What's the Marginal Value?

This article explains what's the Marginal Value, use cases you can apply to it, and how to read its output.

Marginal value is determined by a specific point in a function that incorporates all incrementality results related to changes in spending across different Channels, Countries, and Operating Systems (OS). This point represents the level of spending at which you are currently operating. It is important to note that marginal value is not simply a direct comparison of changes in spending against changes in performance.

Marginal refers to the estimated cost of the next result, which tells us how much we would need to pay to achieve one more conversion at the current level of spend.

In other words, if we spend an additional dollar now, how much would the next conversion cost us.

When Comparing Marginal value to the Contribution Value, the first one tells you how much your last (or next) user cost you, and the latter - what was the overall value of the source. 

Using the Marginal value you can easily answer a question whether you should continue to scale up a certain channel/campaign, or if you are on a point of diminishing returns and it is better to keep your spend as is. 

Use Cases for Marginal Values:

• Understanding the additional value gained from every channel
• Identifying cannibalization
• Diminishing returns 
• Opportunities to scale up spends