E-commerce · Economics
Advertising contribution economics
Published · Reviewed by The Diligence Standard Team · Updated
ROAS does not show profit; acquisition spend must be connected to net sales and contribution after all variable costs.
Records to reconcile
- Spend and campaign data
- Orders and refunds
- Contribution before acquisition cost
Warning signal
Platform attribution exceeds actual orders or branded demand receives paid-media credit.
Transaction impact
Marketing efficiency and scalable earnings are overstated.
Response
Use blended contribution, isolate incrementality and stress acquisition costs.