Brand and performance are one budget decision

First published 22nd November 2024. Updated 25th October 2026 with the latest effectiveness research.

Most marketing budgets are split before anyone asks what the business needs. Performance gets the money that can be tracked this month. Brand gets what is left, if anything. The result is familiar: efficient cost per acquisition for a year or two, then rising costs and flattening growth as the pool of people already inclined to buy runs dry.

The evidence on why this happens is unusually consistent.

What the long-run evidence shows

Les Binet and Peter Field's analysis of the IPA Databank, which holds hundreds of effectiveness case studies, found that brand building and sales activation work on different timescales. Activation produces sharp, short-lived sales responses. Brand building produces smaller immediate effects that accumulate, lowering price sensitivity and making every future activation work harder. In The Long and the Short of It (IPA, 2013) the most effective balance for consumer brands averaged around 60% brand building to 40% activation. Their 2018 update, Effectiveness in Context, found a similar 62:38.

Work with the LinkedIn B2B Institute put the B2B average closer to 46:54 (The B2B Effectiveness Code, 2019). The pattern holds: some sustained investment in reaching future buyers outperforms spending everything on people ready to buy today.

Why the ratio is a starting point, not a rule

The 60:40 figure is an average across many categories. Binet and Field themselves show it shifts with category, brand size, life stage and sales channel. A new direct-to-consumer brand with limited awareness may need more activation early. A mature brand with high awareness but declining penetration may need more brand investment. Using the ratio as a fixed rule misses the point of the research: balance should follow the growth problem, not a formula.

How brands actually grow

Research from the Ehrenberg-Bass Institute, summarised in Byron Sharp's How Brands Grow (2010), shows that brands grow mainly by increasing penetration, recruiting more buyers, most of them light buyers, rather than by deepening loyalty among existing customers. Two conditions make that possible:

• Mental availability. Being easily recalled in buying situations, built through broad reach and consistent distinctive brand assets

• Physical availability. Being easy to find and buy, which online means visibility in search results, marketplaces, AI answers and a fast route to purchase

Performance marketing is strong on the second and weak on the first. Brand activity is the reverse. Treating them as competing budgets ignores that each depends on the other.

Creative quality is a commercial variable

Nielsen's analysis of advertising effectiveness attributes close to half of an ad's sales contribution to the creative itself, more than to targeting or reach. Peter Field's The Crisis in Creative Effectiveness (IPA, 2019) found the effectiveness advantage of creatively awarded campaigns had fallen sharply as short-term, activation-led thinking spread. Long-running campaigns that build consistent assets tend to outperform frequent changes of direction. Marketers usually tire of their own advertising long before customers do.

Measuring both without fooling yourself

Last-click and platform-reported attribution over-credit the final touch and under-credit anything that builds future demand. A sound measurement approach uses several methods together:

• Marketing mix modelling to estimate the contribution of each channel, including offline and brand activity. Open-source models such as Google's Meridian, generally available since January 2025, have lowered the cost of entry

• Incrementality tests, such as geographic holdouts and conversion lift studies, to check what each channel adds beyond what would have happened anyway

• Brand health tracking for awareness, consideration and distinctive asset recognition, read over quarters rather than weeks

What this means in practice

Start from the commercial objective and the stage of the brand, not a channel list. Set a deliberate split between reaching future buyers and converting current demand. Keep distinctive assets consistent everywhere, including performance creative. Then measure the whole system, so short-term efficiency is never mistaken for long-term growth.

Related services: Marketing and Media Advisory · Offline Media · Creative Production

If you would like to review how your budget is balanced, reach out to Raj, Fiona or Rahul at hello@sml.digital.

Sources: Binet and Field, The Long and the Short of It, IPA, 2013; Binet and Field, Effectiveness in Context, IPA, 2018; Binet and Field, The B2B Effectiveness Code, LinkedIn B2B Institute, 2019; Sharp, How Brands Grow, Oxford University Press, 2010; Field, The Crisis in Creative Effectiveness, IPA, 2019; Google Meridian general availability, Search Engine Land