{"id":4375649,"date":"2023-03-06T18:41:22","date_gmt":"2023-03-06T16:41:22","guid":{"rendered":"https:\/\/www.deptagency.com\/insight\/is-an-overreliance-on-performance-marketing-hampering-business-growth\/"},"modified":"2025-12-08T13:38:07","modified_gmt":"2025-12-08T11:38:07","slug":"is-an-overreliance-on-performance-marketing-hampering-business-growth","status":"publish","type":"article","link":"https:\/\/www.deptagency.com\/en-in\/insight\/is-an-overreliance-on-performance-marketing-hampering-business-growth\/","title":{"rendered":"Is an overreliance on performance marketing hampering business growth?"},"content":{"rendered":"
\n\t\n\t<\/svg>\n\t\t\t\n\t\t\tBack to all articles\t\t<\/span>\n\t\n<\/button>\n\t\tIs an overreliance on performance marketing hampering business growth?\t<\/h1>\n\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t<\/picture>\n\t\n\t<\/div>
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\n\t\tSam Huston\t\t
\n\t\tCSO of Growth, Americas\n\t\t\t<\/div>\n<\/div>\n\t
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\n\t\t\t\t\t6 March 2023\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t<\/div>\n<\/div>\n\n
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\n\t\tPerformance marketing can be a real growth booster in the early stages of business development. However, when brands need to scale, over-investment in this area alone often leads to diminishing returns.

Many brands face a stark reality.\u00a0

Customer acquisition cost (CAC) is growing. Return on ad spend (ROAS) is falling. And everything is becoming inefficient.\u00a0

The direct link between advertising and growth that existed before has weakened.\u00a0

The reason is likely to be an over-focus on media-specific KPIs, which are then used as the main driver of marketing strategy. But once the advertising costs peak, brands admit that they’ve made a mistake. Nevertheless, they are not always ready to move to a balanced “full-funnel” approach. Sometimes it requires a complete overhaul of the entire marketing strategy and the involvement of new teams.

To be able to spot this trend, marketing teams need to be in tune with the overall health of a business. Empowered with both top-level business insights and detailed media metrics, marketing teams can successfully adjust their strategy.\u00a0

One example is online fashion giant ASOS. In FY22, ASOS acknowledged its customer acquisition rate slowed and its CAC increased. This was due to the allocation of more than 80%<\/a> of marketing investments to paid marketing alone.\u00a0

“The allocation of marketing spend had not been effectively prioritized or managed to ensure a return on investment. This left insufficient funds for long-term brand awareness” – says Jos\u00e9 Antonio Ramos Calamonte, CEO of ASOS.

Airbnb also admitted to over-reliance on performance. The company spent a lot of money to increase traffic to the site, although more than 90%<\/a> of its traffic is organic. The planning for brand-building actions that would ensure marketing balance was inadequate.\t<\/p><\/div><\/div>\n\t\t\t<\/div>\n\t\t\t<\/div>\n\n\t\n\t