Incremental revenue measures the growth paid media causes, separate from what brand equity and word of mouth would have driven anyway. This matters because last-click ROAS only credits the final touchpoint, undercounting the top and middle-funnel media that builds the sale. When bonus structures reward last-click ROAS instead, teams underinvest in upper-funnel spend and starve long-term growth. This video explains why shifting to incremental revenue should happen immediately, not eventually.
Why Marketing Bonuses Should Shift From ROAS to Incremental Revenue Immediately
Marketing bonuses should shift from ROAS to incremental revenue immediately, because firms make topline revenue commitments to investors that paid media only partly drives, and rewarding the wrong metric misaligns the whole team’s incentives with that forecast. In this video, John Wallace, CEO of LiftLab, answers a question he hears often: when should a marketing team’s bonus structure move from ROAS to incremental revenue? His answer is immediate, not eventual.
Wallace explains that a firm’s forecasted topline revenue is never driven by paid media alone; brand quality, word of mouth, promotional effects, and seasonality all play a role, but paid media, especially for younger brands, is still a significant driver. That incremental contribution comes from every stage of the funnel, not just the bottom. Relying on last-click ROAS as the bonus metric inadvertently starves the firm’s growth, because it fails to credit top and middle-funnel investment, leading teams to underfund exactly the media that builds long-term revenue.
In this video, you’ll learn:
Why your current reliance on last-click metrics might be starving your firm’s growth potential
The distinction between organic revenue drivers like brand quality and the impact of paid media
How to better align marketing incentives with company-wide financial objectives
The necessity of funding top and middle funnel campaigns to achieve top-line growth targets
TIME STAMPFull Video Transcript: Shifting Marketing Bonuses to Incremental Revenue Explained
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In this video, John Wallace explains why marketing bonus structures should move from last-click ROAS to incremental revenue right away.
[0:00 – 0:10] Shifting from ROAS to Incremental Revenue
Sometimes we get asked the question when should I shift my marketing team bonus from a ROAS based metric over to incremental revenue and for me clearly the answer is yesterday.
[0:11 – 0:39] Understanding Revenue Drivers
Here is where incremental revenue comes into play. Quite often the firm has made a commitment, they made a forecast to outside investors or maybe even to Wall Street of their total revenue, and not all of that revenue is going to be driven by paid media. We know this: some of the revenue is going to come from the brand’s base quality, some of the word of mouth, some of it is going to come from promotional effects, how well they do during those promotions, and some of the seasonal effects. But a significant portion, especially for younger brands, of their topline revenue is going to be influenced by paid media.
[0:40 – 0:59] The Impact of Last Click ROAS
The incremental revenue driven by this paid media will come from every stage of the funnel, from the top of the funnel, the middle of the funnel, even the bottom of the funnel. And we know for a fact that relying on last-click ROAS inadvertently starves the firm’s growth, and it leads to neglecting the proper investment in the middle of funnel and top of funnel media.
[1:00 – 1:24] Aligning Incentives for Growth
So it is really essential to recognize and align incentives correctly, particularly the bonus structure. We need to reward marketing teams that have boldly funded the top of funnel in profitable ways to help the firm hit their topline objectives. It will support their growth, and that contribution of additional incremental revenue will ultimately help the firm hit their topline objective and hit their forecast.
Key Lessons: Aligning Marketing Incentives With Incremental Revenue
Prioritize incremental revenue: Transitioning away from last-click ROAS allows marketing teams to focus on revenue that is actually driven by their efforts, ensuring they contribute directly to the forecasts promised to investors.
Avoid growth starvation: Last-click models often lead to neglecting the top and middle of the funnel; proper investment across the entire funnel is essential to avoid limiting the firm’s overall growth.
Align incentives correctly: To meet ambitious growth goals, bonus structures must be redesigned to reward marketing teams for making bold, profitable investments in top funnel media that contribute to long-term incremental revenue.
