Every marketing budget eventually comes down to one argument: brand vs performance marketing. Brand building pays back slowly and is hard to see in a dashboard. Performance marketing pays back fast and reports itself in real time. So when budgets tighten, money drifts towards the thing that can prove itself this quarter. The research says that drift is now costing brands growth.
This report pulls together the evidence from the IPA Databank, Ehrenberg Bass, The CMO Survey, Analytic Partners and the brands that tested the question with their own money. It covers what each type of marketing does, how the ideal split changes by category and life stage, how brands are really spending in 2026, and a practical plan for setting your own split.
The short version
- There is no universal 60:40. The IPA optimum ranges from about 80% brand in financial services to 35% for a new launch, and 46% for B2B.
- Most brands are underweight on brand. US marketers put 68.8% into short term performance in late 2024, up from 59.9% a year earlier, while saying 50:50 is ideal.
- Cutting brand building is slow poison. Brands that stop advertising lose 16% of sales in year one and 36% by year three.
- Performance numbers flatter themselves. Analytic Partners finds last click attribution overstates clickable media by 2 to 10 times, and around 30% of paid search is driven by brand activity.
- The two work best together. In the IPA data, campaigns combining brand and activation scored 1.5 for business effects, against 0.7 for activation alone.
What is the difference between brand and performance marketing?
Brand marketing builds memory. It aims to make more people think of you, feel good about you and choose you later, often when they are not in the market today. Its effects are broad, emotional and slow to arrive, but they last. Performance marketing, which Binet and Field call sales activation, converts demand that already exists. It targets people close to buying, asks them to act now and is measured on clicks, leads and sales within days.
Neither is a channel. A YouTube series can be brand building, and a YouTube ad with a discount code can be activation. TV can drive immediate response and search can carry a brand message. The difference is the job the activity does and the timeframe you judge it on.
| Brand marketing | Performance marketing | |
|---|---|---|
| Job | Build memory and preference across the whole category | Convert people already looking to buy |
| Audience | Broad: future buyers as well as current ones | Narrow: people showing intent now |
| Payback | Months to years, compounding | Days to weeks, then fades |
| Typical formats | Video, TV, branded content, creator series, sponsorship | Paid search, retargeting, shopping ads, affiliate, promo codes |
| Measured by | Awareness, consideration, share of search, price elasticity, econometrics | CTR, CPA, ROAS, conversion rate |
| Main risk | Hard to attribute, easy to cut | Diminishing returns, claims credit for sales it did not cause |
Advertain guidance based on Binet and Field definitions.
Brand vs performance marketing: what the long term evidence says
The famous 60:40 rule comes from Les Binet and Peter Field's The Long and the Short of It, published by the IPA in 2013 from campaigns in its effectiveness databank. Their analysis found effectiveness peaked when around 40% of spend went to activation and the rest to brand building. Thinkbox summarised the headline findings at the time: long term investment over three years or more delivered double the profit of a short term approach, and emotional advertising was twice as efficient as rational.
The timing matters. Activation produces a sharp spike that fades within weeks. Brand building produces smaller gains that accumulate. The chart below shows why short term measurement keeps underrating brand: emotional campaigns barely outperform rational ones in year one, then pull far ahead.
Share of campaigns reporting very large profit effects, by time period
In 2018 Binet and Field revisited the work in Effectiveness in Context. The IPA notes that the overall optimum moved only slightly, to 62:38 for brand and activation. What changed was the realisation that the average hides a wide range. According to System1, the optimal brand share went as high as 80% in some contexts, while optimal activation never rose above 56%. Putting everything into brand cost about 20% of effectiveness. Putting everything into activation cost over 50%.
The right split depends on your category and life stage
This is where most budget debates go wrong. Teams argue about whether 60:40 is right, when the better question is what the evidence says for a business like theirs. The chart shows the optimal brand share for the situations we could verify against more than one source.
Optimal share of budget for brand building, by situation
Category: high consideration needs more brand
Financial services sits at the top because purchases are infrequent, trust matters and buyers choose from brands they already know when the moment comes. Tracksuit, summarising the same IPA work, lists the factors that push the optimum towards brand: high consideration purchases, online or subscription models, big brands, category leaders, radical innovation and growing categories. New brands and declining categories lean the other way.
Life stage: launches start activation heavy
A new brand has no memory to harvest, so it needs distribution and trial first. Effectiveness in Context puts the early launch optimum at roughly 35:65 in favour of activation, according to The Key Point. The trap is staying there. Once a brand has trial, the evidence says the balance should move steadily towards brand building as it grows.
Online brands need more brand than they think
The most counterintuitive finding is that online brands perform best at about 74% brand, against 55% for offline brands. Digital businesses often assume their performance channels are the growth engine, but those channels mostly capture demand. Without brand building there is less demand to capture, and every click gets more expensive.
B2B: closer to 50:50
For B2B, Binet and Field's 2019 work with the LinkedIn B2B Institute put the optimum at 46% brand and 54% activation. The current B2B Institute page rounds this to 50:50. Either way, B2B is not the pure lead generation game many sales led companies treat it as. The same research found a 10 point gain in excess share of voice corresponded to about 0.7 points of market share growth.
Premium brands chasing price
Brands that want to hold or raise price need even more brand building. Les Binet told Marketing Week in 2023 that premium brands pursuing a price strategy may need to move from 60:40 to closer to 70:30.
“Brand building not only generates volume but it also supports price, by reducing price elasticity.” Les Binet, Marketing Week, 2023
How brands are really splitting their budgets in 2026
Whatever the theory says, practice has moved the other way. The CMO Survey, run by Deloitte, Duke's Fuqua School of Business and the American Marketing Association, asks US marketers how they divide spend. In early 2023 they put 40.1% into brand building and 59.9% into short term performance. By Fall 2024 brand had fallen to 31.2%. In both years they said the ideal was roughly 50:50.
US marketers: actual vs ideal share of spend on brand building
Other surveys tell the same story. A study by Adobe and MMA Global of 389 senior marketers, reported by Marketing Week in September 2025, found 57% of budget sits behind performance. The NIQ CMO Outlook 2026 found 55% of marketing leaders put 60% or more of budget into long term brand building, down four points on 2024, and only 69% say their CEO and CFO back long term brand spend, down 11 points. The Gartner 2025 CMO Spend Survey found brand awareness takes 29% of media spend, with more than half of budgets going to consideration and conversion.
Marketers know this is a problem. In Marketing Week's Language of Effectiveness 2026 survey of 630 brand side marketers, 49.2% said their campaigns were too focused on performance and sales rather than brand building, and 71.7% admitted ease of measurement dictates how they allocate budget. There are signs of a correction in the UK. ISBA, Ebiquity and the WFA found that for 2026, UK advertisers planning to increase brand building outnumber those increasing performance by more than two to one.
Share of advertisers planning to increase spend in 2026
What happens when brands cut brand building?
The cost of going dark does not show up in the next quarter, which is why it is so tempting. Ehrenberg Bass Institute researchers studied Australian consumer goods brands that stopped mass media advertising for a year or more. As Marketing Week reported, sales fell 16% on average after one year, 25% after two and 36% after three, compared with the last year of advertising. The institute's own summary describes the decline as gradual, which is precisely what makes it dangerous: it hides inside normal noise until it is a trend.
Average sales decline after brands stopped advertising
Adidas: over investing in what it could measure
In 2019 Adidas revealed that its advertising split had drifted to 23% brand and 77% performance. When it ran econometric modelling, it found brand activity drove 65% of sales across wholesale, retail and ecommerce. Simon Peel, then global media director, told Marketing Week the business had believed digital advertising was driving ecommerce sales and had over invested as a result.
Adidas: where the money went vs what drove sales
Airbnb: cutting performance and leaning on brand
Airbnb went the other way. In the first quarter of 2021 its marketing spend fell 45% to $119.2 million as it roughly halved performance marketing, and Brian Chesky said around 90% of traffic was direct or unpaid, according to Campaign. A year later, Marketing Week reported fourth quarter sales and marketing down 44% year on year while traffic in the seven countries running brand campaigns was up almost 20% on 2019. Its annual report for 2022 states that the strength of the Airbnb brand allows it to be less reliant on performance marketing. Airbnb had unusual advantages, but the direction is instructive.
Why performance marketing looks better than it is
Performance channels sit at the end of the journey, so they are present at the moment of sale and claim credit for it. Some of that credit belongs to the brand work that made the customer search in the first place. Analytic Partners, a marketing measurement vendor, found in its ROI Genome data across 750 plus brands that last click attribution overstates clickable activity by 2 to 10 times, that around 30% of paid search is driven by brand and upper funnel activity, and that brand marketing outperformed performance marketing 80% of the time.
The best known test came from eBay. Economists Thomas Blake, Chris Nosko and Steven Tadelis switched off paid search on eBay's own brand terms and found no measurable short term benefit from those ads: people searching for eBay clicked the organic result instead. For non brand keywords, most spend reached frequent users who would have bought anyway, producing negative average returns. We covered the wider measurement problem, including the WARC Multiplier Effect research, in our report on marketing ROI.
How brand building and performance marketing can work together
The point of the research is not that performance marketing is bad. It is that each works better with the other. In the IPA data, campaigns that combined brand building and activation scored 1.5 for business effects, against 1.3 for brand alone and 0.7 for activation alone. The IPA presentation puts it simply: integration can double efficiency.
Business effects score by campaign type
The mechanism is straightforward. Brand building makes performance media cheaper and more effective, because people already know and prefer you when they see the ad or search the category. It also lets you charge more. An IPA analysis of 40 FMCG econometric studies by Grace Kite and Joy Talbot found price elasticity moved towards zero as media spend rose, with Yorkshire Tea's elasticity 25% below the category norm after its 2022 price rise. Kantar's Blueprint for Brand Growth found brands that predispose more people to choose them have 2 times higher average selling prices and are 4 times more likely to grow share.
Good creative bridges the gap too. Mark Ritson, writing in Marketing Week, cited System1 data showing ads rated highly for long term brand effects were above average on short term response 98% of the time. In other words, strong brand work usually sells now as well. The reverse is rarely true. WARC's 2026 research adds that 67% of marketers say their C suite recognises the importance of brand, but only 19% see brand equity treated as a driver of business outcomes, which is the gap measurement needs to close.
A practical plan: setting your brand vs performance marketing split
Here is how we approach the split with clients. Start from the evidence for your situation, then adjust for where you are today. The table gives starting points, not rules.
| Your situation | Starting brand share | Why |
|---|---|---|
| New brand, first 12 to 24 months | 35% to 45% | Need trial and distribution first; move towards brand as awareness grows |
| B2B with long sales cycles | 45% to 50% | Most buyers are out of market today; be remembered when they enter it |
| Established consumer brand | About 60% | The IPA average for for profit brands |
| Online or subscription brand | 65% to 75% | Performance captures demand; brand creates it |
| Financial services, high consideration | 70% to 80% | Trust and memory decide the choice |
| Premium brand protecting price | About 70% | Brand building reduces price sensitivity |
Advertain guidance based on Binet and Field (IPA) ranges. Adjust for budget size, category growth and competitor spend.
Seven steps to set and defend your split
- Audit what you really spend. Classify every line by job, not channel. Most teams find their brand share is lower than they thought.
- Pick your benchmark. Use the table above to choose a starting share for your category and life stage.
- Move in steps. Shift 5 to 10 points a quarter rather than flipping overnight, so you can watch the effect on search volume and CPA.
- Build brand assets that last. Video series, creator partnerships and branded content keep working long after the media spend ends.
- Connect the two. Use the same distinctive assets, characters and message in brand and performance work so each makes the other more efficient.
- Measure brand properly. Track awareness, share of search and brand lift alongside ROAS, and use econometrics or incrementality tests rather than last click.
- Agree the timeframe with finance. Get the CFO to accept that brand is judged over 12 to 36 months, before the first quarterly review.
For measurement, our guides to measuring brand awareness, calculating share of search and running a YouTube brand lift study cover the practical setup. For where the money goes, see our report on paid vs organic social media.
This is also why we build brand content that performs. Our work with Formula E reached more than 7 million views across YouTube, Instagram and TikTok, and we took Paul Ribot from 0 to 30,000 YouTube subscribers in 75 days. Content people choose to watch builds memory and drives action at the same time. You can see more on our work page.
Frequently asked questions
What is the 60 40 rule in marketing?
It is Binet and Field's finding that, on average, brands get the best results by putting about 60% of budget into long term brand building and 40% into short term sales activation. Their 2018 update put the average at 62:38, but the right split varies widely by category and life stage, from about 80:20 in financial services to 35:65 for a new launch.
What is the difference between brand marketing and performance marketing?
Brand marketing builds memory and preference among a broad audience, including people not buying today, and pays back over months and years. Performance marketing targets people ready to buy now and is judged on immediate clicks, leads and sales. Brand creates demand; performance captures it.
Is performance marketing the same as digital marketing?
No. Digital describes the channel and performance describes the job. A YouTube series or a creator partnership is digital brand building, while a TV ad with a response code can be activation. Judge each activity by what it is designed to do and over what timeframe.
How much should B2B brands spend on brand vs performance?
Binet and Field's research with the LinkedIn B2B Institute found the B2B optimum was about 46% brand and 54% activation, which LinkedIn now rounds to 50:50. That is far more brand than most B2B companies spend.
How do you measure brand marketing?
Track leading indicators such as awareness, consideration and share of search, run brand lift studies on video campaigns, and use econometrics or incrementality tests to connect brand activity to sales and price over 12 months or more. Avoid judging brand spend on last click attribution.
