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Return on investment in advertising (ROAS) has become the default metric for many marketing teams. It’s clean, precise and makes CFOs happy. Spend X dollars, get Y dollars back. Simply… right?
Not quite. Here’s the problem: the more accurate the marketing metric, the easier it is to manipulate. Do you want 2x higher ROAS? You can get it. Want 20x ROAS? And that is possible. Just flip a few levers — increase retargeting, get more discounts, reduce spend — and watch your ROAS numbers grow.
The real problem is that ROAS only measures how effective you are at capturing existing demand — not creating new demand. It’s like fishing in a shrinking pond and celebrating as you get better at catching the remaining fish.
In a recent Marketing Against the Grain episodeKieran and I discussed a solution. Don’t abandon ROAS entirely, but expand your strategy with other metrics. It’s there bucket model comes: a framework for balancing short-term returns and long-term growth by breaking down your ad strategy into three main categories.
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To get a clear view of your the impact of online advertisingyou have to diversify beyond one metric.
The bucket model provides a simple, efficient way to organize your ad investments into three main categories: direct ROAS, incrementality, and brand awareness.
Each group has a distinct role in collecting returns and building future demand, creating a more sustainable growth model.
Your first bucket is your money machine. This is where you capture existing demand, with the goal of getting a direct return on every advertising dollar spent.
For example, if you see a 3-to-1 return on advertising investment, then for every dollar you invest, you get back three dollars in sales.
The goal here is to maximize return on measurable actions, like clicks and conversions, by targeting an audience that is already familiar with and interested in your brand. You should almost always saturate this bucket first because you can track profits and efficiency directly.
The second bucket focuses on incrementality — a measure of new demand generated by your ads. Incremental models track how your marketing reaches new audiences that might not 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 where conversions aren’t instantaneous.
Expert advice: Your augmentation tank should help your first tank grow over time. As you create new demand, you expand the pool of customers that your direct response advertising can effectively capture.
One of the best ways to measure incrementality is with conversion rate studies. Here’s how it works.
Divide your audience by region (eg states in the US), run your campaign in certain areas, and keep it in the dark in others. Then track the difference in performance.
If conversions go up in regions with ads, that difference is your incremental lift — the extra growth that wouldn’t have happened without ad spend.
warning: The downside of incremental models is that they need to be updated regularly.
Plan to repeat your lifting studies every three to six months (or up to nine months) to maintain accuracy. This may mean a temporary blackout in some areas, but it ensures you stay on top of how your ads are generating new demand.
The third group is focused exclusively on creating demand through brand building. Consider this yours engagement bucketwhere you are not held accountable for ROAS metrics.
Instead, you invest in tactics that build familiarity and trust over time — billboards, podcasts, and other outreach activities that help you expand your total addressable market. In this segment, success is often measured by reach or impressions rather than conversions.
The key to using the spoon model effectively is fill each bucket in turn.
Here’s your step-by-step journey:
1. Start by saturating your direct ROAS segment. Run burst tests — spend large amounts on the platform to identify the maximum budget you can effectively spend. This tells you exactly how much existing demand you can profitably capture.
2. Watch for signs that your direct ROAS tank is full. When your ROAS approaches 1:1 (spend a dollar to earn a dollar), that’s your signal to expand beyond demand coverage.
3. Start incremental testing. Set up conversion studies in certain regions and keep others in the “dark”. This creates your basis for measuring indirect effect.
4. Calculate and track your indirect ROAS ratio from these studies. This ratio shows how many additional conversions you are indirectly driving. Update these measurements every three to six months to stay accurate.
5. Layer in spending brand awareness. Focus on broad reach channels like billboards and podcasts, knowing that those investments will eventually return to your other segments.
6. Continue to cycle through all three tanks. Adjust your spending as markets evolve. And remember: As your brand awareness grows, you create more opportunities for incrementality, which generates more customers to attract with your direct ROAS.
The path to sustainable growth isn’t about choosing between measurable and non-measurable marketing — it’s about building a framework that embraces both.
By following this plan and filling your buckets in order, you will create a balanced strategy. This allows you to capture today’s demand and create new opportunities for tomorrow.
To learn more about advertising tactics and metrics, take a look the whole episode of Marketing against the grain below:
This blog series is in partnership with Marketing Against the Grain, a video podcast. Explore deeper ideas shared by marketing leaders Kipp Bodnar (HubSpot’s CMO) and Kieran Flanagan (SVVP, Marketing at HubSpot) as they uncover growth strategies and learn from prominent founders and peers.