Where should the next €1M of your mobile growth budget go?

TL;DR

• Mature app companies should evaluate growth investment across acquisition, activation, retention, and measurement, rather than optimizing each area in isolation.
• The key question is not where to put the next €1 of paid media, but where the next €1 of growth investment will create the most incremental customer value.
• CPA and ROAS alone can hide customer value. A more expensive acquisition channel may produce more valuable customers through stronger repeat behavior or retention.
• Measurement is part of growth allocation. If marketing spend cannot be reliably connected to downstream customer value, investing in better measurement may create more value than increasing media spend.
• REPLUG’s framework compares growth opportunities using five questions: incremental customer value, evidence, required investment, time-to-learning, and durability of the upside.
• The goal is to allocate budget based on expected marginal customer value per incremental € invested, whether the best opportunity sits in paid acquisition, activation, retention, or measurement.

As apps mature, the hardest growth decision increasingly becomes where to allocate incremental investment across the entire customer journey.

Companies have become extremely sophisticated at optimizing individual channels and functions. They are considerably less sophisticated at comparing the marginal value of investing across acquisition, activation, retention and measurement.

And without the right measurement infrastructure, they often don't have enough information to make that decision reliably.

Give the CMO €1M

Imagine being the CMO of a large consumer app with an established brand. The company already invests €10M a year in growth. Management gives you another €1M in incremental capital to drive revenue growth.

With what level of certainty can you decide how to put the € 1 M to maximize return?
Google Ads? Meta? A billboard in Times Square? Creatives? CRO? App Store Optimization? Retention? Reactivation offers?

To decide where to put the money, ask: “Which investment creates the highest incremental customer value?” 

However, for many companies, it’s becoming increasingly difficult to answer this question with a good level of certainty, without investing weeks in analysis. 

The real issue is that many organizations mistakenly confuse the question “Where should I put my next €1 of paid media?” - often easy to answer - with “Where should I put my next €1 of growth investment?”, which instead is the real point to ask.

Large apps have become very good at local optimization

The reason answering the specific question is getting harder isn't that people aren't smart enough. On the contrary, teams are getting smarter and smarter, especially with AI and the availability of big data. The real issue is that large organizations are sophisticated.

Because of this, they can make poor capital-allocation decisions.

Local optimization can be successful while overall capital allocation is inefficient. Why? Mature organizations can have performance marketing teams optimizing by CAC/CPA/ROAS, CRM teams optimizing engagement, product teams managing retention, agencies optimizing specific marketing channels (and often their own interests), and so on.

Every team has its own dashboard and KPIs, and each tries to improve its own KPIs.

Performance lowers CAC by 5%, CRM improves engagement by 10%, Product improves activation by 3%. All three teams had a successful quarter.

But we still don't know whether the company put €3M, €1M and €500k into the right opportunities.

So the real difficulty lies in the different areas treated as separate systems.

• Who determines whether €500k creates more value in acquisition, activation or retention?
• Who compares a 10% improvement in onboarding against another €500k of media?
• Who knows whether improving second-purchase behavior is economically superior to lowering first-purchase CPA?
• Who can prove whether the largest media investment actually creates incremental customer value?

That's where the executive problem begins.

More acquisition eventually risks becoming expensive growth

I’ve spent the past decade scaling user growth for mobile organizations of all sizes, especially medium-large ones, and I’ve seen this problem over and over again.

Marginal CAC increasing while trying to scale, audience saturation, low incrementality, channel diversification implemented wrong, false confidence created by platform numbers, optimization automation. Eventually, the company questioned whether investing in paid user acquisition was still the right move.

Paid acquisition is extraordinarily powerful. That's why companies pour millions into it. Especially in 2026, in such a competitive market where standing out with branding alone is difficult, performance marketing is crucial for acquiring customers.

But that doesn’t mean paid acquisition is always the right answer for every brand, at every stage.

And most importantly, the first €1M and the tenth €1M invested into the same growth lever have different economics. It applies equally to Meta, retention, CRO, creative, CRM, etc. Every opportunity eventually has a marginal return curve.

At each new level of investment, leadership should compare the expected marginal return of continuing to fund the current lever with opportunities elsewhere.

And eventually the executive question becomes: “Is acquisition still the highest-return place for additional capital?”

The metric that changes the answer: customer value

In a recent project with a large European consumer business, the biggest delivery service in the Nordics, we analyzed acquisition together with early repeat behavior.

Around 40–46% of customers who made a first purchase returned for a second purchase within 14 days.

Yet acquisition couldn't reliably be connected to that repeat behavior.

The project analysis supports those numbers: approximately 40% 14-day repeat for one business and 46% for the other, with average time to second purchase of 3.7 and 1.5 days, respectively.

Imagine:

• Channel A has a CPA of $30 and 14-day repeat = 20%
• Channel B has a CPA = $40 and 14-day repeat = 50%

Which channel has the more expensive customer? Suddenly, CPA alone isn't enough.

The actual analysis estimated that a +5% improvement in second-purchase rate represented a potential ~$50–$100M incremental revenue opportunity on approximately $2.3B total revenue.

What looks like a minor retention improvement can represent a larger revenue opportunity than another acquisition optimization project.

We’re still talking about opportunity size rather than pure profit, but this is the direction your analysis should take when estimating incremental customer value.

The bigger problem: you can't allocate what you can't measure

In the case above, however, identifying the huge revenue-potential increase was the easy part.

Once again, large organizations are sophisticated, not stupid. BI teams can analyze large amounts of data and uncover insights when pointed in the right direction.

The real issue was that up to 70% of marketing spend couldn't be linked to customer value. We classified this spend as unverified, including low-visibility programmatic investment and Meta spend where platform and GA4 signals materially disagreed.

Our analysis didn’t directly prove that 70% of the budget was wasted or brought zero value (even if there were some evidence). But it proved that leadership was allocating a very large amount of capital without sufficient evidence about its contribution to customer value.

How can leadership decide where the next €1M belongs when it cannot reliably connect the previous €1M to customer value?

Sometimes the company has demand before it has the infrastructure to monetize it

A company can have enormous existing demand and ambitious growth plans while lacking the decision infrastructure required to allocate incremental investment confidently.

I experienced this firsthand in a recent case with a large European digital medical platform that had grown substantially through organic/web-first demand and was entering a new phase involving mobile, paid acquisition and subscription monetization.

In our analysis, we found that the mobile tracking and measurement tool saw installs, but lacked meaningful post-install conversions.

For this reason, the core booking event wasn't consistently used for optimization.

Channels were optimizing on installs without downstream business signals; iOS attribution had major gaps, no platform had complete funnel visibility.

As a result, conversion ownership was fragmented between different systems.

The project concluded that the real challenge went beyond attribution tooling: the existing measurement infrastructure wasn't mature enough to support scalable, performance-driven mobile growth.

In this case, the company didn't first need more acquisition. What it needed was the ability to understand what acquisition produced.

That’s why, before asking how much more you can spend, companies need to ask how confidently they can measure what the current spend creates.

The four places where growth capital competes

The examples I just mentioned made me think differently about where the growth budget actually competes.

When a company decides to invest another €1M in growth, that money could improve how many customers it acquires, how many acquired customers actually become valuable customers, or how much value it captures from them over time.

And before making any of those decisions, the company needs enough measurement to understand where the largest opportunity actually sits.

This gives us four areas to look at when deciding where the next €1 should go: acquisition, activation, retention and measurement.

1. Acquisition: how much additional customer value can we create by acquiring more customers?

This includes existing-channel scale, new channels, new markets, creative, ASO and other acquisition opportunities.

Questions like “Is there still efficient headroom?” or “What happens to marginal CAC as spend increases?” and “Can we reach incremental audiences?” are all part of this are

The investment might be another €1M in media, a new channel, more creative capacity or market expansion.

2. Activation: how much more value can we create from the demand we’re already generating?

You’re already paying to bring users into the funnel. How many actually reach the meaningful business event?

Depending on the company, that could be first order, booking, trial, subscription or another activation event.

Here, the investment could be in better onboarding, CRO, web-to-app journeys, paywall optimization, product changes, but also initial offers, incentives, etc.

Just ask yourself: if I can increase activation from 20% to 22%, how does that opportunity compare with buying 10% more traffic?

3. Retention: how much additional customer value can we create from customers we’ve already acquired?

Second purchase, churn, subscription renewal, frequency, engagement, reactivation.

The investment might be lifecycle initiatives, product improvements, CRM, loyalty, engagement, subscription optimization, reactivation initiatives.

If a +5% improvement in repeat behavior means tens of millions in potential incremental revenue, it deserves to compete for investment with the next acquisition campaign.

Those first three areas are places where customer value can be created/captured, while the next one has a different economic function: measurement improves decision quality across them.

4. Measurement: how much confidence do we have in the decisions we’re making across the other three?

Sometimes the investment means increasing clarity to enable allocation across the customer journey.

Investment here could mean attribution, experimentation, analytics, MMP infrastructure, backend integration, unified reporting, incrementality testing, or bringing in an external company to evaluate the current status quo.

If a meaningful share of your existing budget cannot be connected to customer value, improving decision quality may deserve investment before committing additional capital.

So the next €1 doesn’t automatically belong to acquisition. It has four possible destinations: acquiring more customers, converting more of the demand you’ve already generated, increasing the value of existing customers, or improving the information you use to decide between those opportunities.

The difficult part is comparing them.

CAC, activation rate, repeat rate and measurement quality don’t live on the same dashboard and can’t be compared directly.

So how should a CMO decide?

An actual budget allocation framework

The most important task of a marketing leader responsible for key budget decisions is to ask the right questions when allocating funds.

For each proposed growth investment, there are 5 questions to ask:

Remember, at this stage we’re evaluating opportunities under uncertainty. The objective isn't a mathematical scoring system, but an evaluation framework that helps us make the right decision.

Ultimately, defining success comes down to the marginal return KPI.

You can’t compare Meta ROAS with CRM engagement rate or onboarding conversion. Those metrics aren't comparable.

What you can analyze, tho, is the expected incremental customer value per incremental € invested.

I am not saying every company at every stage can calculate this KPI perfectly, with a unique formula. Often, companies can’t do that, actually.

But if your organization can’t reasonably estimate the marginal value of a €500k investment, you have identified a measurement problem that should influence the investment decision.

A concrete thought experiment

Let’s go back to the €1M additional budget scenario. The CMO has four options for investing the budget.

Option A: €1M is invested in more paid acquisition

Expected incremental customers: X
Marginal CAC: X
Confidence: high

Option B: €300k invested in an activation project

Potential +X% conversion
Revenue opportunity: X
Confidence: medium

Option C: €500k invested in a retention program

Potential +5% repeat rate
Revenue opportunity: X
Confidence: medium/high

Option D: €250k invested in measurement infrastructure

No immediate direct revenue
But enables reliable allocation of €10M existing annual spend

Which is the (real) growth investment? The reasoning here must be qualitative. Acquisition has high confidence and fast impact, but marginal returns are declining.

Activation has potentially significant upside and requires less capital, but confidence is moderate.

Retention has the largest estimated revenue opportunity, but evidence that a specific intervention can cause the improvement is weak.

Measurement produces little direct revenue, but the company is currently allocating €10M with low confidence.

There may be no objectively correct answer with the information currently available.

Maybe the correct first investment is €100k to reduce uncertainty before allocating the remaining €900k.

The organizational consequence

In big and sophisticated organizations, the growth budget often follows the org chart: marketing owns media, product owns onboarding, CRM owns retention, BI team owns measurement, finance controls budgets.

Each department builds its own business case and optimizes its own allocation. Therefore, the company may never actually compare the opportunities you've spent the article describing.

Eventually, the €1M isn't necessarily allocated to the largest opportunity, but to whoever already owns the budget.

This means that the biggest limitation to efficient growth at scale may be organizational rather than tactical.

The additional €1M budget question

I've spent most of my career in performance marketing, so I still believe very strongly in paid acquisition. I really do.

But the longer I work with large apps, the more often I see the biggest growth opportunity sitting somewhere outside the campaign dashboard.

Sometimes it's acquisition, sometimes it's activation, sometimes it's keeping more of the customers you already paid for.

The answer isn't necessarily “invest outside acquisition.” But the answer can absolutely be “put the whole €1M into Meta”; if the evidence says Meta currently has the highest expected marginal return, that's exactly what your framework should recommend.

Sometimes, however, the smartest investment is building the measurement infrastructure that finally tells you which of those is true.

So before approving the next €1M of growth budget, I'd ask one question:

Where will the next €1M create the most incremental customer value?

If you can't answer it, that's probably where the work should start.