The Bottom-Funnel Trap
When performance marketing and cost-per-order (CPO) optimizations start showing results, it creates a seductive logic: scale the part that works. Budgets shift. Brand teams shrink. Activation takes the lead. Before long, 60 to 80% of the marketing budget is funneled into lower-funnel tactics optimized for the lowest CPO.
It feels smart. Measurable. Efficient.
But here's the catch: only 5% of your market is ready to buy right now.
That's not just me saying it. This insight comes from the LinkedIn B2B Institute's 95:5 Rule, which highlights that 95% of potential buyers are not in-market at any given time. When we invest the majority of our resources into short-term campaigns, we're targeting a tiny slice of consumers and ignoring the remaining 95% who aren't buying yet but will be.
Short-Term Wins, Long-Term Cost
This imbalance leads to predictable outcomes:
Customer lifetime value drops.
Price sensitivity increases.
Acquisition costs climb.
At first, this feels like a sales problem. But it's not. The business has over-invested in order efficiency at the expense of desirability, making the efficient increasingly ineffective.
As Les Binet and Peter Field explain in The Long and the Short of It, campaigns focused solely on short-term sales activation underperform over time, because they don’t create lasting brand preference or mental availability. Without consistent brand investment, there’s nothing replenishing your pool of future buyers and nothing that differentiates you from your competition. You become a commodity.
This is echoed in WARC’s Anatomy of Effectiveness framework, which calls for a balance of long-term and short-term efforts to maximize campaign success. Their findings show that a strategic mix across brand-building and performance marketing is crucial for sustainable growth, especially as lower-funnel-only approaches quickly reach diminishing returns.
Eventually, we find ourselves spending 70% of our budget trying to convince 5% of the market that our price is slightly better than the next guy’s. And when the only differentiator is a discount, brand value becomes inexistent and irrelevant.
Internal Structures Make It Worse
The organizational dynamics that accompany this logic are fascinating to observe. I’ve experienced it firsthand. As growth kicks in and promotional activity shows efficient results, leadership decides to increase the share of budget going into short-term tactics and prioritizes digital acquisition — a logical move given immediate revenue goals.
But over time, the setup becomes lopsided. The brand’s voice weakens. Emotional connection drops. Brand equity erodes. Acquisition becomes less efficient despite increased spend and continuous testing. The system hits a wall, and quarterly promotions generate orders but only mask the deeper problem: actual customer lifetime value is falling.
Reversing course often proves nearly impossible. Not because the data doesn't support it, but because internal dynamics don’t allow for change. As McKinsey notes in The CMO’s Role in Integrating Brand with Performance, most organizations separate brand and performance into different teams, with different KPIs, processes, and politics - making strategic realignment difficult.
Real Fixes Require Real Change
So what's the solution?
It's not about choosing brand or performance. It's about creating a unified structure that allows both to work in tandem and shift flexibly based on market context.
A project I led in 2024 illustrates how a balanced plan with the full funnel in mind can lead to significant results. The Young & Youth project, a cross-functional initiative with a 60/40 brand-to-performance budget split, improved brand KPIs and long-term value and drove a 26% increase in orders at the same time.
Why? Because messaging and campaign planning were orchestrated over a year with a clear funnel progression in mind: build awareness and mental availability, engage customers emotionally, and only then move into sales activation - while keeping brand assets live at all times.
It wasn’t magic. It was structure.
Efficiency Should Be a Byproduct, Not the Goal
Chasing efficiency in isolation is like running faster on a treadmill. You burn energy but don’t move forward.
Yes, measure. Yes, optimize. But make sure you're building something worth choosing, even when there’s no discount code attached.
Because when you stop investing in brand, you become a commodity.
And eventually, even the most efficient funnel hits a wall.
Want to talk about building a smarter digital setup?
Let’s connect on LinkedIn or reach out to me via marchalm.framer.website.
