Your best-performing market might not be your best investment

When international businesses allocate marketing budgets, their strongest-performing markets often get the most attention. They have proven demand, established campaigns and a track record that justifies further investment.

But yesterday’s returns don’t necessarily reveal tomorrow’s opportunities. A market delivering modest results could offer considerable room for growth, while a stronger performer might be approaching saturation, with rising acquisition costs and fewer customers to reach.

1. The biggest market isn’t necessarily the biggest opportunity

Market size and economic growth don’t necessarily indicate how much additional business your company could win. A large, fast-growing market might be dominated by established competitors, while a smaller or more mature market could offer better prospects if customer needs remain underserved or your proposition has a competitive advantage.

To assess a market’s potential and your ability to capture it, consider three factors:

• Demand: How much relevant search demand exists, how is it changing, and what are customers looking for?
  
  
• Competition: How visible are competitors in organic search and paid media? How much does it cost to compete for customers?
  
  
• Your proposition: Does your offering meet local needs? Can you compete on price, quality, convenience or customer experience?

National growth forecasts can conceal differences between regions, customer groups and product categories. A country might appear unattractive overall while particular audiences or locations offer headroom. Assess the addressable opportunity for your business, rather than assuming the largest market offers the greatest reward.

One of Oban’s clients, an international sightseeing operator, considered entering China. But research found that local consumers at that time weren’t familiar with open-top bus tours. The company would need to explain the concept and generate demand before competing for customers, so it postponed entry until the opportunity was more favourable.

2. Yesterday’s winners aren’t necessarily tomorrow’s best investments

A market delivering strong returns might justify further spending. But weaker performance elsewhere could reflect inadequate localisation, limited brand awareness or an ineffective channel strategy rather than insufficient demand.

Headline marketing returns can mislead. What matters is marginal return: the additional value generated by the next investment. Consider two markets:

• Market A generates £5 in revenue for every £1 spent on marketing.
• Market B generates £3 in revenue for every £1 spent.

Market A appears stronger. But suppose a further £10,000 in marketing spend generates an additional £20,000 in revenue in Market A and £40,000 in Market B. The marginal revenue return is 2:1 in Market A and 4:1 in Market B. Despite its lower headline ROAS, Market B offers the greater revenue return on additional investment

Examine how performance changes with spending. Campaign data, controlled tests and incremental measurement help establish whether additional investment generates genuine growth. Look at how acquisition costs, paid search CPCs and conversion rates change as budgets increase.

Revenue alone isn’t enough. Contribution margins, acquisition costs and customer lifetime value reveal whether extra sales translate into profit. Also consider how channels work together: SEO builds long-term visibility, brand investment can increase search demand and improve campaign effectiveness, while paid media reaches targeted audiences and tests demand. Focusing solely on immediately attributable revenue can overlook their wider contribution.

3. Understanding the barriers to international growth

Capturing demand depends on local conditions and adapting to them costs money. Search behaviour, language, cultural expectations, pricing, customer preferences and practical considerations such as distribution, delivery and payment methods all affect how effectively you can compete.

A proposition that works in one country might need adapting elsewhere. Poor localisation, limited organic search visibility, expensive paid search competition or landing pages that fail to convert local audiences can all undermine performance. More media spend without addressing these barriers risks amplifying an ineffective approach.

Jumia’s experience in Africa illustrates the risks of overlooking these differences. Its early expansion relied on a Western e-commerce model that struggled to accommodate local purchasing habits, payment preferences and delivery infrastructure. The lesson is that market potential means little unless your business model and digital strategy reflect local realities.

Local behaviour and platform developments also affect digital performance. For example:

• Search: Search terms, customer questions and trusted information sources vary between markets. Understanding these differences is essential to building organic visibility and reaching customers effectively.
• Paid media: Platform usage, audience behaviour, advertising costs and competition affect acquisition efficiency. Google’s October 2026 announcement of expanded advertising in AI Mode, including planned UK expansion, illustrates how quickly paid search opportunities are evolving. Differences in CPCs and conversion rates can also make the same budget considerably more effective in one market than another.

4. Compare opportunities, not just performance

Compare international markets by performance, growth potential and the effort required to capture it. Four scenarios illustrate how this informs investment decisions:

These scenarios aren’t rigid rules. Strategically important markets may justify investment despite modest returns, particularly when building a presence ahead of future growth.

Every pound allocated to one market is unavailable to another. A market doesn’t have to be underperforming to justify a budget reduction; it may simply offer a weaker prospective return than another opportunity. Consider two markets with the same available budget:

• Market A: Additional spending could increase sales, but at progressively higher acquisition costs.
• Market B: A relatively small investment in local content, targeting or conversion optimisation could make an existing audience considerably more valuable.

Market B may offer the better opportunity, unless overcoming its barriers requires substantial investment or risk. Compare each opportunity against four questions:

• How much additional profitable demand could we realistically capture?
• What’s preventing us from capturing it?
• What investment would address those barriers?
• How does the expected return compare with the alternatives?

5. Sometimes the best investment is learning

Businesses naturally prefer investing where evidence is strongest, but this can favour familiar markets over less-tested opportunities. Some marketing investment should generate knowledge as well as immediate revenue. A small campaign in an unfamiliar market could establish:

• Whether genuine demand exists.
• Which customer segments respond most positively.
• Which propositions and channels perform best.
• What acquisition costs are achievable.
• What needs to change before larger investment makes sense.

A clear testing framework should define what you want to learn, how much you’re prepared to spend and what evidence would justify further investment. A disappointing initial result needn’t rule out a market if it reveals problems that can be addressed.

6. Treat your budget as an ongoing investment decision

A consistent process helps international marketing teams compare opportunities and explain recommendations to finance and regional leadership. For each market, consider six questions:

1. Define the commercial objective. Agree whether the priority is revenue growth, profitability, market share or customer acquisition.
   
   
2. Estimate the additional opportunity. Assess addressable demand, competition and growth potential.
   
   
3. Understand current performance. Examine how returns change as spending increases and whether additional investment generates incremental sales.
   
   
4. Assess your ability to compete. Can your local proposition, content, distribution and customer experience capture demand profitably?
   
   
5. Compare the alternatives. Rank opportunities by expected return, investment required, uncertainty and time to results.
   
   
6. Agree how success will be measured. Set metrics and review points to determine whether to increase spending, change direction or stop.

Precise marginal returns aren’t always calculable, particularly in newer markets or where conversion volumes are low. Make assumptions explicit and use the best available evidence to guide decisions.

Review the investment case regularly, agreeing in advance what would trigger increased spending, a change of direction or withdrawal. Allow time to distinguish meaningful shifts in performance from normal fluctuations.

So, where will you invest next?

The best investment isn’t necessarily your biggest market or strongest performer. It could be an established market ready to scale, an underperforming one with potential or an unfamiliar market worth testing. The key is identifying where your next pound will generate the greatest profitable growth.

Oban helps businesses understand international markets, reach local audiences and make smarter investment decisions. Reviewing your international marketing budgets? Get in touch to discuss how we can help.