Evaluate the next spending increment separately from the existing average
A campaign’s average return can look attractive while another spending increment adds little contribution. A reproducible illustrative example with editable inputs and explicit limits.
A campaign’s average return can look attractive while another spending increment adds little contribution. This worksheet isolates the proposed step. It makes the scaling assumption inspectable without assuming that the economics of existing acquisition transfer unchanged to additional volume.
Define the calculation before using it
Enter additional spend and contribution expected because of that increase. Divide contribution by spend and subtract spend to calculate incremental surplus. Exclude baseline activity from both inputs. Expected incremental contribution remains a forecast until a suitable comparison or experiment supports the causal interpretation.
Work through the synthetic example
An extra 4,000 spend paired with 4,600 assumed additional contribution gives a marginal ratio of 1.15 and surplus of 600. It says nothing about profitability of the original campaign. The narrower question is whether the proposed increase can satisfy that contribution assumption under the chosen cost definition.
| Output | Worked-example result |
|---|---|
| Marginal contribution ratio | 1.1500 |
| Incremental surplus | 600.0000 |
Use the artifact and preserve its assumptions
Open the editable calculator to change the inputs and inspect the sensitivity view. The CSV records synthetic inputs and expected outputs; the JSON fixture keeps the equations available for reproduction. These calculations have been checked against the stated example. No measured campaign data is included.
The sensitivity rows vary only extraContribution by 20% below and above the entered value. They are scenarios, not confidence limits or a forecast distribution. A row outside the model’s constraints is labelled rather than turned into a plausible-looking result. Save the chosen inputs with the decision so another reader can distinguish a changed assumption from a changed formula.
Evidence and limits
Google distinguishes served cost from billed cost after adjustments. Choose and document the cost basis used in this worksheet; its production, contribution and cash assumptions are our teaching examples, not provider benchmarks. See Manage your spend in Google Ads, especially “Access your billing and cost data; View costs from reports”.
The worksheet cannot establish causality or predict auction response. Contribution is overstated if the extra attributed revenue would have arrived without the budget increase.
Background: Annual and quarterly UA budget planning and A Q4 UA Budget Planning Checklist Before the Rush. These existing articles provide context; the present calculation does not verify every archived claim.
