Question 1

What is ROAS in ecommerce marketing?

Accepted Answer

ROAS (Return on Ad Spend) measures revenue generated per dollar spent on advertising. A 4x ROAS means $4 revenue for every $1 spent. However, platform-reported ROAS is typically inflated due to overclaiming. True ROAS can only be measured through incrementality testing.

Question 2

What is the difference between attribution and incrementality?

Accepted Answer

Attribution assigns credit to touchpoints in a customer journey using models like last-click, multi-touch, or data-driven. Incrementality measures the true causal impact of an ad by comparing outcomes with and without ad exposure through controlled experiments. Incrementality is more accurate but harder to measure.

Question 3

What is creative fatigue in advertising?

Accepted Answer

Creative fatigue occurs when ad performance declines because the target audience has seen the same creative too many times. Static images typically fatigue faster than video. Early detection through frequency and engagement metrics prevents wasted spend.

Question 4

What is a good CAC:LTV ratio?

Accepted Answer

A 3:1 CAC:LTV ratio (lifetime value is 3x customer acquisition cost) is the common benchmark for healthy unit economics. Below 3:1 suggests overspending on acquisition or poor retention. Above 5:1 suggests underinvestment in growth.

Question 5

How does iOS 14.5 affect ad tracking?

Accepted Answer

Apple's ATT framework requires apps to get explicit user permission before tracking. The majority of users opt out, which substantially reduced Meta retargeting pools and degraded conversion reporting. Brands now rely on server-side tracking, first-party data, and probabilistic modeling.

Question 6

What is the difference between CPA and CAC?

Accepted Answer

CPA (Cost Per Acquisition) is ad spend divided by conversions from that ad spend. CAC (Customer Acquisition Cost) includes all marketing costs: ad spend, creative production, agency fees, and tools. CAC gives a more complete picture of true acquisition efficiency.

Question 7

What is Marketing Mix Modeling (MMM)?

Accepted Answer

Marketing Mix Modeling uses regression analysis on historical data to estimate each channel's contribution to business outcomes. It works at an aggregate level making it privacy-safe. Requires multiple years of data and works best for high-spend brands across multiple channels.

ROAS

Why it matters

In practice