From clicks to contribution: measuring Demand-Led Growth the right way
In our last piece, we called out fixed budgets as one of the biggest brakes on performance in an AI-first campaign environment.
We showed how Demand-Led Growth, letting budgets flex in real time with market demand, removes that brake and gives Google’s AI the headroom to capture more profitable sales.
But without the right measurement framework, Demand-Led Growth won’t last, because if you can’t prove the incremental, profitable value of flexibility, someone in finance, trading, or leadership will eventually, and quite correctly, stop this approach.
Measurement is the bridge between Demand-Led Growth as a test and the long-term licence to operate with it as part of BAU.
Measurement needs to change
Too many retailers are still measuring performance through a narrow efficiency lens of ROAS, CPA, and worse, vanity metrics like impressions, CPCs, and clicks. They’re easy to track and easy to put in a report, but they don’t tell you if the business is better off.
In fact, surges in impressions or clicks are often treated as negative simply because they don’t deliver an instant ROAS spike. That misses the point. Those surges are usually signals that Google’s PMax is working with richer data, building reach, and laying the groundwork for future growth.
In a demand-led setup, the questions change:
- Did the extra budget deliver incremental conversions and/or revenue?
- Did that growth have a positive impact on margin?
- Did it expand market share or protect from competitors?
If it's not clear what the answer to these questions is, then you'll struggle to get the support and sign-off.
If your KPIs aren’t tied to contribution and incrementality, they’re vanity metrics. Track them as indicators, but not as proof of success or unnecessary concern.
Demand-Led Growth needs a measurement approach that connects media activity to a retailer’s commercial value:
- Margin per SKU / or by category
- Gross profit after ad spend
- Contribution margin
- CPA against lifetime value
The right mix depends on product type, seasonality, business models and trading priorities, but it must tie media to actual business performance.
Measuring with the Market
A demand-led measurement approach has to respect two things: how PMax’s AI learns and how demand behaves. PMax doesn’t reset every 30.5 days. It compounds learning and carries data forward. Demand moves in waves around paydays, promotions and seasonality. It's never uniform, never linear and it never will be.
The right measurement keeps those rhythms aligned with business needs:
- Daily: make sure nothing blocks PMax. Budgets, feeds, tracking, assets. If they fail, PMax can’t respond to demand.
- Weekly: check demand signals against spend. Are fast-moving SKUs and categories supported? Is ROI holding as budgets ebb and flow? Check attribution levels and their cycle in-platform. PMax is optimising to that view, so if your internal model doesn’t line up (unless you’re on SA360), you’ll be looking at the wrong numbers.
- Monthly: test for incrementality. Geo splits, holdouts, causal impact. Did that extra budget unlock incremental demand?
- Quarterly: tie it all back to your business. Contribution margin. LTV/CPA. Media Mix Modelling, as this is where finance decides if this flexible approach pays off.
The takeaway
Demand-Led Growth isn’t about clearing “Limited by Budget” flags. It’s about creating the best possible, constraint-free environment for PMax to respond to fluctuations in demand, while holding that increased spend accountable.
That means:
- Measuring what matters
- Proving the value of this new flexibility
- Embedding that proof into how finance, trading, and marketing make decisions
Next week, we will be sharing our demand-led measurement framework, which will give you the signals, metrics, and review cadence to run this process, from daily checks to quarterly strategy reviews.
But, to take the next step to scaling your performance, you need AI. Talk to our team to find out how our AI & ML platform uses the principles of demand-led growth with these metrics to scale PMax performance.
