MIM Model Insights | How do you calculate ROAS (Return on Ad Spend)?

To calculate ROAS we utilize a statistical model that analyzes the relationship between your marketing spend across different channels (TV, social media, print, etc.) and your target data, allowing you to determine the incremental revenue generated by each channel and subsequently calculate its ROAS by dividing the attributed revenue by the corresponding ad spend; essentially, the MIM model simulates scenarios where you adjust the spending on a specific channel to see how it impacts the target variable, providing an estimate of that channel's individual contribution to revenue and therefore its ROAS.

For each channel, simulate a scenario where you only change the spend on that specific channel while keeping others constant. Divide the resulting change in predicted sales by the change in spend on that channel to calculate its ROAS.