In the world of marketing, performance marketing often takes the spotlight. With its promise of quick results and measurable ROI, it can be tempting to invest all your efforts into short-term gains. However, if you're only focusing on performance, you're missing out on the bigger picture. To truly succeed in the long run, you need to strike a balance between brand-building and performance marketing.
Understanding the 60/40 Rule
Les Binet and Peter Field, two of the most influential marketing effectiveness researchers, have spent years studying how the most successful brands allocate their marketing budgets. Their research, known as the 60/40 rule, suggests that brands should spend 60% of their budget on brand-building and 40% on performance or sales activation.
So why this specific split? Brand-building activities, such as emotional storytelling, social media campaigns, and traditional media, work over the long term. They aim to increase brand recognition, loyalty, and customer engagement. These activities might not lead to immediate sales, but they create lasting impressions in the minds of your customers.
Performance marketing, on the other hand, is all about short-term wins. It includes direct-response ads, promotions, and discounts that aim to drive immediate sales. While these tactics can bring in quick results, they don't build the long-term equity that sustains a brand over time.
Brand Building marketing from Lego
Performance marketing by Lego
Why is Brand Marketing so Important?
The simple truth is that brand marketing is essential for long-term growth. While performance marketing gives you an instant boost, brand-building creates a foundation for your business that allows it to thrive over time. Without brand marketing, your short-term tactics will eventually hit a ceiling, and it will become harder to scale your business.
When people are emotionally connected to your brand, they’re more likely to choose your product or service over competitors. Think of the brands you trust and feel loyal to — chances are, it’s because they’ve consistently invested in telling their story and building a relationship with you as a customer. Brand marketing makes your business memorable and builds trust, making it more likely that customers will return in the future.
A Real-World Example: the Power of Brand Building
During my time working on the client side, I experienced firsthand how increasing brand marketing positively impacted performance marketing efforts. Initially, we focused heavily on performance marketing — running promotions and direct-response ads to drive conversions quickly. While it worked in the short term, we eventually noticed diminishing returns.
We decided to pivot by investing more in brand marketing, focusing on telling our brand story, enhancing emotional connections, and becoming more visible across channels. The results were clear: as brand marketing increased, the performance marketing efforts began to yield even better results. Customers recognized our brand and were more receptive to our offers. The combination of a strong brand presence and well-executed performance marketing led to a significant lift in sales, proving that brand-building amplified the effectiveness of our short-term tactics.
The Pitfall of Over-Reliance on Performance Marketing
If you invest all your resources into performance marketing without building your brand, you’ll likely run into a few issues:
Diminishing returns: You might see an initial spike in sales, but over time, performance campaigns lose their impact as customers don’t have a strong connection to your brand.
Lower profitability: Constantly running promotions or discounts can lower your profit margins. A strong brand can command higher prices because customers value the brand experience and trust what you offer.
Weak loyalty: Customers may purchase once, but without brand-building efforts, they’re less likely to become repeat buyers.
![Graphics saying Sale, Buy, wow, new, now or never]()
Conclusion
It’s clear that performance marketing alone isn’t enough to drive long-term business success. While it’s effective for immediate sales and conversions, it doesn’t build the brand equity that sustains growth over time. Investing in brand-building ensures that your business will not only survive in the short term but thrive in the long term. By balancing brand marketing with performance marketing, you'll create a strategy that delivers both quick wins and long lasting success.
So, the next time you’re planning your marketing budget, think beyond just the short-term results. Invest in your brand — and watch how it amplifies everything you do.
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