By Charles Lee Mathews. During hard economic times, the lure of performance marketing and short-term sales might prove appealing, particularly to your chief financial officer. But exclude long-term brand building from your marketing and you will lose.
Total reliance on performance marketing can undermine brand value, as evidenced by Nike’s shift from brand-building to sales activation, resulting in a £21 billion loss in market value. This approach fosters superficial consumer relationships driven by discounts rather than brand loyalty. And the risk is jeopardising long-term sustainability and customer connection.
However, new research from Ebiquity and the World Federation of Advertisers reveals a major shift toward performance marketing. The survey of 134 global brand leaders shows that in 2025, more brands are turning to performance marketing to ease economic pressures, as it delivers measurable, short-term results.
This research reflects the views of top marketers, who manage $66 billion in annual ad spend, and include seven of the world’s ten largest advertisers. Experts link the performance marketing trend to retail network marketing but warn against its overuse.
The instant gratification trap
“We’ve created a world that values instant gratification. This has become a benchmark in our society. It is the lens through which we assess people and business, but more so how we value marketing efforts. This, together with an economy that hasn’t recovered, has expedited the drive to performance marketing,” says Danie Brink, founder and CEO of Hoola Marketing.
“Advertising agencies focus on the promotion side of marketing but are seldom bold or equipped enough to venture into having a conversation around pricing or distribution strategies. Advertising is so much about positioning a product or service in the market rather than investigating the product or service itself, and we need to unpack the discussions around this. It is also valuable to remember that performance marketing is new, so there is still a lot we need to learn,” he says.
“The problem with instant gratification and only driving revenues is that if we all engage in this mindset and performance is all we focus on then we’re all just competing on price. Let’s face it: it’s just a race to the bottom which is not sustainable,” Brink says.
Chasing sales
“Performance marketing isn’t marketing — it’s sales in digital form. While people position it as marketing innovation, it’s the oldest practice: convert customers who want to buy now,” says Neil Pursey, founder and CEO of Measurebyte.
“Performance marketing has gained popularity due to digital platforms providing instant measurement (rightly or wrongly). The rise of data collection and real-time tracking lets marketers show quick results to justify spend, which appeals to business pressures for immediate returns. These quick results in a spreadsheet get the attention of the CFO,” says Pursey.
“Marketing teams fall into the short-term trap because brand teams report brand metrics and performance teams report performance metrics. Nobody connects these numbers to prove marketing’s full business impact. This creates three problems: CFOs see immediate returns from performance marketing while brand effects take time to measure. Teams chase quick wins to hit quarterly targets at the expense of brand investment. The damage remains hidden until sales decline, but by then it’s too late,” he says.
Hello price wars
“When you focus only on converting through performance marketing, price becomes your main tool to drive action. Customers learn to expect discounts. This creates a cycle where you need deeper discounts to maintain sales, reducing margins and brand value,” says Pursey.
Insights from global marketing research firm, Kantar, confirm this by showing “inalienable evidence that unbalanced brands won’t win in the long term. Multiple Kantar studies reveal that if marketing mix allocation consistently favours performance marketing, baseline volume sales will steadily weaken.” The big question is why so many brands continue relying on performance marketing at the cost of long-term sustainability.
“CMO tenure has fallen in recent years, so people have been under pressure to deliver a rapid return on investment. Building brands takes years if not decades. When you’re looking long term it can be difficult to quantify the return on investment,” Charlie Stewart, CEO of Rogerwilco says. “Performance marketing can deliver quick returns, so people invest significantly in it,” he explains.
CFOs & insecure CMOs
Stewart says that performance marketing enables CMOs to show “measurable impact that allows them to go and have a conversation with the finance director that demonstrates that they are worth the seat at the boardroom table. And that their budget should be increased.”
“The flip side of that,” says Stewart, “is that if you focus on short-term activation, short-term revenue, and short-term sales; you dilute your brand equity. You’re at risk of becoming a transactional brand. And you’re going to become a brand that people will buy spontaneously rather than a brand that people will have a true affinity for,” he adds.
“Transactional relationships mean that the connection between brands and consumers is superficial,” says Tracy Jones, founder and managing director of Dialogue. She adds, “People can switch their loyalty on and off if the marketing builds no deep brand affinity. The only way to build that brand affinity is to balance performance marketing and brand-building. Without this, you risk building a sales funnel that only generates transactional relationships.”
Building relationship depth
“Building a brand is almost like creating the heartbeat of the relationship between the brand and its audience. It is about bringing the brand to life and determining how to forge affinity, understanding and brand love. We do this so that the relationship shifts from purely transactional and evolves into a sustainable, long-term relationship driven by deep mutual understanding and loyalty,” she says.
Brink says the real job of marketing is to “get a brand’s message delivered to the receiver in the shortest amount of time with the least amount of noise. It is not this simple because we live in a fragmented, complex and disrupted world.” He adds that this is without throwing digital or AI into the mix.
“Marketers need to understand the brand deeply — the purpose, essence and what intrinsically drives the brand. Then find a unique, authentic way to build dialogue and grow relationships with the brand’s customers. And, like any relationship, you don’t just meet someone and start dating. You’ve got to understand their needs and what makes them tick. It is about doing this consistently. You can’t have a one-hit wonder by trying to do something viral once a year and going quiet. Though budgets are tight and everyone’s under pressure,” says Brink.
Nike’s cautionary tale
Pursey tells the tale of Nike’s short-termism. “Under CEO John Donahoe’s leadership, Nike shifted marketing investments from brand building to sales activation. They increased performance marketing while reducing brand enhancement efforts. While this showed initial returns, it led to declining results over time,” he explains.
“The company moved away from its signature mass-market emotional campaigns toward targeted product messages and price-based communications. This shift, combined with an over-emphasis on direct-to-consumer channels, resulted in Nike losing £21bn in market value. The situation demonstrates how focusing too much on short-term performance metrics without maintaining brand investment can damage even the strongest brands,” he says.
“Long-term brand value comes from consistency across all customer touchpoints,” says Pursey, underscoring the word consistency. “You need distinctive brand assets, broad market reach, and messages that connect emotionally with customers. This creates memory structures that influence future purchase decisions. Building long-term brand value requires connecting different data streams into a unified view of marketing effectiveness. Most companies have the data — they just can’t turn it into insights that drive decisions.”
Creating emotional connections
“There is a lot of research that clearly shows that effective brand-building campaigns, when run in conjunction with a performance marketing campaign, see an uplift in the performance marketing results because people have more awareness and affinity with the brand,” says Stewart.
“Brands do both effectively and in roughly the right ratio depending on the sector and the level of competition in the vertical — the ratio is anywhere between 80% brand building to 20% performance marketing or 60% brand building to 40% performance marketing — these are the ones that outshine every category, and they outshine consistently,” Stewart explains.
In the tension between short-term sales and long-term brand building, the lure of performance marketing can be beguiling. But it comes at a heavy cost as proven by Nike’s share price stumble.
