The further away you get from direct marketing where you can track conversions, and the further up the funnel you go, the less and less analytics help. Another way to think of it is that there are tranches of spend - the central tranche is easily attributable direct marketing but there's a limit to how much you can efficiently spend, but the further from the center you go the less effectively you can measure the efficacy of the spend but there are more options to absorb ad dollars.

Maybe 15 years ago multi-touch attribution was the big push but even that only adds minimal insights into how ad spend affects the behavior you're trying to measure. It helps with high-level channel attribution but it's still at best directional.

So once you reach a point when increasing spend at Meta/Google results in superlinear increases in CAC vs. spend, you eventually end up having to move those ad dollars elsewhere and over time (and a lot of money) you get an intuitive understanding of how these other mediums trickle down to the metrics that matter.

You're totally right about agencies and their perverse incentives and how that leads to sub-optimal spend allocation.