Incrementality Curve
The incrementality curve visualizes the relationship between spend volume and incremental revenue. It is typically non-linear: starting steep (high efficiency), then flattening (diminishing returns), and eventually becoming horizontal or negative (saturation).
The Short Version
A map showing where your next dollar stops working.
Prerequisites
Linear Thinking in a Curved World
Excel spreadsheets assume if you 2x budget, you 2x revenue. Real life follows curves.
If you don't know the shape of your curve, you will scale right off a cliff, spending money for zero incremental gain.
How it works
Plot historical Spend (X-axis) vs Incremental Revenue (Y-axis)
Fit a regression curve (e.g., Logarithmic or Hill function)
Identify the slope at your current spend level
Common Misconceptions
Assuming the curve is a straight line
Extrapolating too far past historical max spend
Ignoring seasonality (The curve shifts up in Q4 and down in Q1)
Frequently Asked Questions
QWhat shape is the curve usually?
It is almost always 'concave down' (diminishing returns). It rarely stays linear for long.
QCan the curve shift?
Yes! Better creative or better targeting moves the entire curve up, meaning you get more revenue at every spend level.