The 60/40 rule.

There is a meeting that happens in almost every company. The finance team asks why the brand campaign cannot be measured. The marketing team explains that its effects are cumulative. Someone suggests moving the budget to performance channels, where the returns are visible. Everyone nods, because visible is persuasive.

The result is a slow, quiet starvation of the thing that makes the performance channels work in the first place.

What the IPA data found

Les Binet and Peter Field analysed thousands of IPA effectiveness case studies and found a consistent pattern: campaigns that balanced long-term brand building with short-term activation outperformed those that over-invested in either. Their rough heuristic became famous as the 60/40 rule — around 60% of budget on brand, 40% on activation, for long-term growth.

The exact ratio is not a law. It varies by category, margin, company stage and competitive position. But the underlying finding is robust: brand building creates the conditions for performance marketing to work. It lowers acquisition costs, improves conversion, and gives activation something to activate.

The quarterly trap

Activation is measurable, so it gets funded. Brand is cumulative, so it gets cut. This is not a failure of intelligence. It is a failure of accounting. You can see the cost of the brand campaign this quarter. You cannot see the sale that did not need a discount because the customer already trusted you.

The same asymmetry applies to content, design, customer experience and reputation. The returns are real but diffuse. They show up as a lower cost per acquisition next year, a shorter sales cycle, a higher price the market will tolerate. None of that fits neatly into a monthly dashboard.

You cannot attribute the absence of a sale to the brand you built three years ago. But it is still there, in the numbers, quietly.

How brand actually pays

Brand is not a logo or a tone of voice. It is a set of memory structures: what the name brings to mind, when it comes to mind, and how it feels. Strong brands are easy to recall in buying situations and easy to recognise when encountered. That ease is the asset.

It shows up in three places. Lower acquisition costs, because people click on names they recognise and skip the ones they do not. Higher conversion, because trust reduces perceived risk. Pricing power, because a brand with a clear meaning can charge for it. None of these appear as a line item called “brand”.

This is also why discounting is so corrosive over time. It teaches the market that the list price was never real. You can buy a quarter with it. You cannot buy a reputation with it.

How to protect the patient work

• Ring-fence a floor of brand investment. Treat it like research and development: a fixed cost of being in business, not a discretionary extra.
• Measure different things. Brand tracking, mental availability, distinctive asset recognition and share of search are imperfect, but they see what CPA cannot.
• Judge brand work over years, not weeks. Set expectations before the campaign, not after the first flat month.
• Connect the two. Use brand assets in performance creative. Use performance data to learn which messages deserve to become brand messages.
• Do not turn the ratio into a religion. A start-up finding product-market fit is not a mature soap brand. The principle is balance, not arithmetic.

Patience as a stance

The 60/40 idea is often presented as a budgeting rule. It is better understood as a philosophical position. It says that some of the most valuable things you can do take longer than the reporting cycle, and that a company’s job is to protect them from the tyranny of the visible.

That is not an argument for ignoring performance. It is an argument for knowing what performance owes to patience — and for paying the debt before it comes due.