Santosh Pandey, CEO,  Ridiculous Digital,  breaks down the “marketing doom loop” – where over-optimisation and shrinking audiences lead to rising costs, declining impact, and serious frustration, especially in New Zealand’s tight market. Read the full article to find out how to break the loop and rethink your media mix.

We’ve felt it. You’ve felt it. Something's broken in marketing. Terribly so.

Here’s an example. You've done everything right. Your campaigns are perfectly targeted. Your attribution is airtight. You've optimised every metric down to the decimal point (custom dimensions and metrics too, if you are that way inclined!). Yet. Somehow. Your results keep getting worse or has plateaued at best.

The. Campaign. Just. Will. Not. Grow.

Sound familiar? You're trapped in what's being called the marketing "doom loop" – and you're not alone. From Auckland’s boardrooms to Christchurch agencies, I'm hearing the same story: better tools, smarter targeting, worse results.

Here's the thing: the belief we’ve held on to for the longest time, that was sold to us by all the Martech, that more optimisation equals better outcomes. It doesn't. Not anymore anyway.

The Trap We've All Fallen Into

Picture this. Your Facebook reach drops (again), so you narrow your targeting to squeeze more from less. It works briefly, then performance tanks. You optimise harder. Ad costs rise. Results fall. Rinse and repeat until your budget's shot and your client and/or boss is asking uncomfortable questions.

That's the doom loop in action. And in New Zealand's fishbowl market of 5.25 million people (and some of those 5m are kids that we shouldn’t market to! Just saying!), it happens faster than anywhere else.

The platforms have engineered this perfectly. Reduce your organic reach, force you into more of paid advertising, then charge you more to reach fewer people. Meta now penalises posts with external links. LinkedIn does the same. They want your content, your audience, and your budget – but they don't want to send traffic to your website. At Ridiculous, we’ve been telling this to our clients for well over a year now because we saw the doom loop in action.

Meanwhile, customer acquisition costs have exploded. What used to cost $9 now costs $29. That's not inflation – that's a broken system.

Why Are Us Hardworking Kiwi Marketers Feeling This Pain First

We're the canary in the digital coal mine. The Aotearoa market is so small that when you laser-target your "perfect audience," you're often just showing the same ad to the same 1,000 people until they despise your brand.

Think about it. Auckland has 1.7 million people. Target "women 25-34 interested in sustainable fashion" and you might have 5,000 people. Run that campaign for a month and they'll see your ad 47 times. That's not marketing – that's harassment.

And while you say you can control the ‘frequency’, can you really trust that setting? The platform will spend your budget. It absolutely will! Whatever it takes (and it takes a whole heap of impressions!)

Shannon Addison from TVNZ BlackSand said it best at a recent event: we're using tools built for markets 50 times our size. No wonder they don't work here.

The Truth That Hurts. And Bad.

Here's what we reckon (bring out the brickbats and pitchforks now): broad targeting often outperforms narrow. When audiences overlap by more than 90% (which happens constantly in NZ), you're paying premium prices for no added value.

Research from the WARC Multiplier Effect study – based on 40,000+ ads – proves something many marketers could sense innately. Companies mixing brand building with performance marketing see 90% higher revenue. Those focused only on performance? They're struggling.

Why, you ask? Because performance marketing is like fishing with dynamite (and this is a long-time performance marketer saying this). Sure, you'll catch some fish today, but you're destroying the ecosystem. Brand building creates the conditions where fish want to swim to you.

What Actually Works (And We've Tested This)

  • Stop Chasing Perfect Metrics Your CFO might love that spreadsheet showing 0.01% incremental improvements, but those metrics are fiction. Instagram only passes accurate attribution data 30% of the time. You're optimising based on lies (sorry Mark!).
  • The 60/40 Rule Still Works Binet & Field's golden ratio – 60% brand, 40% performance – isn't just theory. It's proven across thousands of campaigns (some of them, ours). If more than 25% to 30% of your budget goes to search, you're already trapped.
  • Embrace Messy Effectiveness Perfect data is seductive but useless. The entire universe (especially our clients!) knows we love good, high-quality data. But there is another universe out there. TV advertising – yes, TV – still delivers great ROI. Why? Because it reaches actual humans, not algorithmic phantoms. (PS: Have you thought about Smart TV campaigns yet? I digress, that is for another chat another time)

The Icky Questions That Need to be Asked

Look at your marketing mix right now. If you can't answer yes to these questions, you're in trouble:

  • Does at least 30% of your budget go to brand building?
  • Can you explain your strategy without mentioning CTR or ROAS?
  • Would your campaigns work if digital targeting disappeared tomorrow?

And lastly, but MOST importantly –

  • Are you building memory structures or just harvesting today's demand?

Right. So Now What?

The doom loop isn't inevitable, but breaking free requires courage. Ties in nicely with the MA’s focus for the year – for marketers to be brave!

You'll need to accept messier metrics. Your spreadsheets (yeah, same is true for your fancy dashboard!) won't look as pretty. Your CXO will ask questions.

But here's what I've seen happen to brands that are able to be brave: costs drop, reach expands, and growth returns. Not overnight – this isn't a hack. It's a fundamental shift in thinking.

Companies that achieve what BCG calls "multimoment maturity" see cost savings around 30% and revenue increases of 20%. But it starts with one simple recognition: optimisation has become the problem, not the solution.

Your Move Is Next

Marketing's doom loop represents a fundamental challenge to everything we've been taught about digital marketing. And also what we’ve picked up over the years. The world has changed now, though. The playbook that got us here won't get us there.

Every day you delay, the trap gets tighter. Platforms reduce reach further. Costs climb higher. Audiences shrink smaller. And we haven’t even talked about GDPR and the likes yet!

But some organisations and businesses are already breaking free. They're the ones thinking bigger, targeting broader, and building for tomorrow rather than optimising for today.

The question isn't whether you'll escape the doom loop. It's when.

Ready to break free? Start by auditing your media mix. If brand investment is below 30%, you already know what needs to change.

PS: The expert panel I’m a part of at #DDO2025 takes on this and many other tectonic shifts currently taking place in the digital realm! Looking forward to seeing you in Auckland next month!

References:

WARC (2024). The Multiplier Effect: A CMO's Guide. World Advertising Research Center; Binet, L. & Field, P. (2013). The Long and the Short of It. IPA; BCG Global (2024). Marketing Effectiveness in the Age of Performance. Boston Consulting Group; Marketing Week (2024). The State of B2B Marketing Effectiveness; IAB New Zealand (2024). Digital Advertising Spend Report 2024.

Source: Santosh Pandey, 12 June 2025