The CEO wants to triple paid media spend next quarter. How do you decide whether and how to scale?

What the interviewer wants to hear

• Check unit economics: CAC, LTV, payback and margins
• Understand diminishing returns and marginal CAC
• Find headroom: impression share, new audiences, new channels
• Scale in steps and monitor
• Use incrementality tests and MMM
• Check operational capacity and creative supply

Model answer

I would first look at unit economics: current CAC, LTV, payback period and margin, so we know the maximum CAC we can afford. Then I would estimate how CAC changes with spend, because returns usually diminish. Doubling spend in one channel rarely doubles results, so marginal CAC is what matters. I would check headroom, such as lost impression share in search, untested audiences and new channels like YouTube or TikTok. Rather than tripling overnight, I would scale in steps, for example 20 to 30% per week per channel, watching marginal CAC and lead quality. I would use lift tests or MMM to make sure growth is real, not just credit taken from organic. Scaling also needs more creative variety and enough capacity in sales or fulfilment. I would then present the CEO with a scenario plan showing expected customers and CAC at different spend levels.

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