Q&A Return on Ad Spend (ROAS) vs. Incrementality

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 Adotas presents a Q&A with Alexei Chemenda, Chief Revenue Officer for Apps and Managing Director, U.S at Adikteev discussing ROAS vs. Incrementality
What is the biggest misconception in retargeting campaigns?
The two biggest misconceptions made in a retargeting campaign are that marketers should only focus on lapsed users versus active ones, and that Return on Ad Spend (ROAS) should be used as the main metric of success.
What is ROAS and why should a mobile marketer not look at ROAS for a retargeting campaign? More so, how is ROAS failing marketers in retargeting campaigns?
We describe ROAS as looking at how much an advertiser spent on a given marketing channel and how much revenue is attributed to that channel. ROAS is failing advertisers who are using it for retargeting because it doesn’t take into account the actions that would have happened regardless of the money spent on a marketing channel.
What is incrementality and what does it show in a retargeting campaign?
Incrementality is the measurement a marketer can use to see if they are driving real value from a marketing channel or if the value they see is from an event that would have happened, no matter what.
Specifically, it’s the difference in user behavior between a holdout group (not exposed to ads) and the target group (users you’re allowed to target).
How do you measure incrementality?
There are a few methodologies, but the most popular is ITT – Intention To Treat.
Usually, you’d have a holdout group of 20 percent and a target group of 80 percent. You would run a campaign for a few weeks or months, depending on budget and audience size, and then observe the total revenue (or signups, or any other KPI) driven by the holdout group and compare that to the total revenue (or other KPI) of the target group. If the difference between those two is greater than your spend, then this marketing channel is driving incremental value.
When should you start measuring incrementality?
As soon as you start spending on a marketing channel.
What are the advantages of incrementality as the main form of measurement in retargeting campaigns?
It removes all debates about last-click attribution, post-view, post-click, etc. You simply measure the overall impact of this channel.
About Alexei Chemenda
Alexei Chemenda is the Chief Revenue Officer for Apps and Managing Director, U.S at Adikteev, where he focuses on leading the company’s U.S expansion for its app retargeting product. Prior to Adikteev, Chemenda co-founded MotionLead, a mobile creative solution that built and ran campaigns using in-house playable and interactive ads, with co-founders, Arthur Querou and Louis Bur, after realizing that ad banners on their app were not driving enough revenue. In 2014, MotionLead was accepted into the Y Combinator program, making it the first French company to make it to Silicon Valley’s top start-up acceleration program. MotionLead was acquired in June 2015 by Adikteev.

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