Brand or performance? The research says you need both, in a specific ratio

Every marketing budget eventually hits the same argument. One side wants measurable results this quarter: search ads, retargeting, promotions. The other wants to build something that lasts: brand campaigns, content, reputation. Each side thinks the other is wasting money.

In 2013, Les Binet and Peter Field analyzed hundreds of campaigns in the IPA Effectiveness Databank and gave the argument an answer. Their work, “The Long and the Short of It,” is still the most cited study on the subject, and its central chart looks something like this.

Two different mechanisms

Activation (performance marketing) produces sharp, immediate spikes in sales. It works on people who are already in the market, and its effects fade almost as soon as the spending stops. It’s highly measurable, which makes it easy to justify and easy to over-fund.

Brand building produces small effects in the short term and large, compounding effects over the long term. It works on people who aren’t in the market yet, by making sure that when they are, your name comes to mind first. It’s hard to measure in a quarter, which makes it easy to cut.

The finding that changed the conversation: campaigns that invested in brand building outperformed activation-only campaigns on almost every long-term business measure, including profit, market share and price sensitivity. But in the short term, activation-only campaigns looked better. Judged over six months, the wrong strategy wins.

The 60/40 rule

Across the databank, the most effective campaigns split spending roughly 60% brand building and 40% activation. The ratio shifts by category and by stage: a new product leans harder on activation to get its first customers, a mature brand leans harder on brand to defend its position. Binet and Field’s later work found the ratio holds surprisingly well even in digital-heavy media plans.

What this means for a smaller business

You don’t need a television budget to build a brand. For most of the businesses we work with, brand building looks like:

• A distinctive identity that’s recognizable at a glance and used consistently everywhere.
• Content that’s useful to people who aren’t ready to buy yet.
• A point of view, repeated often enough that people associate it with you.
• Creative that’s memorable rather than merely accurate.

And activation looks like search, retargeting, email to your list and offers to people who’ve shown intent.

The mistake isn’t choosing one. It’s measuring both on the same timescale. Give activation a quarter and brand a year, and judge each by its own clock.