Strategy and goals
Diminishing returns
The point where each extra dollar of ad spend brings less than the dollar before it.
What it is
Every audience and keyword set has a limit. The cheapest results are bought early; more spend reaches people who are less likely to act.
Why it matters
For lead generation and e-commerceIt is the reason scaling is hard. A campaign that works at one budget can turn unprofitable at twice the budget.
In practice
Teams watch the cost of each additional result as spend rises, and use models such as marketing mix modeling to estimate where the curve bends.
A common mistake
Expecting results to grow in line with spend, and reading a falling return as a creative problem when it is a saturation problem.
All terms