The State of Performance Marketing:
Trends Shaping Lead Generation

Performance marketing is in a period of significant structural change. Rising CPCs, deprecating cookies, AI-driven bidding algorithms, and shifting buyer attention patterns are forcing organisations to rethink programmes built on playbooks that no longer produce the same returns.

This report sets out the key trends reshaping performance marketing across B2B and B2C sectors — what is changing, what it means for budgets and strategies, and where the organisations generating the strongest commercial returns are placing their bets.

The CPC Inflation Problem

Cost-per-click across major paid channels has risen consistently over the past three years. Google Search CPCs in competitive B2B categories have increased 35 to 60% since 2021 in key markets. LinkedIn CPCs have followed a similar trajectory.

The implications are significant. Programmes that were marginally profitable at 2021 CPA levels are now loss-making at the same conversion rates. Organisations that have not re-engineered their conversion funnels to compensate for higher acquisition costs are seeing ROAS deterioration across their paid portfolios.

The response most organisations have chosen — reducing budgets — tends to make the problem worse by removing the volume needed for bidding algorithms to optimise effectively. The more effective response is improving conversion rate and average order value to maintain acceptable CPA at higher CPCs.

First-Party Data is Now a Competitive Asset

The phased deprecation of third-party cookies has been protracted, but the direction is clear. Organisations with mature first-party data programmes — CRM data, email lists, customer match audiences, purchase histories — have a structural advantage in paid digital that will compound over time.

First-party data enables:

• Customer match targeting — reaching high-value existing customers and lookalike audiences with greater precision than interest or demographic targeting
• Retargeting without third-party cookies — using CRM data and owned channel identifiers to build retargeting audiences
• Conversion modelling improvement — enriching algorithmic conversion models with first-party signals that improve optimisation quality

Organisations that have not invested in building first-party data infrastructure are increasingly disadvantaged in paid media effectiveness relative to those that have.

AI-Driven Campaign Management: Opportunity and Risk

Google's Performance Max and Meta's Advantage+ represent a meaningful shift in how paid campaigns are structured and managed. Algorithmic campaign management at scale can improve performance — but requires careful input data and thoughtful constraint-setting to avoid waste.

The most common failure patterns with AI-driven campaigns:

• Feeding poor-quality conversion signals into algorithmic optimisation — garbage in, garbage out at scale
• Over-constraining campaigns with targeting restrictions that prevent the algorithm from finding the best audience
• Under-constraining brand safety and placement, resulting in spend on low-quality inventory
• Failing to maintain creative refresh rates — algorithmic campaigns deplete creative faster than manually managed campaigns

LinkedIn: Expensive but Irreplaceable for B2B

LinkedIn CPCs have risen significantly, and organisations continue to use it because the targeting quality for senior B2B decision-makers has no comparable alternative at scale. The organisations generating the strongest LinkedIn ROI share common characteristics:

• They target with precision — company size, seniority, and function — rather than broad audience sets
• They use Conversation Ads and Direct Sponsored Content rather than relying on standard feed placement alone
• They pair LinkedIn paid activity with organic thought leadership content from senior individuals — the combination outperforms either in isolation
• They measure LinkedIn by pipeline contribution, not by click-through rate or lead volume

Conversion Rate Optimisation as a Budget Multiplier

CRO deserves more budget than most organisations allocate to it. A 20% improvement in landing page conversion rate has the same effect on CPA as a 20% reduction in CPC — but is typically achievable at a fraction of the cost.

The highest-impact CRO interventions in current performance marketing programmes:

• Form length reduction — every additional field reduces conversion rate; removing non-essential fields produces immediate gains
• Social proof placement — testimonials, case study references, and trust signals positioned near conversion points
• Page speed — particularly on mobile; each additional second of load time reduces conversion rate measurably
• Message match — ensuring landing page copy reflects the specific ad that drove the click