❓ If your marketing activity has high ROI, does it mean that you should invest more in it?
It depends.
It could be that you are close to saturation already, and further investments don't deliver high returns anymore. Or it could be that you are far from saturation.
To analyse the situation, you can
1️⃣ Check where you are in the marketing response curve.
2️⃣ Look at the marginal ROI for the activity.
Marginal ROI tells you how many euros/dollars the next invested euro/dollar is expected to bring you. Mathematically, it is the slope of the curve at the point where you are in the marketing response curve. The attached picture illustrates this dynamic.
Response curves are one of the basic outputs of Marketing Mix Modeling, and many data-driven marketing teams already leverage them in marketing optimization.