models.
Mixing Up Attribution and Incrementality	Mixes up your results; keep them apart.
Missing an Attribution Plan	Makes weak strategies; plan ahead to do better.

Note: Always check that your test and control groups are alike. This makes your results stronger.

Using Results

After you get your incremental ROAS, use it to make smart choices. Look at which campaigns or channels give you the best returns. Move your budget to ads that help your business grow. If your incremental ROAS is low, try new ideas or test new audiences.

Many brands have trouble seeing the whole customer journey. You can fix this by adding outside data to your own data.

Remember: Incremental ROAS shows where your money works best. Use what you learn to keep making your campaigns better and grow your business.

Sometimes, a higher cost per click is acceptable if campaigns generate strong incremental returns. For example, Sponsored Brands may deliver more incremental revenue per dollar spent than Sponsored Products. Measuring iROAS across different channels and breaking down results by audience or device provides a clearer picture of where ads truly perform.

To optimize performance, combine methods such as A/B testing and holdout tests to validate results. Adding multi-touch attribution can further improve accuracy by showing how different touchpoints (search, display, social) work together to influence conversions. This holistic approach helps refine strategy and build stronger results over time.

FAQ

What is a good incremental ROAS?

A good incremental ROAS depends on your goals. Many marketers aim for a value above 1.0. This means you earn more in extra revenue than you spend on ads. Use Rolinko to track and compare your results.

How often should you measure incremental ROAS?

You should measure incremental ROAS after each campaign or test. Regular checks help you spot trends and make quick changes.

Can you use incremental ROAS for all channels?

Yes, you can use incremental ROAS for most channels. Test each channel with control and test groups. This helps you see which channels drive real growth.

Why does incremental ROAS sometimes drop?

Incremental ROAS can drop if your ads reach the same people too often or if your audience gets tired of your message. Try new creative ideas or test new audiences to improve your results.

What can Rolinko bring to the table for incremental ROAS?

Rolinko simplifies incremental ROAS measurement by unifying data from all campaigns into one dashboard. The platform automates test/control tracking, highlights incremental lift, and provides real-time reports for smarter budget allocation. This allows marketing teams to quickly identify which ads truly drive growth while avoiding wasted spend.