Chris Koehler, Chief Marketing Officer, Twilio
Over the past ten years, I’ve watched a massive shift in how we allocate budgets. Marketing investment has steadily shifted toward performance marketing, driven by a global environment in which boards are (rightfully) obsessed with ROI.
In that high-pressure seat, performance marketing became the dominant strategy because it’s easy to measure.
As a CMO, I understand why – I’ve witnessed peers in the industry lured by the immediacy of digital campaigns that promise precision, where every click, conversion, and acquisition can be measured, optimised, and reported.
But there are signs the industry may have overcorrected, and in Australia in particular, the pendulum has swung too heavily toward short-term marketing wins over long-term brand investment. Evidence suggests this may be hurting businesses. As AI reshapes marketing, brand is becoming more important, not less.
Let’s talk about why.
Australia’s performance marketing imbalance
The shift toward performance marketing is not unique to Australia, but research suggests local marketers are leaning more toward short-term tactics than their global peers.
Analysis from Kantar data shows Australian companies tend to over-index on lower-funnel marketing, focusing more on conversion-driven activity at the expense of long-term brand building. And when brands focus too heavily on capturing immediate demand, through search advertising, retargeting or promotions, for example, they may win now but lose later.
Acquisition costs rise, differentiation declines, and long-term growth starts to feel elusive.
The Kantar analysis suggests that brands could increase sales by moving toward a more balanced marketing mix. I couldn’t agree more that striking the right balance is key, and this is something we’ve witnessed first-hand at Twilio.
In addition to increasing investment in our partner ecosystem to drive growth and awareness, we went all in on our recent rebrand and branding initiatives, which have paid dividends in marketing performance and ROI. Performance marketing captures demand, but brand marketing creates it.
The two must co-exist.
AI is driving the case for brand marketing
There is no denying that AI is enabling huge efficiency gains in marketing and making execution easier. AI can absolutely increase revenue and cut costs – from generating large volumes of creative assets, to analysing customer data and behaviour across every touchpoint to achieve incredible personalisation at scale.
So, what’s the drawback? Sadly, there’s more than one.
Firstly, marketing commoditisation, or in layman’s terms, brands are becoming more boring. Everything is starting to look and feel the same.
The second issue is that AI is making Australian consumers less patient in customer service interactions. So AI has created an environment with more and more similar, indeterminate marketing campaigns, and at the same time, consumer attention and patience are decreasing. The only way to win in this context is to focus on brand, as familiarity and trust will influence purchasing behaviour.
Another important consideration is the shift from SEO to AEO (Answer Engine Optimisation), or optimising content so it appears in AI-driven search results.
AI is becoming a leading means for product discovery – agents are conducting the search, with humans doing the validation and selection.
We know that different LLMs favour different sources, so what matters most now is a strong, trusted brand that sounds human. Let’s look at an example. If a consumer asks an agent to find them a new pair of shoes based on their past style preferences, it will return a bunch of brand options, some known to the consumer and some not.
What’s the one they’re most likely to go with? This is where brand becomes a critical shortcut for decision-making. Those who have invested in distinctive brand meaning and emotional connection over time will be the ones who stand out.
The boardroom challenge for CMOs
Despite the evidence, many Australian marketers still struggle to get board approval for sustained brand investment. And you can’t succeed in brand marketing without senior-level buy-in. The whole organisation needs to be committed.
Boards and CFOs tend to prioritise initiatives with definable, and hence often short-term, financial returns. Performance marketing fits neatly into this model. Brand building, by contrast, can take time to prove its worth, creating a harder sell in the boardroom.
Here are a few ways marketers can reframe the conversation to win C-Suite support:
Translate brand into commercial outcomes: Boards rarely approve budgets for “brand awareness.” They approve budgets for growth and profitability. Marketers should connect brand investment to outcomes such as lower customer acquisition costs, increased market share and stronger pricing power.
Position brand and performance as complementary: The most persuasive argument is not brand versus performance, but brand enabling performance. Brand marketing and performance marketing are often framed as competing priorities, but in reality, they are symbiotic – one feeds the other. Strong brand resonance can improve the efficiency of performance marketing by lowering customer acquisition costs and enhancing customer lifetime value.
Use credible external research: Independent data can strengthen the case in board discussions, so go in with some credible third-party market research ready. This will help move the branding conversation from speculation to a surer bet. You can even commission some of your own market research if you need to.
Frame brand building as a strategic asset: Finally, marketers should position it as a long-term investment rather than a discretionary marketing expense. Having a strong brand influences outcomes that boards care deeply about, including pricing power, customer loyalty and resilience during economic downturns.
AI has transformed how marketing is executed – and that’s largely a good thing.
But AI will not create meaningful differentiation by itself. The more automated marketing becomes, the more valuable distinctive brands will be.
The organisations that succeed in the AI era will combine AI-driven efficiency with strong brand building, creativity and storytelling.