What I had in mind was marginal utility analysis from economics. If your ROAS target is $2.20 and your advertising generates $3.30, you have a surplus that can be reinvested in additional advertising. At some point the marginal yield will start declining. But even as you get to $2.50, $2.40, $2.30...you are still above your target. The result of this is a higher ad budget with more sales, representing growth at a desired level of profitability.
What I had in mind was
What I had in mind was marginal utility analysis from economics. If your ROAS target is $2.20 and your advertising generates $3.30, you have a surplus that can be reinvested in additional advertising. At some point the marginal yield will start declining. But even as you get to $2.50, $2.40, $2.30...you are still above your target. The result of this is a higher ad budget with more sales, representing growth at a desired level of profitability.
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