In an ideal world, every campaign we run would drive profitable, incremental sales. 

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Profitable: The cost of acquiring the sale leaves a healthy margin after COGS.

Incremental: The sale is genuinely net-new, not one you would have captured anyway.

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That is the gold standard. But the modern-day reality is a different story.

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The truth is that ad platforms are taking credit for sales you were going to get organically, and most brands don’t actually know what their true profit margins are.

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If you’re an ecommerce founder wondering where to focus your efforts to fix this, this article is for you. We’re going to break down the pros and cons of tracking profitability vs. incrementality, revealing which one actually drives growth.

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Profitability Tracking - Pros & Cons

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When we talk about profitability tracking, we usually mean media buyers tracking POAS (Profit on Ad Spend) and optimising their budget allocation based on that metric.

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It’s calculated by taking the net margin and factoring in the ad costs for each sale.

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What are the pros of optimising for POAS: 

• It protects your bottom line. You immediately stop scaling campaigns or products that are bleeding cash.

• It trains the algorithms. It pushes Meta and Google to prioritise selling your higher-margin products.
  
  
• It provides a safety net. During heavy discount periods, it ensures you don’t accidentally overscale and lose money on every order.

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The Cons: 

• It’s blind to cannibalisation. POAS doesn’t tell you if that customer was going to buy through an organic channel anyway.

• It encourages lazy media buying. Agencies often load spend into branded keywords and heavy retargeting to guarantee a high POAS, whilst completely neglecting net-new customer acquisition.

• The data gap. In reality, many digital marketing teams don’t actually have an accurate, real-time read on product-level profitability to feed back into the platforms.
   
• It ignores Lifetime Value (LTV). POAS is a snapshot of day-one profit. This forces a short-term mindset that can cause you to turn off top-of-funnel campaigns that actually build your future pipeline.

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Optimising for Incrementality - Pros & Cons

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When you optimise for incrementality, you focus purely on finding and scaling campaigns that drive net-new revenue. 

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These are sales you simply wouldn’t have received if those specific ads hadn't been running.

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What are the Pros of tracking incrementality: 

• It exposes the organic tax – Testing incrementality reveals exactly how much you are paying ad platforms to claim sales you already had. 

• It unlocks scalable growth - When you know for a fact that your campaigns are driving net-new revenue, you can scale your budgets with total confidence.

• It doesn’t rely on pixel tracking – The gold standard of incrementality testing uses holdout tests and actual CRM data. This finally stops the ad platforms from marking their own homework.

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The Cons: 

• It takes time - Running holdout tests takes time to reach statistical significance, especially if you sell a high-ticket product with a long consideration period.

• In-platform performance will look much worse. Your in-platform numbers will look worse because you are no longer paying for 'easy' sales. You must be willing to accept lesser surface-level performance to find out what's actually driving new revenue.

• It requires a good understanding of data – You need a firm grip on your customer data and third-party tools to run these tests effectively (although that would be the case with profit tracking). 

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Our Verdict

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At Adnomics, we don’t believe you have to choose between incrementality and profit. 

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But there is a strict order of operations: incrementality must always come first. 

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There is zero value in hitting a "profitable" Cost Per Order (CPO) if you are simply paying ad platforms for sales you would have captured organically anyway.

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Our recommendation as an ecommerce digital marketing agency is to: 

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 Isolate the Incrementality: Use regular holdout and geo-lift tests to strip away platform noise. Find out exactly which campaigns are actually driving net-new customer behavior.

Overlay the Profitability: Once you find the true incremental growth, ruthlessly optimise those specific ads against your margins. 
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When you combine continuous incrementality testing with rigorous profit targets, you stop allowing Google and Meta to mark their own homework.

You finally bridge the gap between dashboard vanity metrics and actual e-commerce growth – scaling confidently based on true Revenue Reality.

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