Tools / II Optimization
Marginal ROI calculator: find your optimal ad spend.
Find the daily spend that maximizes profit, and the point where it stops. It runs in your browser and nothing gets uploaded.
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About this tool
What Marginal Efficiency calculates.
Marginal Efficiency finds the daily spend where paid media stops paying for itself, by modeling diminishing returns directly. Ad platforms report your average CPA. The number to decide on is your marginal CPA, the cost of the next conversion, which is always higher when returns diminish.
- The model
- Paid conversions = a times spend to the power B. B sits between 0.2 and 0.95 and sets how hard returns diminish. You choose it as a scenario, because noisy account data can't pin it down. The coefficient a comes from your current spend, blended CPA and the share of conversions that are truly paid.
- The formula
- Average CPA at spend S is S^(1-B) / a, and marginal CPA is average CPA divided by B, so it's always higher when B is below 1. Profit at S is conversions times contribution margin, minus S. Profit peaks where marginal CPA equals your contribution margin, and break-even spend is where it falls to zero. The tool tells you whether to spend more or less from where you are, and a sensitivity table shows which input moves peak profit most.
- Expected input
- No CSV needed. Enter your daily spend, the blended CPA your ads platform reports, contribution margin per conversion (your break-even CPA), the share of conversions that are truly paid and the diminishing-returns exponent B. Presets load typical DTC apparel, SaaS lead gen and supplement profiles, and the copied link saves your scenario.
- Limits
- One exponent governs the whole curve, and real accounts kink at audience boundaries. Contribution margin is treated as a constant profit per conversion. Blended CPA from Ads Manager includes organic conversions, and the paid-share input is what discounts them. Monthly figures are daily figures times 30.
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Next
- 01Ad Scale ScatterPlot every ad on log spend by CPA to see what to scale, what to wait on and what to kill.Optimization
- 02Creative PaceCheck whether your creative volume keeps up with your spend.Production
- 03Cash Flow ProjectionModel cohort payback and how much cash your growth rate needs.Measurement
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