# What is incremental ROAS (iROAS)?

> iROAS is the extra revenue your ads cause for every rupee of spend, measured against a group that saw no ads. Formula, a worked example and how to test it.
- **Author**: Marxx
- **Published**: 2026-11-23
- **Category**: Measurement
- **URL**: https://marxx.ai/library-glossary/iroas

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iROAS (incremental ROAS) is the extra revenue your ads caused for every rupee you spent, counting only sales that would not have happened without the ads. An iROAS of 2 means each INR 1 of spend caused INR 2 of extra sales.

## The formula

iROAS = (revenue with ads − revenue without ads) / ad spend

"Revenue without ads" comes from a control group that did not see your ads. Plain [ROAS](/glossary/roas) counts every sale an ad touched. iROAS counts only the lift.

## A worked example

Say you run ads in 10 cities and keep 10 similar cities as a control. Over four weeks:

| | Ad cities | Control cities |
|---|---|---|
| Revenue | INR 14,00,000 | INR 10,00,000 |

You spent INR 2,00,000 on ads. Ads Manager credits INR 9,00,000 of sales to the ads.

- Platform ROAS = 9,00,000 / 2,00,000 = **4.5**
- iROAS = (14,00,000 − 10,00,000) / 2,00,000 = **2.0**

The platform number is more than double the real lift. The control cities sold INR 10,00,000 with no ads at all.

## What to compare it with

Compare iROAS with your break-even ROAS, the ROAS where ads pay for themselves. Say your gross margin is 40%. Break-even ROAS is 1 / 0.40 = 2.5. A platform ROAS of 4.5 looks like a win. An iROAS of 2.0 is below 2.5, so the ads lose money on the extra sales they cause. See [break-even ROAS](/glossary/break-even-roas).

## How to measure it

- **[Geo-lift test](/glossary/geo-lift-test):** switch ads off in some matched places, as above.
- **[Holdout test](/glossary/holdout-test):** hold back a random group of people.
- **[Conversion lift study](/glossary/conversion-lift-study):** a platform splits people into test and control for you.

Match the groups before you start. They should have sold about the same in the weeks before the test.

## FAQ

### Why is iROAS usually lower than ROAS?

Platform ROAS also counts people who would have bought anyway, such as loyal customers who click a retargeting ad. iROAS removes them.

### Can iROAS be below 1?

Yes. It means the extra sales your ads caused were worth less than the ad spend.

### How often should I measure it?

Run a test when spend, offer or channel mix changes a lot. Keep the result as a rule of thumb for in-platform ROAS until the next test.

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