Jerry Daykin started a Twitter thread: «ROI is a terribly misunderstood thing in media/advertising. Chasing high ROIs can mean running your business into the ground/minimising growth, and in fact a high ROI is often a sign you are underinvesting in a channel. ROIs aren’t static, they shift as your budgets do. »
I replied with this line from How Not to Plan by Les Binet and Sarah Carter: «As you spend more on advertising, it often gets more effective (sales and profits generated go up), but less efficient (ROI goes down). That’s the nature of diminishing returns. …the highest ROIs tend to come from small budgets»
and «To make a direct mail analogy, your house list (your existing customers) will have the best ROI, but if you want to expand your customer base (and revenue) you have to use less perfectly targeted lists. You do want to weed out the least efficient (especially negative ROI) lists.»
Articles of Interest 