Advertising
Retargeting
Showing ads to people who have already interacted with the business, identified from a pixel, a customer list or an app event.
What makes it wrong.
The mechanism, not the warning.
Retargeting budgets tend to grow because the reported return is high, and the reported return is high partly because the conversions would have happened anyway. Incrementality is the only way to see the difference.
In detail.
Retargeting is cheap on every attributed metric, because it addresses an audience already close to converting. That is also its weakness as an investment: proximity to the purchase is not the same as causing it.
It is bounded by the size of the pool feeding it, which makes audience saturation the constraint that eventually decides its ceiling.