Back in June I wrote about Brandformance—the not-so-ugly lovechild of brand and performance marketing. That piece argued for integration: emotional resonance plus measurable impact. But integration is only half the battle. The other half is recognizing that one of the most celebrated metrics in performance land—ROAS—might be the least interesting number you track.

I’ve sat in too many meetings where ROAS was toasted like gospel, champagne corks flying because a campaign “paid for itself” in six weeks while brand awareness, trust and repeat purchase scores quietly slid into oblivion. Despite the ubiquity of promotion and discounting that props up most performance marketing, I’ve never wavered on one principle: discounts erode brands. It’s a race to the bottom. Depending on your brand, sector and market, that race may be a marathon or a sprint.  But you are definitely headed to the same finish line.

In the old bricks-and-mortar world, “location, location, location” could save you. You could sell the same thing as the shop five blocks away, but if you were closer to a bus stop or sitting on the corner where the crowd passed, you won—sometimes even charging a bit more. In the online world there is no corner. If you’re a retailer without a unique proposition, you’re competing with everyone in your market. Price comparisons are instantaneous. You end up spending more to chase fewer sales. And soon, when AI shopping agents go mainstream, performance ads will matter even less. Those agents will leapfrog your offers and simply hunt down the cheapest, fastest, most trustworthy option. And trust in that scenario comes from brand equity. Legacy brands will have the edge—and they’re already exploiting it.

Why ROAS Is Seductive—and Misleading

On the surface, ROAS looks like the neatest metric ever invented. Spend a dollar, make five back—what could be clearer? It explains why marketers over-index on it and why finance teams love it. But ROAS measures only efficiency at a point in time; it ignores momentum.

Samsung Electronics, a company we worked with for over 20 years, proves the danger of myopia. In Interbrand’s 2024 Best Global Brands ranking Samsung’s brand value hit US $100.8 billion, up 10% year on year. That growth didn’t come from performance coupons—it came from positioning itself as a leader in AI and connected experiences which build trust and long-term preference. A short-term ROAS chart could never explain that kind of billion-dollar lift.

The Trace “72% Growth Advantage” study backs this up: brands that balance long-term building with short-term performance saw about 72% growth in brand value over five years while brands chasing only efficiency eked out 20%. It’s the difference between compounding returns and eking out margin.

The Real Risks of Chasing ROAS Alone

Marketers addicted to ROAS often find themselves discounting into oblivion. Coca-Cola is a case study in avoiding that trap. In Interbrand’s 2024 report Coca-Cola still sat in the Top 10 with a brand value of US $61.2 billion. Its secret isn’t efficiency metrics—it’s cultural saturation and trust which allow it to maintain pricing power while competitors rely on coupons.

There’s also the false comfort of attribution. Just because a conversion shows up after an ad impression doesn’t mean the ad caused it. Interbrand estimates that Best Global Brands have collectively left US $3.5 trillion in potential value unrealized by leaning too hard on short-term tactics. In just the past year alone that figure was US $200 billion. That’s what misplaced attribution bias costs.

And then there’s diminishing returns. Retarget audiences until their eyes glaze over and you’ll get declining ROAS and rising irritation. Ferrari illustrates the opposite path. In 2024 its brand value grew 21%—the steepest gain among global brands. That wasn’t the result of squeezing more retargeting out of lookalike audiences; it was Ferrari expanding its brand arena into fashion, lifestyle and experiences, deepening emotional equity so customers lean in willingly.

What Matters More Than ROAS

If ROAS is the sugar rush, brand equity is the long-term nutrition. Consider e.l.f. Beauty. From 2020 to 2024 its unaided awareness in the U.S. climbed from 13% to 3%, a twenty-point leap that translated into market share gains and revenue growth. They didn’t get there by hacking last-click ROAS—they invested roughly 22–24% of sales back into marketing and storytelling that people remembered.

Toyota is another example. In 2024 its brand value reached US $72.8 billion, up 13% year on year. Not bad for a 90-year-old automaker. Toyota’s consistency in quality and innovation means customers trust it which keeps margins healthy even when the competition discounts heavily. That resilience isn’t captured in a ROAS dashboard—it lives in brand perception.

And trust itself is quantifiable. Edelman’s Trust Barometer shows 81% of consumers say they must trust a brand to buy from it. That’s not a metric you’ll see in a performance report but it’s one of the most predictive numbers in marketing.

Winning the Budget Battle in the C-Suite

Of course, the pushback is always: “We need sales now.” But the right counter is: “We’ll need them later too—and at a lower cost per acquisition.” The Trace report is a powerful slide in that debate. A balanced 60/40 split between brand and performance doesn’t just protect long-term equity—it delivers higher total growth.

Legacy brands can point to compounding effects. Microsoft and Google each posted double-digit brand value growth in Interbrand’s 2024 table (+11% and +12% respectively) despite already being giants. That’s what happens when brand strength amplifies performance instead of leaving it to do all the work alone.

Challenger brands can point to cases like e.l.f., where spending aggressively on brand drove measurable equity gains and repeat purchase. The lesson is the same: ROAS can’t be your north star. At best it’s a mile marker.

So, What Should You Do?

Audit what you’re measuring. If your reports begin and end with ROAS you’re starving yourself of context. Add unaided awareness, repeat purchase, retention and trust.

Rebalance budgets. Not everyone will shift to 60/40 overnight but even moving 10 points away from performance-only will give you more compounding returns.

And tell better stories. Ferrari isn’t just selling cars; Samsung isn’t just selling screens. They’re embedding themselves in culture, technology and aspiration. That’s why they can grow brand value at double-digit rates while competitors chase click-through rates.

The Final Word

ROAS is too neat to ignore but too narrow to revere. AI shopping agents will soon strip the emotion out of buying decisions and prioritize trust, convenience and price the only brands that thrive will be the ones people already believe in.

The brands that survive aren’t the ones with the cheapest clicks—they’re the ones people would miss if the clicks disappeared.

Sources: Trace Brand Building, Interbrand Best Global Brands 2024б, Samsung Electronics press release, e.l.f. Beauty (WARC), Edelman Trust Barometer, Ferrari Interbrand 2024 report, Toyota Interbrand 2024 report

I wasn’t planning to spend too much. I just needed a roundtrip airline ticket from Boston to San Juan. It’s just a four-hour daytime flight. No need to fly fancy. The options popped up on my screen: Main Basic at $323, Main Classic at $393, Comfort Classic at $493 and First Classic for $873.
That $323 Basic fare? A punishment masquerading as a bargain (by today’s inflated standards). No seat choice. No changes. No upgrades. And baggage…are you joking? Main Classic at $393 suddenly felt like a life preserver. For $70 more, you get sanity: a seat, a bag, a modicum of dignity.
But here’s where it got clever. Once I’d mentally committed to $393, the $493 Comfort Classic fare—just a hundred bucks more—started whispering promises: extra legroom, early boarding, an air of superiority. And just like that, Delta nudged me up the ladder without ever pushing. Well, maybe a little shove. I mean, I no longer book airline tickets without expecting to get screwed. But at least I got to choose how I was going to get screwed. And where I would be sitting while I was getting screwed.

That’s the decoy effect.

And it’s not just for airline tickets. It’s one of the most quietly powerful levers in marketing psychology—and it’s everywhere.

There is a classic principle in behavioral economics known as the asymmetric dominance effect. But in the marketing world, it’s better known by its sharper alias: the decoy effect.

The term was popularized in the 1980s by a group of behavioral researchers who showed that when a third, inferior option is added to a choice set, it can predictably shift consumer preference toward the option it’s meant to make look better. It’s not about offering more choice—it’s about shaping the choice architecture itself.

This third option—the decoy—isn’t supposed to win. It’s designed to make one or both of the other two options (usually the more profitable one) feel smarter, safer or more valuable by comparison. It might be more expensive but stripped of features, or cheaper but inconvenient. Either way, it’s the psychological scaffolding propping up your real target.

It’s also not always about upselling. It’s about anchoring expectations, reframing what counts as “value,” and nudging consumers toward the option you actually want them to pick.

The Loser Option

In the UK, Pret A Manger offers a £25/month coffee subscription to its caffeine-addicted loyalists—up to 5 drinks a day, no questions asked. But in certain trial markets, they quietly rolled out a £20 version that gives you only 3 drinks. The result? Nobody bites. The £20 plan isn’t there to compete—it’s there to lose. That’s the point. It’s a soft decoy that makes the £25 option feel like a steal without ever changing the offer itself.

A recent global survey by Growth Method in 2025 found that over 70% of consumers rely on relative comparison when evaluating product value, rather than assessing absolute price.

Making the Middle Feel Like Luxury

Uniqlo isn’t known for upselling, but even minimalists play the decoy game. Take their denim wall: you’ll find the €24.90 basic slim fit jeans—no stretch, basic washes, limited sizing—neatly stacked beside the €49.90 “Ultra Stretch” or “Selvedge” lines. The entry pair isn’t there to sell—it’s there to anchor. Once you feel the cardboard-stiff basics, the mid-tier jeans feel like Japanese-engineered comfort for just a little more.

You Don’t Need a Perfect Ladder

Nespresso mainly sells pods in sleeves of 10, 30 and 50 worldwide, and introduces seasonal or limited-edition bundles to create perception contrast and anchor higher-value choices among its core range. This approach leverages consumer reference points—highlighting premium capsules next to standard variants—which encourages buyers to select what feels like the smartest, most balanced deal.Marketing case studies show that the decoy effect works especially well in physical products and FMCG, with clear pricing contrasts guiding customers toward value-aligned mid-tier purchases—a strategy consistently used by brands like Nespresso and major retailers in 2025

Retail Theater: Stage Your Decoys

Sometimes the decoy is the most expensive.  At Dyson’s flagship in Tokyo, three vacuum models are theatrically lit like they’re about to give a TED Talk. The most expensive one—rarely purchased—sits dead center under a spotlight, while the more popular mid-tier models lurk on either side of it. The decoy is doing its job without ever leaving the shelf. It doesn’t need to move units—it needs to move minds.

Retailers globally use the decoy effect with physical staging—strategically placed decoy products in flagship stores guide consumer choices toward the desired models, as seen in electronics and FMCG sectors.

Subscription Psychology: The Middle-Tier Mirage

The New York Times sells three types of access: Digital for $4 a week, Cooking + Games for $5, and All Access for $6. The middle tier doesn’t get much love, but it’s not supposed to. It’s the decoy that makes All Access look like a no-brainer. Just a dollar more? Of course I’ll take everything.

In a famous test with The Economist’s subscription plans, nearly 84% of consumers selected the top tier when a closely priced decoy was added, compared to just 32% without it.

Prestige Pricing as Halo Generator

Lavazza’s “Tierra!” organic line isn’t just about ethical sourcing—it’s a high-margin beacon. At €7 per pack, it’s more than most Italians spend on coffee. But they don’t have to. The presence of Tierra! elevates everything else. Standard blends start to feel affordable, premium, even righteous by association.

A recent diamond retailer case study showed sales conversions for high-value products increased up to 3.2x due to well-placed decoy alternatives, with overall gross profit rising 14.3%.

Local Price Psychology: It’s All in the Name

Apple doesn’t just sell iPhones. It sells the iPhone 15, 15 Plus, 15 Pro and 15 Pro Max. Now it’s adding iPhone “Air” to the mix. They’ve tried bigger, smaller and now thinner—for the wild card slot (Hey, it worked for their laptops!). “Plus” sounds generous, “Pro” sounds elite, “Pro Max” sounds like your phone has a corporate card. “Air” whispers minimalist cool even before you see the spec sheet. The features shift slightly—sometimes barely—but the names do the heavy lifting. 

Most buyers confirm Apple’s strategy and state that model names shaped their perception of value more than tech specs. When every pixel counts and price gaps widen fast, naming isn’t just branding—it’s behavioral design.

Misdirection: The “Look Over There” Strategy 

Back in university, I had a side gig selling family photo packages in department stores. Our job wasn’t just to pitch portraits. It was to close on the spot. We didn’t ask, “Do you want it?” We skipped straight to, “Will that be cash, check or charge?”

That wasn’t just a hard sell. It was a perceptual redirect. By asking how they wanted to pay, we shifted the customer’s mental frame away from whether they wanted to buy and toward how they’d complete the purchase. It worked far more often than it should have.

This is the same behavioral sleight-of-hand behind many modern decoy strategies. The power isn’t just in the price—it’s in the framing. The decoy reframes your decision from “Is this worth it?” to “Which one should I get?” Once you’re asking that question, you’re already in the checkout aisle.

Neuroscientists call this attentional narrowing—when a brain under cognitive load focuses more on comparing available options than stepping back to question the premise. In pricing, that’s gold.

Of course, when done with transparency, this isn’t manipulation. It’s designing decisions to feel intuitive. But the line between the two is thin—and how you cross it determines whether your customer feels smart or suckered.

Retail Theater: Stage Your Decoys
Sometimes the decoy is the most expensive. At Dyson’s flagship in Tokyo, three vacuum models are theatrically lit like they’re about to give a TED Talk. The most expensive one—rarely purchased—sits dead center under a spotlight, while the more popular mid-tier models lurk on either side of it. The decoy is doing its job without ever leaving the shelf. It doesn’t need to move units—it needs to move minds.
Retailers globally use the decoy effect with physical staging—strategically placed decoy products in flagship stores guide consumer choices toward the desired models, as seen in electronics and FMCG sectors.

Subscription Psychology: The Middle-Tier Mirage

The New York Times sells three types of access: Digital for $4 a week, Cooking + Games for $5, and All Access for $6. The middle tier doesn’t get much love, but it’s not supposed to. It’s the decoy that makes All Access look like a no-brainer. Just a dollar more? Of course I’ll take everything.

In a famous test with The Economist’s subscription plans, nearly 84% of consumers selected the top tier when a closely priced decoy was added, compared to just 32% without it.

Prestige Pricing as Halo Generator

Lavazza’s “Tierra!” organic line isn’t just about ethical sourcing—it’s a high-margin beacon. At €7 per pack, it’s more than most Italians spend on coffee. But they don’t have to. The presence of Tierra! elevates everything else. Standard blends start to feel affordable, premium, even righteous by association.

A recent diamond retailer case study showed sales conversions for high-value products increased up to 3.2x due to well-placed decoy alternatives, with overall gross profit rising 14.3%.

Local Price Psychology: It’s All in the Name

Apple doesn’t just sell iPhones. It sells the iPhone 15, 15 Plus, 15 Pro and 15 Pro Max. Now it’s adding iPhone “Air” to the mix. They’ve tried bigger, smaller and now thinner—for the wild card slot (Hey, it worked for their laptops!). “Plus” sounds generous, “Pro” sounds elite, “Pro Max” sounds like your phone has a corporate card. “Air” whispers minimalist cool even before you see the spec sheet. The features shift slightly—sometimes barely—but the names do the heavy lifting. 

Most buyers confirm Apple’s strategy and state that model names shaped their perception of value more than tech specs. When every pixel counts and price gaps widen fast, naming isn’t just branding—it’s behavioral design.

Misdirection: The “Look Over There” Strategy 

Back in university, I had a side gig selling family photo packages in department stores. Our job wasn’t just to pitch portraits. It was to close on the spot. We didn’t ask, “Do you want it?” We skipped straight to, “Will that be cash, check or charge?”

That wasn’t just a hard sell. It was a perceptual redirect. By asking how they wanted to pay, we shifted the customer’s mental frame away from whether they wanted to buy and toward how they’d complete the purchase. It worked far more often than it should have.

This is the same behavioral sleight-of-hand behind many modern decoy strategies. The power isn’t just in the price—it’s in the framing. The decoy reframes your decision from “Is this worth it?” to “Which one should I get?” Once you’re asking that question, you’re already in the checkout aisle.

Neuroscientists call this attentional narrowing—when a brain under cognitive load focuses more on comparing available options than stepping back to question the premise. In pricing, that’s gold.

Of course, when done with transparency, this isn’t manipulation. It’s designing decisions to feel intuitive. But the line between the two is thin—and how you cross it determines whether your customer feels smart or suckered.

When Decoys Backfire

BMW tried to charge South Korean drivers a monthly subscription for heated seats. Yes, seats that were already installed in the car. The logic? Make higher-trim packages seem like the better buy. The backlash was instant. Nobody likes the feeling of being charged rent on their own furniture. It wasn’t just tone-deaf—it made consumers question the brand’s integrity.

Recent industry surveys show that clear and transparent pricing structures are among the top factors increasing consumer trust and loyalty in brands across global markets.

Ethics, Transparency and the Marketing Line

The difference between marketing and manipulation isn’t the trick—it’s the tell. The best decoy strategy doesn’t con the customer. It collaborates with them. It assumes they’re sharp, not sheep.

Consumers aren’t naïve. They know there’s psychology behind pricing. They’re fine with that. In fact, they often appreciate it. The resentment only kicks in when the logic is hidden or the tradeoffs feel like traps. That’s when clever becomes cynical.

Want to build trust? Treat pricing like UX. Label the tiers plainly. Don’t bury fees in footnotes. If your cheapest plan is restrictive, say so. If your top-tier is worth the premium, prove it. People don’t mind nudges when they know where the hands are.

Marketing psychologists consistently find that transparent pricing and clear communication strongly correlate with higher customer loyalty and perceived brand trustworthiness in both B2C and B2B environments.

In a world where algorithmic pricing, drip fees and subscription fatigue are all eroding confidence, transparency is a competitive advantage. Done right, your decoy doesn’t just guide the choice—it reinforces the relationship. Because when people feel in on the game, they’re far more likely to keep playing.
Final Takeaway
The decoy effect isn’t a hack. It’s a scaffold. Smart marketers don’t push. They build structures that make one option feel obvious, framing decisions so customers feel clever for saying yes.
You’re not choosing what people pay. You’re shaping what feels worth paying for.

Sources: Growth Method, Lead Alchemists, Shopify Enterprise, Cognitive Clicks, 7Boats, Julien Rio Marketing