Definition
Email incremental revenue is the portion of revenue that occurs specifically because of email activity and would not have happened otherwise. It is calculated by subtracting the revenue a business would have earned without email — measured through control groups or baseline models — from the revenue observed when email is active. Incremental revenue is the most honest measure of email's true financial contribution, distinct from merely reporting attributed revenue.
How It Works
Not every purchase by an email subscriber is caused by email. Some customers would have bought anyway, through other channels or out of habit. Incremental revenue isolates the causal contribution of email.
- Control groups — holding back a segment of the audience provides a baseline of what happens without a campaign.
- Baseline models — statistical models estimate what revenue would have been absent email, using historical patterns.
- Difference measurement — the gap between observed revenue and baseline revenue is the incremental amount.
This concept is closely tied to email-attribution and is the basis for proving email's worth in a multi-channel marketing mix, particularly when defending budget allocation.
How to Calculate
Calculate incremental revenue in four steps:
- Measure observed revenue — record revenue from the audience that received email.
- Measure baseline revenue — record revenue from a control group or model for the same period.
- Subtract — subtract baseline revenue from observed revenue.
- Attribute the difference — the remainder is the incremental revenue produced by email.
Incremental Revenue = Attributed Revenue - Baseline Revenue
| Variable | Description |
|---|---|
| Attributed Revenue | Revenue observed with email activity |
| Baseline Revenue | Revenue expected without email (control group or model) |
Example
A brand runs a campaign to 80,000 subscribers and records £60,000 in attributed revenue. A control group of 8,000 held back from the send produces revenue that scales to an expected £45,000 baseline. The incremental revenue is £60,000 minus £45,000, or £15,000, meaning only a quarter of the attributed revenue was truly caused by the campaign.
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Frequently Asked Questions
Attributed revenue credits all observed purchases by emailed subscribers to email, while incremental revenue subtracts the purchases that would have happened anyway. Incremental revenue is therefore almost always lower and more conservative.
Campaign lift is a percentage measure of improvement over a control group, while incremental revenue is the absolute revenue amount that improvement represents. Both rely on the same holdout methodology and feed directly into email-attribution models.
Statistical models using historical data and non-emailed comparison audiences can estimate the baseline. However, a proper control group remains the most reliable method.
It reveals email's true causal contribution, so budget decisions are based on real impact rather than inflated attribution. Without it, a channel can appear more valuable than it is, skewing investment.