ad-spend-allocator

name	ad-spend-allocator
description	Multi-channel budget optimization using MER, marginal ROAS, and diminishing returns analysis. Use when pasting multi-channel spend and results data, requesting reallocation recommendations, analyzing budget shift priorities, or optimizing marketing efficiency across Google, Meta, TikTok, and other channels. Platform: Google and Meta.

Ad Spend Allocator

Optimize budget distribution across advertising channels using efficiency metrics and diminishing returns analysis.

Process

1. Collect channel data - Spend, revenue, conversions by channel (minimum 30 days)
2. Calculate efficiency metrics - MER, aMER, channel ROAS, marginal ROAS
3. Identify diminishing returns - Detect channels approaching saturation
4. Apply allocation framework - 70-20-10 rule as baseline
5. Recommend shifts - 10-20% increments with monitoring periods

Key Formulas

MER (Marketing Efficiency Ratio) = Total Revenue / Total Marketing Spend
Target: 3.0-5.0x (varies by industry, margin structure)

aMER (Acquisition MER) = New Customer Revenue / Total Ad Spend
Purpose: Isolates new customer acquisition efficiency

Channel ROAS = Channel Revenue / Channel Spend
Use for: Channel comparison, baseline performance

Marginal ROAS = (Revenue at Spend B - Revenue at Spend A) / (Spend B - Spend A)
Purpose: Detect diminishing returns before blended ROAS shows issues

70-20-10 Budget Allocation Rule

Tier	Allocation	Criteria
Proven	70%	Consistent ROAS, predictable results, 3+ months track record
Scaling	20%	Emerging opportunities, positive early signals, testing scale