5 Performance Marketing Truths that Don't Sound Like Blasphemies Anymore
A look back in time
The first post I ever published on my blog had the controversial title “5 DTC Performance Marketing Truths that Sound Like Blasphemies”. And the 5 points I was making in that post were indeed things that were discussed inside high-performing teams, but almost never in public marketing discourse - as if we were uneasy about them.
Revisiting these 5 truths today doesn’t feel as blasphemous. On the contrary, it feels like everything has been said repeatedly - to the point where citing my own post makes me feel like Captain Obvious.
Let’s review them one by one:
Truth 1 – Slashing CAC isn’t everything
We are growth marketers - we are given a set budget, and we want to maximise the customers we can acquire with said budget. Of course we want low CAC.
The graphs shared back in the day were all about CAC and CPA. My first major case studies were all about decreasing CAC.
The truth is: it’s a KPI of paramount importance, but it can’t be the north star.
Quoting the original article:
Focusing only on CAC can present you with pitfalls in the areas of LTV and volume of growth. For example:
- You might find that not all customer types have good retention. Optimising for the right customer rather than any customer may increase your CAC, but your LTV will be higher. It’s likely that this will result in a shorter payback period.
- Increasing your media spend is likely to increase your CAC and decrease your ROAS. But it will also unlock more revenue growth. It’s up to you and your business goals to decide what you want to maximise (most often revenue or net profit after factoring in COGS) – and therefore to find the optimal levels of CAC and ROAS.
What I’d add today:
The name of the game isn’t reducing CAC, it’s having the unit economics that allow you to operate with a high CAC so that you can scale. The higher your breakeven CAC is, the more budget you can allocate, the greater the reach and you can maximise your contribution margin in absolute dollars.
A lot of my consulting these days is getting founders or heads of growth to adopt contribution margin over CAC as their north star. Maximising that number doesn’t mean minimising CAC; it usually means unlocking higher scale as long as contribution margin increases - even if CAC rises up to a point.
I’ve seen a lot of posts along those lines in my Twitter and Linkedin feeds the past year. It’s not a new idea, but I reckon it’s marketers being more finance-led and CFO-friendly than they were 4 years ago. After all, performance marketing is a finance-led exercise.
Truth 2 – The least important factor in your performance channels is the channel’s account and campaign structure
“Well, duh. Everybody knows this, Michael.”
I can see you rolling eyes. Well, welcome to the performance marketing community, a place where debates like CBO vs ABO and Target CPA vs Target ROAS can command 80% of the attention at any given moment. To top that off, imagine you are in 2021.
Yes, today everyone knows that it’s the offer and the creative that can make or break an ad account, not the structure. But this wasn’t the case at the time of the post.
Nowadays creative dominates the discussion when it comes to Meta Ads. Rewind 4-5 years ago, and the discussion was mostly about account structure.
Quoting the original post:
If I were to rank the factors that affect the performance of an ad campaign, I’d go with the following:
1) Strength of the Offer
2) Compelling Creative / Ad Copy
3) Effectiveness of the Landing Page / Conversion Funnel
4) Ad Account Setup / Bidding Strategy
It wasn’t that offer and creative weren’t important back then - they’ve been the backbone of advertising since the beginning. But relegating the Ad Account Setup below everything else? Sounded blasphemous, especially pre-iOS14. It felt like us performance marketers were diminishing our own role.
Technical media buying with endless clicking in-platform and sophisticated audience testing is now a thing of the past, and the role of Creative Strategist has exploded. And trust me, if you hired for a Creative Strategist in 2021, no one would think you are hiring for performance marketing.
The biggest spenders on Meta today build in-house production teams and large-scale creator programs to support paid activity. Creative Volume and Diversity are dominating the conversation, and rightfully so.
Truth 3 - Looking at your source/medium report in GA won’t give you accurate channel performance
Google did the heavy lifting for me here, killing Google Analytics in favour of GA4 and inciting a massive drop in GA usage.
If you were around the last decade, you’d have experienced the industry referring to GA source/medium rows as “channels”. Such was the dominance of this report in assessing performance, that we were confusing the last touchpoint with a channel. You’d have heavyweight Heads of Growth talk about the “direct channel”.
iOS14 shone a light on what was always the case: last-click can’t account for the full buyer’s journey, and that there are channels that are more easily tracked towards the end of the journey vs others. The fact that a channel is more easily found on last click doesn’t mean that it’s the channel you need to scale.
Sophisticated Multi-Touch Attribution models were already trying to solve that problem, but their solution had the limitation it said on the tin. It was click-only attribution. And these models ended up overvaluing the same click-happy channels, namely search and… direct (unattributed).
Thankfully no one does that anymore, but it wasn’t the case. I remember getting laughed at on Linkedin when I suggested that self-reported attribution should complement multi-touch attribution from an analytics guru.
Fast-forward to 2025, this report is no longer the holy grail, and it’s becoming an accepted reality that there’s no single source of truth for attribution. And yes, you can and should survey your users.
Truth 4 – But neither will relying on channel-level data
For marketers understanding the limitations of last-click, in-platform numbers looked like the best alternative.
And in most cases, it was indeed a better alternative to last-click numbers. That’s why in-platform numbers are still around and still impacting massive performance marketing decisions like budget allocation, creative testing next steps, etc.
But they never were, and still aren’t, a source of truth, and treating the in-platform numbers as a true reflection of performance is quite problematic:
For brands with organic demand, paid social can easily claim conversions that would have happened anyway as their own (especially when view-through is included)
For brands starting out / on a growth stage, I usually see the opposite problem. Platforms not being able to capture the full effect of the ads, due to tracking limitations, cross-device, latent effect of increased awareness, referring a friend, etc.
Google Ads campaigns that include Branded Search (Brand Search, PMax without brand exclusions, etc) obfuscate the results. Google does that on purpose and in some cases it might even be beneficial for the optimisation (another data point to train the algorithm) - but it’s not to be treated as truth.
The industry has recognised this problem. The fact that incrementality is now a buzzword is itself the evidence - I love that it is, because I remember when it wasn’t.
There’s a whole marketing incrementality industry that has emerged, with providers like Paramark, Haus, Recast, etc. putting out amazing content and providing real value to brands needing to diversify their channel mix.
You have Meta and Google putting out Robyn and Meridian open source for Marketing Mix Modelling. In-platform numbers are now recognised for what they are, proxy metrics, not actual ones. One of the most important heuristics for a performance marketer today is understanding the relationship between in-platform numbers and real numbers - and no, that’s not just a static multiplier.
A couple quotes on incrementality that have stuck with me:
Gaurav Agarwal, COO at ClickUp: ”The biggest counterintuitive tactic I’ve used at ClickUp to drive rapid revenue growth while keeping CAC tight: Stop overthinking attribution and start focusing on incrementality. Netflix did this years ago.”
Olivia Kory, Chief Strategy Officer at Haus: “Every time you shift marketing budget from a less incremental channel to a more incremental one, you are growing the business. You might not be hitting your ideal in-platform CPA when you do that. But the fact that spend has moved from a less incremental investment to a better one, that’s growth. It will show in your blended metrics.”
Truth 5 – You need to lean on blended numbers to evaluate performance instead of trying to measure everything
And Olivia’s quote is the best segue for this Truth. Incrementality over granular attribution means that the focus naturally has come back to the relationship between marketing investment and cold, hard revenue / blended acquisition numbers.
Obviously that was always the case for CFOs and board-level executives. The fact that it’s becoming baseline for hands-on performance marketers too is a great evolution for the industry.
When I first wrote Truth 5, it felt like the most controversial one of all. Like I was turning my back on “digital” marketing and all the ways the digital world enables us to do marketing better than our predecessors. Today I feel the opposite, uneasy that I’m stating the obvious:
The only source of truth for your marketing investment is the movement of the blended numbers. Your CFO agrees. And I think that nowadays the CMO agrees too 😉