Fintechs lose millions by cutting brand marketing

WARC research across thousands of brands found that shifting from performance-only advertising to a blend of brand and performance increases total revenue return on investment by about 90%. The analysis also found that reducing brand activity in favor of performance-only tactics cuts ROI by roughly 40%.

Performance marketing accounts for the majority of ad spend at many fintech companies, particularly early-stage firms where each dollar is tightly managed. Attribution models that credit conversions to recent paid activity can make individual campaigns appear highly effective even when overall growth depends on broader awareness.

WARC’s data indicates only about 20% of scale-up brands successfully expand to larger markets. The remaining companies encounter rising customer acquisition costs and falling return on ad spend even after ongoing campaign optimization.

The mechanism WARC describes is practical: when consumers do not know a brand, a single display or search ad must introduce the company, build trust, present an offer and close the sale. Where brand recognition exists, ads can focus more narrowly on conversion because awareness and trust are already present.

Fintech firms report high acquisition costs. Industry figures show the average fintech spends about $1,450 to acquire a customer, and an estimated 73% of those customers stop using the product within the first week. Without persistent brand recognition, companies repeatedly incur the full cost of acquisition.

Proprietary trading platforms and other niche fintech products illustrate the pattern. Many firms offer similar products, fee structures and interfaces, leaving name recognition, community and reputation as primary differences. Firms that invested in brand development early tend to retain users and sustain pricing; firms that relied on heavy discounts have largely left the market.

Discount-driven acquisition shifts demand toward highly price-sensitive users and can lower perceived category value by normalizing steep fee reductions. Observers identify a cycle where frequent deep discounts compress margins across the sector.

Marketing teams are using different measurement approaches in response. Tracking branded search volume alongside paid metrics can show how brand lift reduces cost per acquisition. Running market-level incrementality tests — comparing regions with brand investment against regions without — helps isolate brand contribution to conversion.

Some finance teams are receptive to framing brand work in monetary terms. The research includes examples where a modest increase in brand equity, achieved with a budget under 1% of revenue, corresponds with measurable revenue gains. That framing positions brand spend as an investment with quantifiable returns rather than an abstract awareness metric.

Boards and marketing leaders are weighing choices between continued focus on short-term performance metrics and allocating a portion of budgets to brand-building that can change paid-channel efficiency. The debate centers on measurement approaches, organizational priorities and the experience of marketing leaders with integrated strategies.