Summary
The article explains that performance marketers are increasingly struggling with marginal returns as rising media costs and economic pressure squeeze budgets. As ad spend grows faster than GDP, competition intensifies, and each additional pound generates weaker returns. Marketers now shift focus from average ROI to marginal ROI, which measures the performance of the next unit of spend. This approach exposes diminishing returns earlier and encourages reallocating budgets into underused channels. Automated buying systems from Google and Meta also drive this shift by optimizing across inventory. While marginal ROI improves efficiency, it also challenges traditional measurement models and forces marketers to rethink allocation strategies.
Marketing Week
