We’re living in the performance era of advertising, where real-time metrics are at our fingertips, pushing us to constantly ask, “how can we drive more impact from our marketing efforts?” With all this data, it’s easy to get caught in the ‘advertising doom loop.’
The “advertising doom loop,” a concept explored in The Multiplier Effect by WARC, describes what happens when brands over-optimize for short-term performance metrics like cost-per-click or cost-per-lead at the expense of long-term brand health. It’s a cycle that can quietly erode growth, leading to diminishing returns and missed opportunities for impact.
Our experience in recognizing this and shifting to fuel for business growth
Recently, we worked with a medical device client whose advertising goal was to generate a set number of leads each month with a fixed budget. This was a sales-driven approach to ensure each rep had enough leads to work with throughout the month.
As the monthly lead goal grew and the budget remained static, our media plan focused on a channel mix that delivered the lowest cost-per-lead possible. While we explored scalable lead generation opportunities at low cost-pers, we hypothesized that the focus on volume may be compromising lead quality.
To reframe the conversations and monthly goals with the client, we created reporting views that tracked generated leads through the sales funnel. As suspected, the activations driving the lowest cost-per-lead were also driving some of the highest costs-per-sale. By optimizing towards a shorter-sighted advertising goal (lower cost-per-lead and significant lead volume), the campaign saw an unintended negative impact on total sales—the true KPI for advertising efforts.
We collaborated with our client to reset leadership team expectations on cost-per-lead, pivoting our new strategy to optimize towards efficient sales within 60-days. This led us to prioritize different media activations than prior, balancing short-term efficiency with longer-term brand building tactics that enhanced lead quality. This shift in strategy led to a dramatic decline in cost per sale of 37%, allowing the media to work harder in driving sales impact.
How can you recognize when you might be in the ‘advertising doom loop’ and get out of it?
- Look at your media mix. Are you spending more than a quarter of your budget on lower-funnel activations, such as tactics like Search? If so, you should diversify your mix to leverage activations that can support building your brand. Performance and brand building channels can more efficiently drive business growth than either type of activation working on their own.
- Keep a pulse on how your business is trending. Are you making campaign optimizations and seeing a downward trend you cannot explain? If so, you could be optimizing too heavily for metrics that are not correlated to key performance indicators, such as total website traffic is going up, but sales are going down. Being critical about what metrics you deem as KPIs to optimize toward and ensuring those are related to your ultimate brand goals is so important.
- Compare your measurement approach to your key business questions. Are you being asked questions from your leadership team that you cannot answer, such as what is driving the greatest ROI and how much more can we scale? That is an indicator that you might have a measurement gap to fill, that may require a new type of measurement. The importance of investing in the right types of measurement to give a holistic understanding into how your campaign is performing and giving you visibility into the right types of insights to fuel optimizations cannot be understated.
In today’s fast-paced digital environment, balancing short-term performance with long-term brand-building is essential for sustained growth. By continually assessing and optimizing your strategy, you can avoid the ‘advertising doom loop’ and set your marketing efforts up for success. At Butler/Till, we know that it is not just about the numbers—it is about making those numbers work harder for real business impact.
Contributors: Danielle Fox
