The Problem with Fixed Incrementality Multipliers

A lot of performance marketing teams have started using the concept of an incrementality multiplier to understand the ratio between attributed revenue or ROAS and the truly incremental revenue or iROAS. This is a great step forward from just relying on MTA (multi-touch attribution) tools like TripleWhale and Northbeam and most certainly just relying on platform-attributed numbers. However, having fixed incrementality constant is also problematic and there are better, albeit a bit more advanced, methods of making the multiplier dynamic. I discuss two methods - the Power Model and the Hyperbolic Model and why the latter is generally the better of the two. I have also shown the same using an interactive chart - here's the link to the app containing the demonstration https://lucky-lollipop-c2054f.netlify.app/ 00:00 Introduction 03:25 The 3 Problems with Fixed Incremental Multipliers 07:30 Alternative method 1 - Power Model 08:50 The Boundary Problem with the Power Equation 09:50 Alternative method 2 - Hyperbolic Model 11:20 The Improvement over Power Model 12:28 Comparison between the methods 14:10 Demonstrating with an Interactive Chart 15:40 Conclusion - The Way Forward If you want to get in touch with me on LinkedIn, here's the link: https://www.linkedin.com/in/kishalaya-mukhopadhyay17/