Performance marketing - dead or alive?

Folks, as you know, over the history of interactive marketing we've gone from bales of banner ads to focusing on direct marketing-like precision when we market online. 

However, anything can be taken too far or used ineffectively. And of I've late I've read several articles suggesting that the way we do performance marketing (focusing on clickthroughs, in particular) just isn't working.

Some commentaries suggest that we need better behavioral targeting and others say different units of measurement (more emphasis, say, on clickstream analysis). Some people say we should go back to thinking about branding more strategically and worry less about immediate response.

What do you think?  Are current performance marketing tools and approaches adequate? How do you use metrics in your online marketing efforts, and are you happy with how it's working?  Any other comments on this topic?