Let’s hop into our virtual time machine and make our way back to the early 2000s. That was when the digital marketing industrial complex started, coupled with an endless lineup of dazzling industry conferences and techie sales reps promising precise targeting, pay-for-performance, and zero ad wastage. People then started anointing themselves with jargony titles like “Performance Marketers” and “Demand Generators.”

It was a spectacular coup of self-promotion and a bonanza for the exploding digital advertising ecosystem.

Supernova-level shiny object

ROAS, attribution, and conversion metrics finally gave marketers the metrics they needed to impress the finance budget gatekeepers. Of course, few bothered to ask how the programmatic sausage was made or question the validity of the underlying data. 

Publishers, bloggers, and digital agencies all joined this unstoppable bandwagon. VCs pouring money into digital startups even started promoting this notion that branding was now irrelevant because targeting combined with cheap Facebook ads would create an endless stream of customers. Similarly, tech bros, with their we-know-better swagger, promoted “growth hacking.” This was the peak “emperor with no clothes” period where no one could question the legitimacy of these thought-leaders and headline makers despite having little coherent long-term marketing strategy or thoughtful brand building in place.

Digitals dark underbelly

A few industry stalwarts like P&G’s Chief Brand Officer, Mark Pritchard, tried calling out the opaque nature of digital media. It’s an open secret that problems like ad fraud, fake accounts, dubious metrics, junk inventories, imprecise targeting, and misleading attribution remains an industry-wide issue. For instance, researchers have revealed that as recently as 2023, nearly half of all internet traffic (49.6%) was generated by bots, and ad fraud is estimated to cost US advertisers $23 billion in wasted spend.

Nearly two decades have passed, and digital marketing’s promise of precise targeting remains as imprecise as ever. Tracking users across the internet is more likely to creep people out than to convert a lead. The quality of ads has also never been worse. Collecting data has turned marketing away from a customer-centric function to an analytical one, resulting in endless PowerPoint slides reporting metrics and marginal efficiency gain rather than actual effectiveness. 

We all know the famous line, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Despite digital marketing’s lofty promises, 50% of digital ad spend is still waste– we can just track that waste better.

Inescapable consequences

As we look across the landscape today, we can see the hangover of two decades of programmatic-induced comatose. Companies that heavily invested in short-term acquisition to scale are now flummoxed by declining growth and customer defections after luring them in with costly promotions. Countless DTC and B2B SaaS companies that relied on low-cost advertising now face the stark challenge of achieving profitability in an environment where acquisition costs have skyrocketed, and fickle customers move on to the next thing.

Common sense makes a comeback

These past few decades have felt like living in an alternative reality, where brand and creativity were unjustly seen as wasteful and subsequently devalued. The significance of brand building should be self-evident, as we are all consumers who gravitate towards brands we are familiar with and trust. Fortunately, insightful individuals like Peter Field and Les Binet have used empirical evidence to demonstrate that brand building is not just a luxury, but a necessity for effective marketing and long-term sales growth.

Furthermore, findings from research firm System1, which studied the effectiveness of 18,000 ads, have debunked the notion that promotional sales ads can double as brand-building ads. Their finding reveals that the opposite is true—that brand-focused campaigns deliver a halo effect of lifting short-term sales, while sales ads have negligible impact on brand salience. This disproves the false perception that “branding” is a frivolous, non-performing indulgence. Not only that, but an overinvestment in short-term sales activities is a path toward commoditizing your brand and puts tremendous pressure on profitability.

Return to fundamentals

Digital’s loftiest promises were always pyrrhic illusions, using analytics as a sleight of hand to offer a false sense of precision and accuracy. As reality sets in on its limitations, I hope marketers and business decision-makers can wake up from this long spell and return to what has always been true—that the truest way to grow a brand is to balance immediate sales and long-term brand building.