The 60/40 Rule
Les Binet and Peter Field analysed hundreds of campaigns in the IPA Databank — the world's largest database of advertising effectiveness case studies — and found that brands generating the strongest long-term business results invested roughly 60% of their budget in brand building and 40% in short-term activation. This is not a universal prescription. Peter Field, who has discussed this research in depth on That's What I Call Marketing, is careful to note that the ratio varies by category, brand maturity, and competitive position. But it is a useful starting point for a debate that most organisations are getting badly wrong.
The reason the balance matters is that brand building and performance marketing work through entirely different mechanisms and on entirely different timescales. Brand activity builds mental availability — the likelihood that your brand comes to mind when a buying situation arises. That effect is slow, cumulative, and long-lasting. Performance marketing captures demand that already exists. It works immediately and fades almost as quickly. Both are necessary. The problem is that performance marketing is far easier to measure, which leads most organisations to over-invest in it.
What Happens When You Get It Wrong
Leigh Barnes, Chief Customer Officer at Intrepid Travel, described on the show what this looks like in practice. Intrepid had invested heavily in performance marketing for years, optimising for short-term conversions. When COVID collapsed travel demand in early 2020, there was no brand equity to fall back on. Every metric fell simultaneously because the brand had no presence in the minds of customers who weren't actively looking to book right now. The business survived, but the lesson was stark: performance marketing only works when demand exists. Brand building is what creates the demand in the first place.
This is the asymmetry that Peter Field describes as the core finding of the IPA data. Short-term effects are measurable and reassuring. Long-term brand effects are harder to see, which makes them easy to cut — but they are where the compounding returns actually live. Brands that consistently invest in brand building over time generate higher profit margins, stronger pricing power, and more resilient customer relationships than those that optimise for immediate conversion.
Why Performance Marketing Is Seductive
Tom Roach — VP Brand Strategy at Jellyfish and a regular voice on effectiveness thinking — has argued that the dominance of performance marketing in modern budgets is almost entirely a function of measurement. You can see exactly what a paid search campaign returned last week. You cannot easily see what last year's brand campaign is worth to this month's conversion rate. Finance teams, who control budget conversations, are drawn to what they can measure. This creates systematic pressure to under-invest in brand even when the evidence for its value is overwhelming.
Grace Kite — founder of Magic Numbers and one of the most respected econometricians working in marketing — has shown through modelling that this measurement gap is real but not insurmountable. Econometric models can quantify the long-term revenue contribution of brand investment, making it possible to speak the language of finance and present the trade-offs clearly. Her approach: model what happens to revenue when brand investment is cut, and show that number to the CFO.
The Practical Implication
The most useful reframe from the research is this: brand and performance marketing are not competitors — they are complements that work at different speeds. Performance marketing harvests the demand that brand marketing creates. Without brand investment, the pool of potential customers shrinks over time as mental availability erodes. Without performance marketing, you fail to capture the demand that does exist. The goal is not to choose between them but to understand what each does and fund both accordingly.
Peter Field's practical recommendation: track your share of voice relative to your share of market. If your share of voice consistently exceeds your share of market — what researchers call Excess Share of Voice, or ESOV — you are building brand equity that will compound over time. If you are consistently below, you are eroding it.
Go Deeper
These topics are covered extensively in the That's What I Call Marketing archive.
