Introduction to Demand-Led Growth
Demand-led growth is a strategy for retailers that allows your media investment to scale in real time with actual consumer demand. In Google’s AI-first media environment, especially within Performance Max (PMax), Demand Gen, and AI Max campaigns, this means uncapping your budgets and enabling this powerful AI to allocate spend based on live demand signals.
Demand-led is about removing artificially imposed limits in order to maximise reach and ensure your products are visible when consumers are actively searching. In the era of AI, a new way of working has been established. This approach represents a foundational shift in how growth is achieved for forward-thinking retailers.
Why retailers need a new approach
Recent research we developed with Retail Economics, reveals that Search remains undervalued by many retailers, especially when it comes to investment and the impact it delivers. Demand-led growth begins when paid media is viewed as a revenue-driving engine, rather than just part of the traditional marketing mix.
Most media budgets are set on monthly or quarterly cycles. Some retailers attempt even greater control, budgeting weekly, or in extreme cases, daily. This stands in stark contrast to the needs of an AI-led media environment, where tightening controls only adds friction to a system designed for flexibility.
These approaches come from historic ways of working, offering control and predictability rather than performance, and this pre-defined view assumes predictable demand, but we all know real consumer demand fluctuates daily, driven by everything from weather shifts to competitor promotions to social trends. Traditional budgeting can’t keep up.
Our perspective on Google’s Demand-Led principle
Google’s PMax model is designed to scale in real time with consumer demand. But “uncapping budgets” is only valuable if that flexibility is anchored to commercial outcomes and governed in a way your board will support.
By giving PMax full visibility of market demand (Total Addressable Market) through a demand-led approach, retailers enable richer data, deeper learning, and better alignment with upper-funnel media that drives brand consideration. The result is stronger performance across Google’s AI-powered ecosystem.
We’ve developed a commercially governed, cross-functional framework based on Google’s principles:
This approach ensures PMax operates with full market visibility while keeping surges intentional, profitable, and operationally sustainable. It reframes the decision from “Can we afford to spend more today?” to “Can we afford to miss this demand?”.
Traditional vs Demand-led budgeting
| Traditional budgeting | Demand-led budgeting | |
| Budget cycle | Weekly, monthly or quarterly | Real-time |
| Flexibility | Limited, flexible caps | Fully adaptive |
| Response time | Delayed, retrospective | Immediate, proactive |
| Optimisation | Reactive, limited scope | Continuous, extensive |
| Metrics | ROAS, budget deployed, spend limits | Incrementality, profitability, causal impact |
The hidden costs of budget limits
When budgets are fixed, growth is capped. Each day your PMax campaign hits a budget ceiling is a day of lost learning and lost opportunity.
Imposed capping means that Google’s AI can't see your Total Addressable Market (TAM) - the full scope of customers your products could reach if PMax is unconstrained - weakening its ability to optimise now and in future campaigns.
Why ‘day trading’ is a problem
Manual interventions: constant ROAS tweaks can disrupt the AI’s learning cycles, reducing campaign effectiveness, particularly when they conflict with how Google’s systems are designed to optimise performance. They move the goal posts, introduce volatility, reduce signal quality, and ultimately make your campaigns less effective. Demand-led budgeting provides stability for the AI to optimise.
Measurement: the cornerstone of Demand-Led Growth
Being demand-led is not just about removing ‘Limited by Budget’ flags. That’s a visible symptom of a deeper issue and one that often stems from outdated or incomplete measurement practices. If your organisation can’t prove the incremental, profitable value of flexible budgeting, you’ll never get sustained buy-in from finance, trading, or leadership.
To make demand-led growth stick, measurement needs to evolve from simple efficiency reporting to a decision-making framework. ROAS alone doesn’t tell the full story, and in many cases, it actively discourages growth investment. Instead, focus on:
‘Limited by Budget’ should not be treated as a minor optimisation alert, it’s a strategic red flag. It means your campaigns are being throttled, your PMax set up is starved of the data it needs to improve, and your business is leaving growth and revenue on the table.
When measurement proves that the additional spend delivers incremental profit, demand-led investment stops being a leap of faith. You’re able to position it to become the way a retailer needs to operate.
In our next blog, we’ll explore the metrics that truly matter, and share a measurement framework that proves whether your demand-led growth strategy is working.
Your Demand-led growth checklist
Want to go deeper? Our downloadable checklist gives you a playbook for implementing demand-led growth in your paid media strategy. Here’s what’s inside: