bettyosias In economics, the law of marginal diminishing returns states that as additional units of resources are added to production, the incremental increase in output will be at a decreasing rate. In other words, with every additional input, the increase in output will be smaller and smaller.
If increasing your advertising/marketing budget increases your sales, that’s great, right? Well, not so fast. You need to evaluate the percentage increase in your marketing budget versus the percentage increase in your sales as a result.
Note that every advertising campaign will eventually reach a point of diminishing returns, where the percentage increase in advertising budgets yields to a decreasing percentage of increase in sales till it becomes negative. If over time, one additional dollar invested in your marketing/advertising campaign starts to meet or surpass the additional revenue generated by your campaign, it may be time to review your marketing strategy as you have surely reached the point of diminishing return.
So, there is more than just budgeting for a successful advertising campaign. Using other types of marketing such as Search Engine Optimization (how to get or increase visibility from search engines?), Keywords marketing (how do you get the right message to the right people at the right time?) and Content Marketing (what is your brand story? How do you bond with your customers?) should be part of a successful marketing campaign.