Marketing Mix Allocator
Model your marketing budget allocation based on ROAS, capacity, and diminishing returns. Built for Heads of Growth.
Playbook Guidance
This tool implements the 2025 Campaign Planning Playbook framework.
Key Principles
- Triangulated Measurement: Combine Platform, MMM, and Incrementality data
- 70/20/10 Mix: Balance Core, Growth, and Experimental channels
- Adstock Effects: Account for carryover impact
- CAC Payback: Target ≤6mo for SaaS, ≤3mo for E-com
Related Tools
- CAC Payback Calculator - Calculate recovery time
- CLV Calculator - Estimate lifetime value
Budget Configuration
Channel Allocation
| Channel | Category | Current Spend | ROAS | Max Budget per Channel |
|---|
Results & Analysis
Portfolio Balance (70/20/10 Framework)
Optimized Allocation
| Channel | Optimized Spend | % of Budget | ROAS | Projected Revenue |
|---|---|---|---|---|
| Click "Optimize Mix" to see results | ||||
Budget Allocation
Diminishing Returns
Frequently Asked Questions
What is diminishing returns in marketing?
Diminishing returns means that as you increase spend in a channel, each additional dollar generates less return than the previous one. For example, your first €10,000 in Facebook Ads might deliver 5x ROAS, but the next €10,000 might only deliver 3x as you exhaust your best audiences.
How do I determine channel capacity?
Channel capacity is the maximum efficient spend level before ROAS degrades significantly. Calculate it by tracking ROAS at different spend levels. When ROAS drops by 30-50%, you're near capacity. Consider audience size, search volume, and competitive saturation.
What is the Response K parameter?
Response K controls how steeply ROAS declines with increased spend. K=0 means flat (no diminishing returns), K=1 means moderate decline, K=2+ means steep decline. Mature, saturated channels typically have higher K values (0.8-1.2), while scalable channels have lower K (0.2-0.6).
How accurate are these projections?
This tool provides directional guidance based on your inputs. Real-world performance varies due to seasonality, competition, creative fatigue, and market dynamics. Use this as a strategic planning tool, not a guarantee. Test incrementally and validate assumptions with real data.
Should I optimize for revenue or profit?
Use the objective slider. Revenue focus prioritizes growth and market share, accepting lower margins. Profit focus prioritizes efficiency and profitability. Most businesses benefit from a balanced approach (slider in the middle) unless you're in hypergrowth mode or facing cash constraints.
How often should I rebalance my mix?
Review monthly, rebalance quarterly. Market conditions change, channels saturate, and new opportunities emerge. Monitor actual ROAS vs. projections weekly. If reality diverges by >20%, update your model and re-optimize.
What is triangulated ROAS and why does it matter?
Triangulated ROAS combines Platform-reported (SKAN/MTA), MMM-modeled, and Incrementality-tested ROAS data using weighted averages. Post-iOS 14.5, no single measurement is fully reliable. Triangulation (50% MMM, 30% Platform, 20% Incrementality) provides a more accurate view of true channel performance, reducing forecast errors by 35%.
What is the 70/20/10 framework?
The 70/20/10 framework splits your budget across three categories: 70% Core (proven, scaled channels like Google Search, Meta, CRM), 20% Growth (scaling opportunities like new markets or TikTok), and 10% Experimental (testing new formats, influencers, AI tools). This balance delivers 12-15% higher ROI than static allocations.
What is the Adstock coefficient?
Adstock represents how long a campaign's effects persist after spending ends. For example, TV ads (adstock 0.64) have lasting brand impact, while paid social (adstock 0.15) fades quickly. Higher adstock means your budget continues generating returns weeks after the campaign ends, which affects multi-period planning.
How do I interpret Data Quality settings?
High: First-party data, CRM, or validated incrementality tests. Medium: SKAN postbacks or blended platform data. Low: Heavily modeled or incomplete attribution. Lower quality reduces the weight given to that channel's ROAS in triangulation calculations.
Marketing Mix Optimization: A Complete Guide for Growth Teams
What is Marketing Mix Optimization?
Marketing Mix Optimization (MMO) is the strategic process of allocating budget across channels to maximize ROI while accounting for diminishing returns, channel capacity, and cross-channel effects. Unlike simple budget allocation, MMO uses advanced modeling to predict how incremental spend in each channel will impact overall performance, helping you avoid overspending on saturated channels and identify untapped opportunities.
The 70/20/10 Framework Explained
The 70/20/10 framework divides your marketing budget across three strategic categories: 70% Core (proven, scaled channels like Google Search and Meta Ads), 20% Growth (scaling opportunities like new markets or emerging platforms), and 10% Experimental (testing new formats, channels, or audiences). This balance typically delivers 12-15% higher ROI than static allocations by ensuring sustainable growth while exploring new opportunities.
Understanding Diminishing Returns in Marketing
Diminishing returns occur when additional spend in a channel generates progressively lower returns. This happens as you exhaust your best-performing audiences, keywords, or placements. The Response K parameter quantifies this effect: higher K values (0.8-1.2) indicate steep declines typical of mature channels, while lower K values (0.2-0.6) suggest scalable opportunities. Understanding diminishing returns is crucial for setting realistic growth expectations and avoiding budget waste.
Channel Capacity and Budget Planning
Channel capacity represents the maximum efficient spend level before performance degrades significantly. Factors affecting capacity include audience size, market saturation, competitive intensity, and platform algorithms. Calculating capacity helps prevent overspending on high-performing but limited channels while identifying opportunities in underutilized channels. Regular capacity analysis ensures your budget allocation stays aligned with market realities.
Triangulated Attribution for Better Decisions
Modern marketing requires combining multiple attribution methods: platform data (immediate but biased), Marketing Mix Modeling (statistical but delayed), and incrementality testing (accurate but limited). Triangulated attribution weights these sources by data quality to provide more reliable ROAS estimates. This approach reduces the risk of over-optimizing for platform-reported metrics that don't reflect true business impact.
Industry Benchmarks and Best Practices
Marketing mix performance varies significantly by industry and business model. E-commerce typically allocates 60-70% to performance channels, while B2B SaaS focuses 40-50% on demand generation. Subscription businesses often invest heavily in CRM and retention marketing (20-30%), while marketplaces prioritize brand building. Understanding industry benchmarks helps set realistic targets and identify optimization opportunities specific to your business model.
Marketing Budget Tool: Optimize Ad Spend Allocation
A marketing budget tool helps you allocate spend across channels based on data, not guesswork. Most companies divide budgets arbitrarily (50/50 Google/Meta, or equal splits across all channels) without considering marginal ROI-the return on your next euro of spend. Advanced budget tools like this calculator model diminishing returns, channel capacity constraints, and cross-channel effects to recommend optimal allocation that maximizes total ROAS while staying within your constraints.
The foundation of effective budget allocation is marginal ROI analysis. Instead of comparing average ROAS across channels, you need to know: if you increase Meta spend by €10,000, what's the incremental return compared to increasing Google spend by the same amount? Channels with identical average ROAS can have wildly different marginal returns due to saturation. The Marketing Mix Allocator above uses diminishing returns curves (Response K parameter) to model this accurately, showing how efficiency degrades as you scale each channel.
How to use this marketing budget tool effectively: start with your current allocation and performance data-enter each channel's ROAS, current spend, and capacity limits. Configure diminishing returns by testing different K values and comparing tool outputs to historical performance (when you increased spend, did ROAS drop faster or slower than expected?). Use industry presets as starting points, then customize based on your data. Review the allocation recommendations and adjust for strategic constraints (e.g., maintain brand presence in certain channels). Reforecast quarterly as market conditions and performance change.
Budget allocation best practices: follow the 70/20/10 framework-70% core (proven channels), 20% growth (scaling opportunities), 10% experimental (testing). Don't over-allocate to one channel-diversify across 4-6 channels to reduce platform risk. Account for seasonality and competitive pressure-adjust capacity estimates based on market dynamics. Model scenarios-test conservative (profit-focused), balanced (blend), and aggressive (growth-focused) scenarios to understand trade-offs. Track actuals vs. plan monthly-reconcile forecasts with reality and recalibrate.
Common ad spend allocation mistakes: splitting budget equally without considering performance differences (wastes spend on weak channels), ignoring diminishing returns (assuming linear scaling forever), not modeling cross-channel effects (brand spend lifts search performance), using average metrics instead of marginal (past performance ≠ future returns), and setting static allocations (should rebalance every 90 days based on latest data). This tool addresses these by using response curves, capacity constraints, and triangulated attribution to provide realistic, actionable recommendations.
ROI tracker methodology: this calculator functions as both a budget allocator and ROI tracker by modeling expected ROAS for each channel at different spend levels. Enter your channel performance data, and the tool calculates: total expected revenue across all channels, blended ROAS for your optimized mix, marginal ROAS by channel (what you'd get from additional spend), and recommended allocation percentages. Use this monthly to validate actual performance vs. forecasts and identify which channels over or under-delivered on projections. The tool exports results to CSV for easy integration into your reporting workflows.
An effective marketing budget tool transforms budget planning from an annual guessing game into a quarterly data-driven process. By modeling diminishing returns, channel capacity, and attribution effects, you can confidently allocate millions in ad spend with clear visibility into expected returns. Combine this with the CAC Payback Calculator to ensure your allocation strategy maintains profitable growth economics across all channels.
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