Budgeting & pacing
Marginal efficiency
Marginal efficiency is the return produced by the next unit of budget on a line, as opposed to the average return of everything spent so far. Reallocation decisions should follow marginal efficiency, because a line's strong average can conceal a saturated audience where additional spend performs far worse.
In practice
Averages flatter incumbents. A campaign with a blended £20 CPA may be delivering its last conversions at £45, while a smaller line sits with headroom at £22.
In-flight budget moves guided by marginal thinking protect the overall objective; moves guided by averages usually feed the biggest historical winner past its point of diminishing returns.