Every channel has a response curve. The first budget reaches the most responsive audience; more budget reaches people who are less likely to buy, raises frequency and pushes up auction prices. The curve bends, and eventually extra spend costs more than it returns.
You can lift the whole curve with new creative, new audiences or a better offer, but you cannot escape its shape. Finding where yours bends is the core skill of scaling.
Find the spend level where the next rupee or dollar stops paying back, before your P&L finds it for you.
Related terms
- Marginal ROASMarginal ROAS is the extra revenue generated by an increase in ad spend divided by that extra spend.
- Ad frequencyFrequency is the average number of times each person in an audience has seen an ad over a period.
- Creative fatigueCreative fatigue is the decline in an ad's performance as the same audience sees it repeatedly.
Part of the growth marketing glossary by Shiva Sharma.