Why Your Media Allocation Strategy Needs a Flip

by Ben Dutter •

Many companies are struggling with rising customer acquisition costs (CACs), stagnant performance, and an increasing reliance on discounts to drive sales.

The problem? Most brands allocate their marketing budgets in a way that prioritizes short-term wins over long-term, sustainable growth. Instead of fueling true demand generation, they pour money into low-funnel tactics that capture existing demand but fail to expand their audience.

It’s time to rethink your media allocation strategy.

The Common Brand Struggles: Are You Facing These Challenges?

If you’re like most brands I talk to, you’ve likely run into these frustrating roadblocks:

  • Stagnating growth
  • Rising customer acquisition costs (CACs)
  • Increased reliance on deeper discounts to drive sales

These problems often lead brands to seek guidance, hoping for a better way to optimize marketing budgets and maximize returns.

For larger brands, a true incrementality-first measurement approach—such as media mix modeling, incrementality experiments, and customer survey data—can provide the insights needed to make informed decisions.

But what if your brand is still growing and isn’t quite at that scale yet? If you’re generating $10M-$20M annually and relying on just a handful of marketing channels, you’re likely facing an even bigger challenge: budget allocation.

The Budgeting Trap: Why Your Media Strategy Isn’t Working

Many brands fall into the same trap when determining their media budgets:

  • Prioritizing performance marketing
  • Evaluating success purely on ROAS or CPA
  • Pushing the majority of budget to bottom-of-funnel (BOF) tactics

The typical brand budget I see looks something like this:

  • 50% on Meta conversion optimization (ASC, DPAs, etc.)
  • 30% on shopping (Google, Amazon, etc.)
  • 10% on search
  • 10% on test channels (YouTube, TikTok, CTV, Pinterest, etc.)

Here’s the issue: when you allocate the bulk of your Meta budget toward lower-funnel conversion optimization, the algorithm prioritizes serving ads to the highest-intent customers.

In other words, you’re spending the majority of your budget on demand capture, not demand creation.

The Incrementality Problem: Why Lower Funnel Tactics Don’t Scale

Extensive testing has proven that the lower the funnel, the less incremental the impact. Essentially, you’re optimizing for customers who were already planning to purchase, rather than expanding your brand’s reach and attracting new customers.

The result? Your brand becomes trapped in a cycle of diminishing returns, rising CACs, and over-reliance on deep discounts to maintain sales.

The Solution: Flip Your Funnel for Sustainable Growth

To break free from this cycle and drive sustainable growth, you need to rethink your budget allocation. Here’s what works:

  • Prioritize true new customer acquisition. Focus on top-of-funnel (TOF) brand awareness to expand your reach.
  • Reduce reliance on retargeting and retention. Most brands overspend on BOF tactics, but cutting back on retargeting can free up budget for higher-impact acquisition strategies.
  • Refocus search and shopping on top-performing products. Instead of spreading budget thin across all products, concentrate investment on proven winners.
  • Increase investment in high-incrementality channels. Channels like YouTube, TikTok, CTV, and Pinterest have consistently driven 4-6x incremental ROAS in testing. Increasing budget allocation from 10% to 20-30% can significantly boost performance.

The 80/20 Shift: A Smarter Approach to Budget Allocation

By flipping your funnel, you shift from a 20/80 TOF vs. BOF split to a more effective 80/20 distribution.

This means:

  • More budget is allocated to new customer acquisition (TOF), expanding your brand’s reach and fueling long-term growth.
  • Less budget is tied up in low-incrementality, high-intent retargeting, reducing CACs over time.
  • Your test channels become key growth drivers, as platforms like YouTube and TikTok introduce your brand to new audiences who weren’t already in your purchase pipeline.

The Bottom Line: Stop Judging Test Channels by Platform Results

If you’re a sub-$20M brand struggling to grow, the solution isn’t to double down on bottom-of-funnel tactics, it’s to reallocate your budget toward new customer acquisition and demand creation.

And one final piece of advice: stop judging test channels purely by in-platform performance metrics. The real impact of these channels is often much greater than what standard attribution models suggest.

Are you ready to flip your funnel and unlock sustainable growth? If you need help navigating this shift, let’s talk. At fusepoint, we specialize in helping brands rethink their media allocation for maximum impact. Get in touch today for a consultation.