Understanding Incrementality in Advertising Spending

In this episode of The Ecommerce Playbook Podcast, Richard Gaffin and Taylor Holiday dig deeper into the Spending Power Model—breaking down why the next dollar you spend doesn’t always produce the same return.

They explore concepts like the marginal frontier (the moment your next dollar becomes unprofitable), spending power, and how to balance short-term profitability with long-term growth. Taylor shows how to evaluate whether to optimize for revenue, contribution margin, or lifetime contribution—and why these decisions always tie back to your financial goals.

You’ll learn:

• What the “marginal frontier” really means for your ad spend

• Why not all dollars in create the same dollars out

• How to use spending power as a scale metric for your brand

• The tradeoffs between maximizing revenue vs. profitability

• How this framework helps align boardroom strategy with media buying decisions

Show Notes:

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