ROAS can make any campaign look refreshing, but measuring incrementality is how marketers can tell if the juice was actually worth the squeeze.
Apple juice and cider brand Martinelli’s is using that logic to rethink how it judges retail media performance.
Although return on ad spend is relatively easy to measure, treating it as the main scorecard can overstate the impact of advertising and steer advertisers toward optimizing for attributed sales rather than genuinely incremental ones.
(They don’t call ROAS a “moral hazard” for nothing.)
“From a business strategy standpoint, we want to make sure we’re bringing new customers into the brand,” said Scott Lee, VP of marketing at Martinelli’s. “And with a traditional metric like ROAS, it’s tough to parse whether we’re just incentivizing existing customers to buy things they would have purchased anyway.”
Show, don’t tell
This same tension shows up all over the retail media ecosystem, where dashboards often look great but don’t always make clear what the “media” in “retail media” is actually adding.
Which is why there’s been growing interest in new metrics that back into causality and measure longer-term value rather than relying on surface-level attribution.
Grocery chain Albertsons has been one of the louder voices on that front.
Albertsons Media Collective, its retail media arm, recently started surfacing lifetime value in its reporting to show advertisers how campaigns pay off beyond an initial conversion. And it’s also been exploring incremental return on ad spend (iROAS for short) as a more reality-checked way to gauge how much credit to give a campaign.
The difference between ROAS and iROAS is not semantic.
The same campaigns can swing by as much as 6.5x on iROAS and even flip from positive to negative depending on the methodology, according to research conducted by Albertsons earlier this year together with Northwestern University’s Kellogg School of Management and measurement firm Ovative.
For a brand like Martinelli’s, which wants to attract new buyers and not just repeat purchases, incrementality is the only metric that answers whether media is actually growing the business, because it separates campaigns that win new households from those that monetize loyalists.
“Our household penetration is still relatively low,” Lee said, “so the goal is to bring in new customers, not just get existing customers to buy a little more, which is why iROAS makes sense.”
ROAS vs. iROAS
One way to think about iROAS is like ROAS but with a built-in BS detector. It only counts the lift you can prove with a control group.
Albertsons gets to that number by comparing shoppers who saw an ad with a similar control group that didn’t, and only credits media for the gap between them.
For its holiday campaign last year, Martinelli’s used that approach to measure the display media it ran across Albertsons, a mix of upper-funnel and lower-funnel placements that reached shoppers early in their browsing as well as closer to checkout.
The brand saw a 33% lift in sales, 65% new-to-brand buyers and, importantly, $7.45 in iROAS, which Lee describes as a key proof point.
“It’s a really big step forward for us to be able to show that we’re hitting the objectives we set out to achieve,” he said. “That’s what allows us to increase our investment in the brand over time.”
Lee said Martinelli’s now plans to apply a similar playbook to other parts of its marketing portfolio and start asking its other media partners more pointed, incrementality-focused questions.
Measuring apples to apples
Questions about incremental impact are especially difficult to answer in the grocery sector, where almost every visit produces a sale and it’s easy to overestimate the effect of advertising.
Grocery is a really high-intent environment, said Liz Roche, VP of media and measurement at Albertsons Media Collective. People don’t come to a grocery store’s website to window shop.
“It’s not like you walk the aisles, do price comparisons and then walk out,” Roche said. “I’m not showrooming; I’m buying those black beans or whatever right now because I have to get dinner moving, which is why the match-control methodology is so important here.”
A match-control test compares a group that was exposed to something with a separate group of similar people who weren’t, so you can isolate the effect of that exposure. In retail media, that “something” is the ad, and the difference between the two groups is what iROAS is trying to capture.
“At the end of the day,” Roche said, “we’re just trying to measure apples to apples.”
