Performance Marketing - A cautionary tale
Today, I am skeptical of Meta and Facebook, importantly, I do not believe that it’s possible to profitably scale a business using performance marketing. This is a view borne of experience. I didn’t always think this way.
I was a fresh-faced finance operator at a sustainable fashion company. When I joined the team, the business was split about 60-40 returning customers to new customers. Returning customers were generally the ones buying into new clothing drops. New customers generally bought the staples: the signature cigar pant and the uniquely collared top. We refreshed performance ad assets on a quarterly (ish) cadence but new customers were not our primary growth lever.
Then we got a new marketing agency. They came highly recommended and cost a fortune. It was a grind getting them set up. But what they did was quite impressive. To put it bluntly, they used Facebook to AB test everything. Thousands of micro experiments on every inch of our content to determine what people wanted and then bang! When pieces of content took off, we could chase the experimental spend with real money. Assets that had stopped generating a positive return were being refreshed at 10x to 15x ROIs. From every success, we gathered takeaways that could inform our future photoshoots and designs. The whole thing was slick, I couldn’t believe my eyes.
At the time, I saw only one conclusion, at this ROI we were fully profitable and needed to double down on this success with significant investment. Slowly, the sheen began to wear off. First, I noticed that our baseline returns rate (returned items over the number of items sold) went up, almost 10%. The ROI’s on individual ads also began to fade quicker than I expected. Sure we could generate real purchases at first with a new asset, but the effectiveness would halve in weeks. We transitioned from quarterly content refreshes to monthly content refreshes. Eventually we noticed the uptick in our customer churn. New customers were coming in the door but we weren’t seeing them make their second and third purchases in three months like our existing cohorts had done.
All of a sudden we were upside down. We were spending more money on content and more money on marketing to try to maintain the higher revenue that we’d achieved, but we weren’t seeing the reliable growth in the retention customers that we needed to make the numbers sustainable. Our LTV entered freefall. We tried all sorts of things to fix the problems: we brought on a returns agency to help us bring return rates down (somewhat successful), we began advertising more to our returning customers (disastrous), we began spreading marketing spend on other channels like the New York Times (print!). Ultimately, nothing really worked. Once you get on the performance marketing train, it requires a lot to sustain and it is very hard to get off.
I don’t have a neat solution to problems that performance marketing causes except to avoid it, if possible. If someone is suggesting that you use performance marketing as a primary growth lever, it is worth interrogating how they view your current go-to-market strategy and your overall ability to connect with your customer. It is possible to use Meta to sell to a customer, but if you want to create a relationship with them, you’ll need another strategy.
The key to making things happen isn’t waiting for the perfect moment; it’s starting with what you have, where you are. Big goals can feel overwhelming when viewed all at once, but momentum builds through small, consistent action. Whether you’re working toward a personal milestone or a professional dream, progress comes from showing up — not perfectly, but persistently. Action creates clarity, and over time, those steps forward add up to something real.
You don’t need to be fearless to reach your goals, you just need to be willing. Willing to try, willing to learn, and willing to believe that you’re capable of more than you know. The road may not always be smooth, but growth rarely is. What matters most is that you keep going, keep learning, and keep believing in the version of yourself you’re becoming.
