Performance Marketing Costs On The Rise

In recent years, performance marketing costs have surged, with customer acquisition costs (CAC) doubling in five years—from $44 in December 2019 to $91 in December 2024.  This trend is prompting brands to reassess their marketing strategies, particularly in balancing performance marketing with brand-building initiatives.

Pet Circle’s CMO, Jon Wild, anticipates a shift towards lower-funnel performance tactics due to cost and profit pressures. He suggests that, despite the increasing costs, brands may gravitate back to last-click attribution models for their simplicity, even though all attribution models have inherent flaws.

Conversely, Bupa’s Head of Performance, Clea Baker, emphasizes the importance of brand investment. She notes that while performance channels like search have a significant impact, optimizing brand investment can lead to better business returns. Baker also predicts rising costs in performance media, underscoring the need for a balanced marketing approach.

The escalating costs in performance marketing highlight the necessity for brands to evaluate their marketing mix carefully. A strategic balance between immediate performance metrics and long-term brand building is essential to navigate the evolving digital landscape effectively.

The rising costs of performance marketing mean it’s time to rethink your strategy—balancing brand and performance is the key to long-term success. Need help making it work? Let’s talk.