Advanced attribution modeling and incrementality testing to understand what advertising truly drives
Standard advertising dashboards show attributed sales and ROAS, but they can't answer the critical question: which sales would have happened anyway without advertising? A brand running Sponsored Products on their best-selling ASIN might see 5X ROAS, but if 80% of those sales would have occurred organically, the true incremental ROAS is only 1X - unprofitable after fees and COGS.
This attribution problem leads to systematic misallocation of advertising budgets. Brands over-invest in branded keywords (high attributed ROAS but low incrementality, since those shoppers were coming anyway) and under-invest in category/competitor keywords (lower attributed ROAS but high incrementality, since you're capturing new customers). The result: hundreds of thousands in wasted ad spend annually.
iDerive's Advertising and Incrementality module solves this by combining attribution modeling with incrementality testing. We track the complete customer journey using Amazon Marketing Cloud (AMC), platform APIs, and holdout experiments to isolate advertising's true causal impact. You see not just which ads generate attributed sales, but which ads drive incremental sales that wouldn't have happened otherwise - the only metric that matters for profitability.
From attribution to incrementality to profitability
Attribution modeling provides the foundation. iDerive ingests data from all advertising platforms - Amazon Advertising, Walmart Connect, Target Roundel, Meta/TikTok - and uses algorithmic attribution to map customer journeys. We reveal which ad types drive awareness, consideration, and conversion at different funnel stages. This multi-touch attribution is vastly superior to platforms' last-click models.
Incrementality testing isolates causality. We design structured experiments (geographic holdouts, audience splits, time-based testing) that measure what happens when advertising is paused or increased. These tests reveal uncomfortable truths: branded search delivers 10-15% incrementality (most buyers were coming anyway), while category keywords deliver 60-80% incrementality (you're capturing genuinely new demand). This data transforms bidding strategies and budget allocation.
Profitability analysis is the final layer. Incremental sales only matter if they're profitable after all costs. iDerive calculates incremental contribution margin by deducting advertising spend, referral fees, fulfillment costs, and COGS from incremental revenue. You see which campaigns drive profitable growth (high incremental margin relative to spend) versus which drive unprofitable volume (incremental sales but negative margins). This prevents the common trap of growing revenue while shrinking profit.
At the campaign level, incrementality data guides tactical optimization. High-ROAS branded keywords get de-prioritized (incrementality is low), while lower-ROAS category keywords get increased budgets (incrementality is high). DSP campaigns that show weak attributed ROAS but strong incrementality (introducing new customers to your brand) receive continued investment. These optimizations typically improve overall advertising profitability by 20-30% without reducing revenue.
At the product level, incrementality reveals which ASINs benefit most from advertising support. Some products (unique, premium-priced, high consideration) show strong incrementality because advertising genuinely drives demand. Others (commodity, price-competitive, low consideration) show weak incrementality because purchase decisions happen regardless of advertising. This insight guides where to concentrate advertising budgets for maximum ROI.
At the portfolio level, incrementality informs strategic budget allocation across marketplaces and channels. If Amazon Advertising shows 4X incremental ROAS while Walmart Connect shows 6X, shift budgets to Walmart. If DSP shows weaker short-term incrementality but stronger long-term brand building (measured through brand search lift and organic sales increases), maintain DSP investment as a strategic tool rather than evaluating it solely on immediate ROAS.
See how incrementality testing reveals which campaigns genuinely drive profitable growth.
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