In marketing analytics, ROI (Return on Investment) is everywhere. It tells you how many euros you earned per euro spent. But when it comes to budget allocation and media optimization, the real game-changer is Marginal ROI (MROI) — the return on the next euro spent.
This simple shift from total to incremental perspective transforms how you evaluate and optimize your media mix.
But marketing response is not linear. Every channel eventually saturates — the more you spend, the smaller the incremental impact.
Where: - R = response (e.g., sales, conversions) - X = spend - K = half-saturation constant (spend level where response = 50% of max)
About the author
Cyril Noirot
Lead Data Scientist
Freelance data scientist. I design and ship decision systems — forecasting, pricing, marketing measurement, optimization.