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ROAS Is a Trap: How Smart Marketers Really Drive Growth

Marketing Against The Grain

NOTE

**The 3-Buckets Advertising Framework **

The advertising strategy can be effectively organized into three buckets: the Direct Return on Advertising Spend (ROAS) bucket, the Incrementality bucket, and the Brand Awareness bucket. The Direct ROAS bucket focuses on capturing immediate demand and maximizing returns on investment, which is the priority for companies aiming for quick financial gains. Once this bucket reaches capacity, the Incrementality bucket aims to create additional demand by leveraging indirect and direct ROAS measurements, ultimately enlarging the first bucket as it generates more demand. The Brand Awareness bucket, on the other hand, is less about measurable returns and more about establishing engagement through widespread exposure, regardless of immediate financial metrics. An example of misalignment within this framework is highlighted by Nike's recent marketing strategy shift from creating demand to serving existing demand, focusing on programmatic advertising at the expense of long-term effectiveness. This exemplifies a concerning trend of prioritizing easily measurable strategies over potentially more impactful approaches, ultimately leading to substantial financial inefficiencies.

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