There’s nothing wrong with performance marketing that performs.
If paid search is acquiring customers profitably, keep doing it. If Facebook and Instagram are generating incremental sales at economics that make sense, keep doing that too.
The problem starts when a business needs another stage of growth and assumes the answer must simply be more of whatever has worked before.
Sometimes it is. Sometimes it isn’t.
How much demand is still available to capture?
Search and other performance channels can be exceptionally good at capturing existing demand.
Someone needs a product. They search for it. You appear at the right moment with a relevant proposition.
That’s enormously valuable. But existing demand isn’t infinite.
As investment increases, a business may eventually start paying progressively more to acquire the next customer. It may expand into weaker keywords, broader audiences or people less likely to buy.
At that point, optimising harder doesn’t necessarily solve the underlying problem.
Where does the next profitable customer come from?
Capturing demand and creating demand are different jobs
Sometimes the answer is still performance activity. There may be significant untapped demand available and plenty of room to scale profitably.
But another business may need to reach people before they are actively looking for its product.
That can mean video. Streaming television. Advertising across websites. Audio. Outdoor. Broader social activity. Better creative. Or some combination of them.
Not because those channels are inherently better. Because the business is asking marketing to perform a different job.
And this can produce an uncomfortable result.
A business may broaden its marketing and initially see its reported ROAS fall or acquisition costs rise.
Yet if it starts acquiring genuinely new customers, increases the number of people considering the brand and produces incremental business growth, the apparently less efficient marketing may actually be doing more valuable work.
Sometimes the marketing metrics can get worse while the marketing gets better.
There is no predetermined split
We don’t believe every business should allocate a prescribed percentage to “brand” and another percentage to “performance”. Nor do we believe every growing business eventually needs television.
Budget should follow the problem, not a predetermined channel allocation.
First understand how much demand can still be captured profitably. Then, if the business needs more demand than currently exists, work out the most appropriate way to create it.