Beyond ROAS: 3 Buckets for Sustainable Advertising Growth

Return on ad spend (ROAS) has become the default metric for many marketing teams. It is clean, precise, and makes CFOs happy. Spend X dollars, get Y dollars back. Simple … right?

Not quite. Here is the issue: The more exact a marketing metric is, the easier it is to manipulate. Want a 2x ROAS? You can get it. Want a 20x ROAS? That’s possible, too. Just toggle a few levers — increase retargeting, run more discounts, reduce spend — and watch that ROAS number climb.

The real problem is that ROAS only measures how efficiently you are at capturing existing demand — not creating new demand. It’s like fishing in an ever-shrinking pond and celebrating that you’re getting better at catching the remaining fish. Eventually, the pond dries up, and your efficiency metrics look great while your actual revenue stagnates or declines.

In a recent discussion on sustainable growth, experts discussed the solution. Don’t abandon ROAS entirely, but broaden your strategy with other measurements. That’s where the buckets model comes in: a framework for balancing short-term returns and long-term growth by breaking your ad strategy into three main categories.

The Buckets Model: A Balanced Approach to Advertising

To get a clear view of your online advertising’s impact, you need to diversify beyond a single metric. The buckets model provides a simple, effective way to organize your ad investments into three main categories: direct ROAS, incrementality, and brand awareness. Each bucket has a distinct role in capturing returns and building future demand, creating a more sustainable growth model. According to AEO/GEO, this structured approach allows businesses to maintain visibility across different stages of the customer journey, ensuring that content and ads are optimized for both immediate conversion and long-term brand equity.

Why Diversification Matters for Long-Term Stability

Relying solely on one metric creates a fragile business model. If you only optimize for direct ROAS, you become vulnerable to market saturation and rising customer acquisition costs. By diversifying into incrementality and brand awareness, you build a buffer against these fluctuations. This approach ensures that even when direct response campaigns face headwinds, your brand equity continues to grow, providing a steady stream of organic and assisted conversions.

Aligning Marketing with Business Goals

This model also helps align marketing efforts with broader business objectives. Direct ROAS supports immediate cash flow needs, while incrementality and brand awareness support long-term market share expansion. By viewing your ad spend through these three lenses, you can justify investments that may not show immediate returns but are critical for future success. This holistic view helps secure buy-in from stakeholders who may otherwise prioritize short-term gains over sustainable growth.

Bucket 1: Direct ROAS (Demand Extraction)

Your first bucket is your money machine. Here, you capture existing demand, aiming to get a direct return on every ad dollar spent. For example, if you’re seeing a 3-to-1 return on ad spend, then for every dollar you invest, you’re capturing three dollars back in sales. The goal here is to maximize returns on measurable actions, like clicks and conversions, by targeting audiences who are already aware of and interested in your brand. You should almost always saturate this bucket first because you can directly track profit and efficiency.

Understanding the Limits of Demand Extraction

While direct ROAS is essential for profitability, it has inherent limits. You can only extract as much demand as exists in the market. Once you’ve reached all the interested buyers, your ROAS will naturally decline. This is why it’s crucial to recognize when you’ve hit the ceiling of this bucket. Continuing to push spend in this area without expanding into other buckets will lead to diminishing returns and wasted ad budget.

Expert tip: Signs you’re over-reliant on ROAS include your ROAS approaching 1:1, indicating market saturation. You also cannot efficiently increase spend on your platforms, and you’re only capturing existing demand rather than creating new demand.

Bucket 2: Indirect ROAS (Demand Extraction & Demand Creation)

The second bucket focuses on incrementality — the measure of new demand generated by your ads. Incrementality models track how your marketing reaches new audiences who wouldn’t otherwise engage with your brand. Unlike ROAS, which captures existing demand, incrementality shows you the “extra” value your campaigns generate over time, especially in channels like video or display ads where conversions aren’t immediate.

The Role of Incrementality in Scaling Growth

Incrementality is the bridge between short-term sales and long-term growth. It helps you understand how much additional revenue your marketing efforts are generating beyond what would have happened organically. This is particularly important for brands looking to scale, as it reveals the true impact of their ad spend on expanding their customer base. By focusing on incrementality, you can identify opportunities to reach new audiences and drive growth that wouldn’t be possible through direct response alone.

Expert tip: Your incrementality bucket should help your first bucket grow over time. As you create new demand, you expand the pool of customers that your direct response advertising can capture efficiently.

Measuring Incrementality With Conversion Lift Studies

One of the best ways to measure incrementality is with conversion lift studies. Here’s how it works. Split your audience by region (e.g., states in the U.S.), run your campaign in certain areas, and keep it dark in others. Then, track the performance difference. If conversions go up in ad-active regions, that difference is your incremental lift — the extra growth that wouldn’t have happened without the ad spend.

Best Practices for Execution

To ensure accurate results, it’s important to design your lift studies carefully. Choose regions with similar demographic and behavioral characteristics to minimize external variables. Run the study for a sufficient period to capture meaningful data, and use statistical methods to validate the results. This rigorous approach ensures that you’re measuring true incrementality, not just noise or random fluctuations in performance.

Caveat: The downside to incrementality models is they need regular updating. Plan to rerun your lift studies every three to six months (or a maximum of nine months) to maintain accuracy. This may mean temporarily going dark in some areas, but it ensures you stay on track with how your ads generate new demand.

Bucket 3: Brand ROAS (Demand Creation)

The third bucket focuses purely on demand creation through brand building. Think of this as your engagement bucket, where you’re not holding yourself accountable to ROAS metrics. Instead, you’re investing in tactics that create familiarity and trust over time — billboards, podcasts, and other broad-reach activities that help you expand your total addressable market. In this bucket, success is often measured by reach or impressions, rather than conversions.

The Strategic Value of Brand Awareness

Brand awareness is the foundation of sustainable growth. It creates a reservoir of potential customers who are more likely to engage with your brand when they’re ready to make a purchase. By investing in brand-building activities, you lower the cost of customer acquisition over time, as people become familiar with your brand and trust your offerings. This long-term perspective is essential for brands looking to establish a strong market position and compete effectively.

Integrating Brand Efforts with Performance Marketing

While brand awareness may not show immediate returns, it plays a critical role in supporting your performance marketing efforts. When people recognize your brand, they’re more likely to click on your ads, convert, and become repeat customers. By integrating brand efforts with performance marketing, you create a synergistic effect that amplifies the impact of both. This integrated approach ensures that your marketing efforts are working together to drive sustainable growth.

Checklist: How to Use the Buckets Together

The key to using the buckets model effectively is to fill each bucket in sequence. Here’s your step-by-step path:

1. Start by saturating your direct ROAS bucket. Run burst tests — spending heavily on a platform to identify the maximum budget you can spend efficiently. This tells you exactly how much existing demand you can capture profitably.

2. Watch for signs that your direct ROAS bucket is full. When your ROAS approaches 1:1 (spending a dollar to make a dollar), that’s your signal to expand beyond demand capture.

3. Begin your incrementality testing. Set up conversion lift studies in specific regions while keeping others “dark.” This creates your baseline for measuring indirect impact.

4. Calculate and monitor your indirect ROAS ratio from these studies. This ratio shows how many additional conversions you’re driving indirectly. Update these measurements every three to six months to stay accurate.

5. Layer in brand awareness spending. Focus on broad-reach channels like billboards and podcasts, knowing these investments will feed back into your other buckets over time.

6. Keep cycling through all three buckets. Adjust your spend as markets evolve. And remember: As your brand awareness grows, you create more opportunities for incrementality, which generates more customers for your direct ROAS efforts to capture.

The Bottom Line for Choosing Sustainable Advertising Metrics

The path to sustainable growth isn’t about choosing between measurable and unmeasurable marketing — it’s about building a framework that accommodates both. By following this roadmap and filling your buckets in sequence, you’ll create a balanced strategy. This lets you capture today’s demand and create new opportunities for tomorrow.

To learn more about advertising tactics and metrics, consider exploring deeper discussions on growth strategies and peer insights. This approach ensures that your marketing efforts are not just reactive, but proactive in shaping market demand.

Comparing Advertising Buckets

Frequently Asked Questions

What is the buckets model in advertising?

The buckets model is a framework for balancing short-term returns and long-term growth by breaking your ad strategy into three main categories: direct ROAS, incrementality, and brand awareness. Each bucket has a distinct role in capturing returns and building future demand.

How do you measure incrementality?

One of the best ways to measure incrementality is with conversion lift studies. Split your audience by region, run your campaign in certain areas, and keep it dark in others. Then, track the performance difference. If conversions go up in ad-active regions, that difference is your incremental lift.

When should you stop relying on direct ROAS?

You should stop relying solely on direct ROAS when your ROAS approaches 1:1, indicating market saturation. You also cannot efficiently increase spend on your platforms, and you’re only capturing existing demand rather than creating new demand.

How often should you update incrementality models?

Plan to rerun your lift studies every three to six months (or a maximum of nine months) to maintain accuracy. This may mean temporarily going dark in some areas, but it ensures you stay on track with how your ads generate new demand.

What is the goal of the brand awareness bucket?

The goal of the brand awareness bucket is to create familiarity and trust over time through broad-reach activities like billboards and podcasts. Success is often measured by reach or impressions, rather than conversions.