Brand Building Versus Performance Marketing: What the Evidence Says About the Split

LES BINET and Peter Field, two analysts whose work for the UK Institute of Practitioners in Advertising (IPA), have identified a specific mix of brand and performance spend as the most effective across hundreds of case studies. The analysis of around [ ] 1,000 effectiveness campaigns shows budgets favouring roughly 60% brand spend and 40% activation delivered the best results. Surprisingly though, these are not the typical real-world allocations, with short-term performance marketing often dwarfing long-term branding. In this article, we will cover the evidence for the 60/40 budget split, how brand and activation marketing work together, the reasons for a short-term performance bias, and the implications for practice.

The Long and Short of It – What the Evidence Says

Analysis of the IPA Databank – the world's largest repository of effectiveness case studies – concludes that the most effective mix of brand and activation marketing is a little over 60% of the budget on brand-building activity. This ratio has reliably outperformed alternative allocations over decades of studies.

In a representative dataset of entries to IPA awards, those achieving the most significant business outcomes from marketing overwhelmingly saw around 60% of spending going to broader brand communication, and a minority (around 40%) on activation.[7] Systematic reviews, including 996 campaigns analysed by Binet and Field in their report "The Long and the Short of It," validated that putting the majority of spend (about 60%) into brand building and 40% into activation maximised combined short- and long-term profit growth. [6][14]

Some IPA reports even go as far as stating the 60/40 rule as a "rule of thumb" for long-term business growth, emphasising however that it can vary by brand, market and competitive situation. The foundational evidence, they argue, is that brand-building has a major and lasting impact on metrics such as profit, price, and volume, and activation by itself is more limited in building business value in the long term.[10][11][12]

Brand Building and Sales Activation: Two Different Jobs

To understand why this 60/40 mix is optimal in many cases, we need to recognise the different roles of brand building and sales activation in driving business performance.

Effective branding, the evidence suggests, relies on repetitive, broad-reach, mass exposure that leaves positive, implicit memory structures in consumers' minds. These mental availability and associative brand links contribute to higher perception of quality, willingness to pay a premium, and defensive insulation from rival brand switching – all powerful levers for shareholders and not easily achievable with performance marketing alone. [14][15]

Contrast that with sales activation or performance marketing, which tends to be more narrowly targeted, logically explicit, and time-bound – efficient at capturing existing demand but limited in powerfully shifting core perception or building long-lasting relationships and consideration across the target market. [14]

Measurement Asymmetry Favours Short-Term thinking

So if the evidence clearly shows that optimising the impact of marketing spend demands a strong skew towards brand building, why are performance and activation so often prioritised over branding in real-world marketing budgets? In part, it's likely due to a measurement asymmetry.

The immediate, tangible effects of performance marketing are more intuitive to measure, valuing every click, impression, and conversion as an indisputable success. But global brand perception, affinity, and approval – the bedrock of profitable long-term growth – can be notoriously hard to tie directly to dollars spent, and this uncertainty makes them, from a finance perspective, appear less highly valued. [9][11]

Combine this with rapid cycle competitive pressure around brands, targets, and reporting, and suddenly the certainty of short-term metrics can seem preferable to the longer-term brand value imperative. In reality, of course, a positive perception of a brand is the first step in the purchase funnel, while performance tends only to capture the bottom of the funnel. [10][11]

Applying the 60/40 Ratio

With the evidence, let's proceed to nuance. Though 60/40 is an empirically based average, it can shift depending on context. For example, practitioner summaries of Binet & Field report a marginally different average allocation for B2B, with recommended brand spend of around 46% for B2B versus about 60% for B2C brands.

The evidence contains helpful guidelines for when to adjust this allocation:

_[Please verify specific evidence for these summarised guidelines – ideally by month and source. Offer more space if needed. ]_

What's clear is that ultimate success critically depends on sustained investment in both areas. Brand and performance are not a zero-sum game, but rather two sides of the same coin, focused on different parts of the marketing and conversion process. [12][13]

Risks of Neglecting Brand Investment

At this point, it's worth highlighting some risks when companies get the brand/performance balance wrong. Binet and Field looked at a number of cases where campaigns were unbalanced, with either too much or too little of brand input. The risks they identify, based on hundreds of effectiveness studies, are:

1. Too much spend on performance if not balanced with branding

Without strong brand backing, even the best activation campaigns are limited on their own, driving transactional but less complete customer relationships.

1. Claims about performance marketing driving long-term growth on its own

The short-term ROI delivered by performance is often mistaken for long-term success. But evidence shows that without long-term branding to grow the strategic funnel, growth cannot be sustained. [14]

1. Lack of long-term business growth without sufficient brand investment

Without sustained investment in the strength of the brand, companies risk a lack of growth in the long term as traditional competitive barriers fall away and buyer power grows. [14]

What's clear is that effective long-term business growth critically depends on solid strategic investment to build and maintain strong brands – and this needs to be sustained and balanced with tactical performance.