How to Decide Where to Put Your Next $10,000 of Marketing Budget
Short answer
Do not give the next $10k to the channel with the highest reported ROAS. Allocate it to the channel (or tactic) with the highest expected incremental return after accounting for diminishing returns, saturation, and business constraints.
Average ROAS and platform dashboards are poor guides for marginal decisions. The right question is: what is the expected return of the next dollar in each place I could spend it?
A simple decision framework
- List current channels and their recent marginal performance (not just average).
- Estimate saturation risk (frequency, audience penetration, recent CAC trend).
- Factor in strategic needs (new-customer acquisition vs retention, brand vs performance).
- Run a quick scenario: what happens if I put the $10k into channel A vs B vs testing a new channel?
- Prefer decisions backed by incrementality data or MMM coefficients when available.
Practical rules of thumb
- If a channel still shows strong incremental returns and low saturation → scale it.
- If CAC is rising sharply and frequency is high → pause aggressive scaling and test creative or new audiences.
- Always keep a test budget for learning.
- Protect a baseline of brand or upper-funnel activity if it supports lower-funnel efficiency.
Better than gut feel
Response curves from Marketing Mix Modeling or recent experiment results let you estimate the marginal ROI of the next dollar in each channel. That turns the $10k decision from opinion into evidence.
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