Forecasting
S-Curve
The typical shape of ad spend efficiency when plotted on a graph. At low spend, returns are minimal (the learning phase where the algorithm has insufficient data). At mid-range spend, efficiency peaks (the sweet spot). At high spend, diminishing returns set in as the audience saturates. Every channel, campaign, and audience has its own S-curve with a different optimal spend level. Finding and staying in the sweet spot of each curve is the core challenge of budget allocation.
Why it matters
It explains why small budgets underperform and large ones stall. Below the steep section you have not bought enough reach to matter; above it you are paying for impressions that convert nobody.
In practice
Find the inflection by increasing spend in steps and recording marginal return at each. The step where marginal return stops improving is the top of the curve.
Related terms