The biggest change in how we should approach incremental revenue is the collective realization that chasing perfect attribution is a losing game. For years, we’ve been stuck debating ROAS and last-click models, but the consensus from experts is that these platform-reported metrics are increasingly unreliable for understanding true business growth. This means the reports you've been using to justify your ad spend are likely painting a misleading picture of what's actually driving new sales.
The hosts on Ecommerce Playbook have been hammering this point home. The core problem is that attribution models are great at telling you who gets credit for a sale, but not whether that sale would have happened anyway. As Tony and Steve discussed on their episode, "Why 'Perfect Attribution' Is a Lie," the obsession with perfect data accuracy is a distraction from what really matters: making better decisions. They make the case that focusing on shared, directional metrics that satisfy both marketing and finance is far more productive.
So, what has stopped working is relying on those convenient but flawed in-platform ROAS numbers. What has started working is a more rigorous, scientific approach to Marketing Measurement. The gold standard for this has become incrementality testing, particularly through methods like geo-holdouts. Richard and Luke talked about this on "224 Calls Later… This One Problem Showed Up Everywhere," explaining that these tests are the most reliable way to see the true, causal impact of your marketing channels. It's about measuring the lift you're actually creating.
To make this practical, you need new metrics. In an incredibly useful episode, "Turning Incrementality Tests Into Action," guests George Davis and Olivia Kory introduced a metric called Incremental Marginal Return (IMR). It's a much more intuitive way to think about performance than iROAS because it helps you answer a simple question: for every extra dollar I spend, how much incremental return am I getting? This allows for much smarter, real-time budget allocation.
To put this into practice, you first need to understand the levers you can pull. On another episode of Ecommerce Playbook, "Unpacking Incrementality," Luke broke it down into its core components. He explained that incremental ROAS is primarily driven by two things: your average order value (AOV) and your impression conversion rate. If you want to improve your incremental return, you need to focus your efforts on increasing one or both of those metrics.
However, a word of caution comes from another Ecommerce Playbook episode, "Stop Running Small Tests." While optimizing the small stuff is important, you can't get so lost in marginal gains that you miss opportunities for exponential growth. They argue for prioritizing bigger, strategic swings that have the potential for massive impact. It’s a balancing act. You can find inspiration for smaller, compounding improvements from people like Scott Needham on The Smartest Amazon Seller, who champions the idea of finding small 1% gains that add up over time. The key is to run a portfolio of tests, some small and some large, and to always measure their true incremental impact on your bottom line. don't just optimize for a metric on a dashboard.