Knowledge Paper 016 · MEDIA
How Much Should I Invest in Brand Building and Performance?
Why 60:40 is a starting point, not a law.
The short answer
The famous answer is 60:40.
Roughly 60% of marketing investment into long-term brand building.
Roughly 40% into short-term activation or performance.
It is a useful rule of thumb.
And it gave lazy ad planners a slide for their PowerPoint decks.
But it is not a law.
The right split depends on your category, your buying cycle, your level of risk, your competitive position and how much trust people need before they choose you.
The simple way to think about it.
Some marketing helps people buy now.
Some marketing helps people remember you later.
You need both.
Activation captures existing demand.
Brand building creates future demand.
The mistake is assuming every business needs the same balance.
They do not.
A chocolate bar, a pension provider, a car dealership, a legal firm and a challenger bank are not solving the same problem.
So why would they use the same split?
A useful starting point.
The 60:40 rule became famous because it gave marketers a simple way to explain a difficult truth.
Short-term sales activity is not enough.
If all your money goes into immediate conversion, you may look efficient for a while.
Then the pipeline begins to thin.
Because fewer people know you.
Fewer people remember you.
Fewer people trust you before they enter the market.
That is when performance marketing starts doing all the heavy lifting at the most expensive moment.
But 60:40 is an average.
Averages are useful.
They are also dangerous.
The average human has one testicle and one ovary.
Technically true.
Strategically useless.
The real question is not:
“What is the industry standard split?”
The real question is:
The five variables that matter.
1. Purchase frequency
If people buy the category often, short-term activation can work harder.
Food.
Fashion.
Household goods.
Low-cost ecommerce.
People are regularly in market.
But if people buy rarely, brand has to do more work.
Cars.
Mortgages.
Insurance.
Pensions.
Kitchens.
Enterprise software.
Professional services.
Most of the market is not buying today.
That takes us straight back to the 95–5 Rule.
If most of your future buyers are out of market, you need to build memory long before they need you.
2. Risk
The higher the perceived risk, the more brand matters.
Financial services is the obvious example.
People are not simply buying an interest rate, an app or a fee structure.
They are buying reassurance.
Competence.
Stability.
Trust.
The feeling that these people will still be here in ten years.
In high-risk categories, brand is not decoration.
Brand is part of the product.
3. Complexity
Some categories are difficult to evaluate.
Current accounts.
Insurance.
Legal services.
Accountants.
Cybersecurity.
Energy suppliers.
Most people do not have the time, interest or expertise to compare every technical detail.
So they use shortcuts.
Have I heard of them?
Do they seem credible?
Do other people trust them?
Do they look like they know what they are doing?
When the functional differences are hard to judge, brand carries more of the decision.
4. Growth stage
A new business often needs activation to get moving.
You need leads.
Sales.
Cash.
Proof.
Nobody should pretend otherwise.
But if a young business only invests in activation, it risks becoming trapped in demand capture.
Always chasing the next lead.
Always paying for the next click.
Always dependent on people who are already ready to buy.
Brand building creates future efficiency.
It means that, later, more people search for you by name.
More people recognise you.
More people trust you before the sales conversation starts.
5. Competitive pressure
You are not making these decisions in isolation.
If your competitors are investing in fame, distinctiveness and mental availability while you are only buying bottom-of-funnel leads, you may look efficient right up until the market forgets you exist.
That is the danger.
Performance metrics can make short-term activity look rational even when long-term brand strength is being eroded.
Where retail media fits.
Retail media is a good example of why this debate should not be simplistic.
It can be extremely powerful.
It reaches people close to purchase.
It can influence shoppers at the point where decisions are being made.
It can capture demand beautifully.
For some brands, especially in grocery and ecommerce, it is now an essential part of the plan.
But retail media is often strongest near the end of the journey.
It helps convert buyers who are already shopping.
It does not automatically build fame, emotional memory or long-term preference across the whole market.
So the question is not whether retail media is good or bad.
The question is what job it is doing.
If it is only harvesting existing demand, something else still needs to grow tomorrow’s demand.
The brand-performance scale.
Use this as a simple guide.
Financial services needs more brand.
Financial services is a useful category because it exposes the weakness of simplistic performance thinking.
Nobody wants a clever pension advert from a company they do not trust.
Nobody wants a slightly cheaper investment platform that feels unstable.
Nobody wants a mortgage provider that looks like it might disappear next year.
The product is not just the product.
The brand carries:
- trust
- security
- competence
- calm
- reputation
That means financial services often needs to lean more heavily into long-term brand building than a low-risk impulse category.
Because when trust is the product, brand is not optional.
Performance still matters.
None of this means performance marketing is bad.
Performance is essential.
Search.
Retail media.
Retargeting.
Lead generation.
Promotions (sometimes).
Conversion activity.
These things help capture people who are ready to buy.
The problem comes when businesses mistake demand capture for demand creation.
Performance marketing is excellent at finding people who are already in market.
But it cannot do all the work of making people remember, trust and prefer you before they start shopping.
A local example.
Imagine a car dealership.
Most people in the town are not buying a car this week.
But they still notice things.
The forecourt.
The signage.
The vans.
The sponsorship of the local football team.
The radio ads.
The reviews.
The way staff behave.
The brand is being built long before the customer starts searching for “used cars near me.”
When that search finally happens, performance activity matters.
But brand memory has already shaped who feels credible enough to click.
The real danger.
The danger is not spending too much on performance.
The danger is believing performance tells the whole story.
Because performance is easier to measure, it often looks more accountable.
Brand building works more slowly.
It creates memory.
Trust.
Familiarity.
Preference.
Future demand.
Those effects are harder to see immediately.
But they are often what make future performance cheaper and more effective.
Common mistakes
Treating 60:40 as a formula.
It is a useful average, not a universal prescription.
Going all-in on performance.
This may create short-term sales while weakening future demand.
Treating brand as vague.
Brand building is not fluff.
It builds memory, familiarity, trust and future demand.
Ignoring category risk.
High-risk categories usually need more reassurance, fame and credibility.
Measuring only what happens now.
Not everything valuable happens immediately.
TheSignalWorks View
The question is not:
Brand or performance?
The question is:
What job needs doing?
If people are buying now, help them buy.
If people will buy later, help them remember.
If the category is risky, build trust.
If the category is infrequent, build mental availability.
If the category is complex, make the brand easier to choose.
Performance marketing harvests demand.
Brand building grows the crop.
The right split depends on the field.
Key Takeaways
- 60:40 is a useful starting point, not a fixed rule.
- The right brand-performance split depends on purchase frequency, risk, complexity, growth stage and competition.
- Financial services and other trust-heavy categories usually need more brand investment.
- Retail media can be powerful, but it often works closest to purchase.
- Performance captures demand. Brand building creates future demand.
Frequently Asked Questions
Is 60:40 always the right split?
No.
It is an average.
Some categories need more brand.
Others can justify more activation.
When should a business spend more on brand?
When the category is risky, infrequent, complex, trust-driven or heavily dependent on reputation.
When should a business spend more on performance?
When there is strong existing demand, frequent purchasing, low risk and clear conversion opportunities.
Is retail media brand building or performance?
It can do both, but much of its power comes close to the point of purchase.
It is often strongest as demand capture.
Should small businesses invest in brand?
Yes.
For small businesses, brand may include reputation, visibility, reviews, signage, local presence, word of mouth and consistency.
Further Reading
- Les Binet & Peter Field — The Long and the Short of It
- Byron Sharp — How Brands Grow
- Jenni Romaniuk — Better Brand Health
- John Dawes — research on the 95–5 Rule
- Robert Heath — The Hidden Power of Advertising
Related Knowledge
About TheSignalWorks
At TheSignalWorks, we help organisations balance the pressure to sell now with the need to be remembered later.
Because growth does not come from choosing between brand and performance.
It comes from knowing what each one is for.