Free marketing tool
Should You Increase Your Marketing Budget?
Estimate whether your next increase in marketing spend still makes economic sense. Compare marginal ROAS with your break-even or target return before scaling.
Enter your budget assumptions
Use comparable spend and revenue periods. The tool is deterministic and does not make causal or incrementality claims.
How to read the budget decision
Average ROAS
Efficiency of existing spend: current revenue divided by current marketing spend.
Marginal ROAS
Return from the next increment of spend: incremental revenue divided by incremental spend.
Break-even ROAS
The minimum return implied by contribution margin: 1 divided by the contribution margin decimal.
Decision threshold
The minimum return the business requires: your target ROAS, or break-even ROAS when no target is supplied.
Frequently asked questions
When should I increase my marketing budget?
Consider increasing spend when marginal ROAS is comfortably above the return your contribution margin or business target requires, while checking data quality and other constraints.
What is break-even ROAS?
Break-even ROAS is the minimum revenue-to-marketing-spend return implied by contribution margin. It is calculated as 1 divided by the contribution margin decimal.
What is marginal ROAS?
Marginal ROAS is the projected incremental revenue divided by the incremental marketing spend. It describes the economics of the next increase, not the average of existing spend.
Can ROAS decline while scaling is still profitable?
Yes. Marginal ROAS can be below current average ROAS and still remain above the required threshold. This often indicates declining efficiency without necessarily making the next increase uneconomic.
What contribution margin should I use?
Use the percentage of revenue remaining after variable costs for the business or product context represented by your revenue inputs.
What happens when marginal ROAS falls below break-even ROAS?
The additional spend does not meet the minimum return implied by the entered contribution margin, so the tool labels the decision “Don’t scale.”
Understand the return from the next unit of spend
Calculate marginal ROAS separately, then use this tool to compare it with your economic threshold.