For marketers today, the traditional playbook isn’t cutting it anymore. Clients expect marketers to deliver hard business outcomes – and fast.
With AI reshaping creative and media workflows, finance teams slashing “nonessential” spend and boards demanding accountability, the role of a marketer has morphed from a brand steward to a growth operator. Holding companies are revising forecasts, CFOs are auditing every channel, and CMOs are caught in the middle of all of this – under pressure to prove ROI before the quarter’s up.
As a result, there’s been a noticeable shift in how marketing investments – especially paid media budgets – are being allocated. Increasingly, marketers are leaning toward channels that are directly tied to conversion and measurable performance outcomes. And it’s not a new trend. According to the 2024 Gartner CMO Spend Survey, the largest year-over-year percentage increase in paid media budget allocations are being attributed to conversion and sales channels.
Sure, performance marketing gets results fast. But even the most dialed-in campaign hits a wall eventually. When that happens, the returns start to shrink and growth stalls. Overreliance on performance channels in pursuit of short-term gains creates fragility in the growth model, especially when brand equity is underfunded and unable to drive demand.
At that point, hard-won efficiency gains and impressive ROI figures can lose their luster if top-line growth stalls.
The true opportunity for modern marketers lies not in choosing between brand and performance but in integrating them into a unified growth strategy.
The media fragmentation challenge
The acceleration of media fragmentation during recent years has made it more difficult for marketers to find opportunities for continued growth within their core performance media platforms and channels.
With a growing number of competitors hunting for net new customers and audience growth across historically top-performing platforms slowing, the cost of competing for conversions is on the rise. CMOs solely focused on short-term wins and efficiency metrics often find themselves stuck in a cycle of diminishing returns from overindexing on performance tactics. This narrow focus on performance marketing also typically comes at the expense of investing in brand equity.
Here’s the thing many marketers overlook: When your brand is strong, your performance spend works harder. People are more likely to click, convert and stick around, because they already trust you.
Consider data from Analytic Partners, which highlights that investments in brand spend have a positive impact not only on driving incremental profit, but also on the related increase in ROI of performance marketing activity. It makes sense that customers who are familiar with and trust a brand are more likely to click on ads, convert at higher rates and remain loyal over time.
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In this way, brand equity acts as a force multiplier, amplifying the effectiveness of performance campaigns. Using brand equity to drive greater sales volume and efficiency is the key to a sustainable growth model.
The optimal mix of brand and performance
Investments in performance marketing have always appealed to CFOs and other C-suite stakeholders because they offer clear, trackable results. For CMOs, making the business case for investing in brand can be a challenge, especially for growing organizations and those with budget constraints.
It’s easy to fall into the trap of copying big-brand playbooks, especially when they’re spending hundreds of millions of dollars. But most teams don’t have that kind of scale or tooling.
While marketing mix modeling and attribution technology and tools have been around for years, most solutions have required significant paid investments and corresponding conversion volume to be effective in measuring the impact of channel investments. The good news? That’s starting to change.
As noted in a recent article from WARC, tools and technology that previously were of value to only big spending advertisers are becoming increasingly more accessible to a greater number of marketers. With the help of these tools and alignment on the metrics that matter throughout the marketing funnel, the opportunity to combine both brand and performance marketing to drive growth is within reach.
Connecting essential metrics
To make the most of a connected brand-performance model, there needs to be stakeholder alignment on the metrics that truly matter to the business.
Here’s the real challenge: Most teams are still measuring brand and performance in separate silos. They’re missing the opportunity to leverage a shared measurement framework that can better demonstrate the impact of upper-funnel activity on lower-funnel conversions.
When brand-building efforts are working, you often see the impact through increased branded search volume, better conversion rates and an overall lower cost per acquisition. That’s not a coincidence; it’s evidence that brand equity is driving performance.
Brand or performance: It’s no longer a choice
CMOs face the dual challenge of driving immediate sales while fostering long-term brand equity to fuel sustainable growth. Media fragmentation has only intensified the pressure on performance marketing, pushing up costs and limiting returns as competition for conversions grows.
However, the solution lies not in choosing between brand and performance or prioritizing performance over brand but integrating them into a unified growth strategy. The question for CMOs isn’t whether their organization can afford to invest in brand; it’s whether they can afford not to in an environment where performance alone no longer scales.
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
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