Unlike the notion of Return on Investment, also known as ROI, terms like ROAS (Return on Advertising Spend) and “incremental revenue” have not yet become the hottest ones in the global marketing industry. However, each of the latter, as surveys prove, plays a substantial part in current online advertising.
For what it takes, the meaning of the term “Return on Advertising Spend” is clear: it represents actual revenue, which would be impossible to receive without a certain online ad campaign. Thus, the importance of counting ROAS as precisely as possible becomes obvious, too: it is the amount of ROAS, which allows estimating whether running a particular advertising campaign has been worth the effort or not.
Similar to ROAS, a notion of “incremental revenue” is now increasing its importance worldwide. Unfortunately, its measurement remains quite a challenge for many marketers, much because of the fact that respectful analysts have not agreed upon the best method to opt for yet.
Certainly, although the marketing world is only starting to realize true essentiality of incremental revenue measurement practices, one of potentially useful approaches presupposes the following:
1. Initial audience segmentation
At the first stage, the website’s new visitors would be divided into two separate segments/groups, a so-to-say control group and a “retargeting segment”. Whereas, the 50/50 division is common, other options are also possible to select.
2. Ad Display/Non-Display
At the second stage, the actual ad display to a retargeting visitors’ group takes place. As for members of a control group, they will view either charity ads or none.
3. Conversion rate measurement
The final stage of incremental revenue measurement presupposes analysis of tracked conversion rates in a control group with those in a retargeting segment, aimed at counting the amount of actual revenue per one visitor.
Undoubtedly, the described tactic is far from perfect now, mainly because it involves participation of many team members even at the pre-measurement stage (set-up of short- and long-term goals) and requires additional expenditures. At the same time, it can definitely expand businesses’ marketing scope and help distinguish ways to improve their ad campaign effectiveness.
Written by Anton Ruin
CEO of Epom
Epom – global provider of ad serving solutions
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