FAQ    Marketing Incrementality     How Do You Calculate Incremental Sales Driven by a Media Tactic?

How Do You Calculate Incremental Sales Driven by a Media Tactic?

The impact of a marketing tactic (eg: Facebook prospecting, retargeting, catalog, direct mail, national TV) is typically measured in terms of incremental sales driven by that tactic. Incremental sales driven by a media tactic are calculated using advanced marketing measurement techniques. There are three major types of advanced marketing measurement techniques.

  • Design of Experiments (DoE)
  • Marketing Mix Modeling (MMM)
  • Multi-Touch Attribution (MTA)

Incremental Sales Formula: incremental sales = f (media spend, raw sales, other parameters)

Once incremental sales are calculated for a tactic using one of the above techniques, the ROI for that tactic is calculated using the following formula.

ROI Formula: ROI = incremental sales divided by media spend

 

About the author

Madan Bharadwaj

Expert in advertising measurement, attribution and analytics

Want to Learn More About
Incrementality and Attribution?

We’ve got answers to all your questions about measurement,
experimentation, MMM, MTA and more.