Brand Equity Is the Growth Engine Performance Marketing Can’t Replace

Ask a CMO what keeps them up at night, and it is rarely a shortage of data. It is the opposite: dashboards full of numbers that no longer add up to growth.

U.S. digital ad spend hit $309.3 billion in 2024, up 15.1 percent year over year, according to eMarketer. It was the first time spend had crossed $300 billion. For most brands, that spending is not producing lasting demand. Loyalty is softening. Acquisition costs are climbing. Campaigns that used to convert now barely move the needle.

The problem is not a lack of tools or targeting precision. Marketers have simply optimized for the wrong finish line.

The Performance Trap

Performance marketing is easy to love. It is immediate, precise, and reportable in a Monday morning meeting. Finance understands a cost per click. Executives understand a dashboard. But performance marketing was never built to create belief, and belief, not clicks, is what makes a customer choose the same brand twice.

WARC’s Multiplier Effect research found that shifting from a balanced strategy to performance-only advertising cuts ROI by an average of 40 percent. Brands that move the other direction, from performance-only toward a balanced mix, see ROI improve 25 to 100 percent, averaging a 90 percent lift. The irony is that the easiest metric to optimize, the click, is often the one that matters least to long-term growth.

Why Consumers Are Tuning Out

Part of the problem is consumer fatigue. More than eight in ten U.S. consumers, 81 percent, say they actively try to ignore or tune out advertising, according to a Gartner survey. Gen Z, the most advertised-to generation in history, is also the most resistant. Twenty-four percent say retargeted ads hurt their opinion of a brand. That compares with 18 percent of millennials and 16 percent of Gen X and boomers.

Hyper-targeting was supposed to make advertising more relevant. Instead, for a growing share of consumers, it reads as surveillance. People do not reward brands that interrupt, retarget, or chase them across the internet. They reward brands that earn attention honestly, through relevance, consistency, and a clear point of view.

The 60/40 Rule: The Math Behind Brand-Led Growth

None of this means performance marketing should disappear. It means the mix is wrong.

The most cited research on this question comes from Les Binet and Peter Field. Their landmark IPA studies, still the reference point more than a decade later, found that a 60/40 split works best. Brands allocating roughly 60 percent of budget to long-term brand building and 40 percent to short-term activation saw the strongest results: greater market share, stronger pricing power, and lower acquisition costs over time.

That research holds up in the market. Companies that consistently invest in brand equity have delivered 88 percent higher returns than the S&P 500 since 2006, according to Kantar BrandZ. Against the broader MSCI World Index, the gap widens to 251 percent.

Brand building grows mental availability. It shapes perception, creates preference, and primes future action. Performance advertising grows physical availability. It captures existing demand and closes the sale. One without the other is incomplete. Too much brand, and a company becomes invisible at the moment of purchase. Too much performance, and it becomes forgettable the moment the ad stops running.

Proof in Practice

Three brands with very different starting points reached the same conclusion.

Nike spent years leaning into lifestyle positioning and heavy digital promotion, and it cost the company its premium footing. CEO Elliott Hill restructured the business around a single mandate, according to Retail Dive. Nike would “lead with sport and put the athlete at the center of everything we do.” The shift meant pulling back on the discounting that had propped up short-term sales at the brand’s expense.

Starbucks made a similar move. In his “Back to Starbucks” letter, CEO Brian Niccol recommitted the company to its identity as a coffeehouse built on craft, consistency, and community. That same fall, Starbucks scaled back the app discounts and promotions that had trained customers to wait for a deal, according to CNN Business. Two years later, the company reports it has “returned to growth, delivered positive global comps, and improved margins,” according to a company update.

Airbnb faced its reckoning earlier. When global travel stopped in 2020, the company’s performance-heavy playbook stopped working with it. Under CMO Hiroki Asai, Airbnb reallocated spend toward brand storytelling. “If you rely too heavily on performance,” Asai told Marketing Week, “you don’t have the ability to put your own message out there.” Airbnb posted record revenue of $11.1 billion in 2024, up 12 percent year over year, according to IG International.

None of these companies abandoned performance marketing. They rebalanced it, and let brand do the work of making it convert.

Measuring What Actually Matters

One reason brand building gets shortchanged is the myth that it cannot be measured. That myth is no longer true. It simply requires tracking a second set of numbers alongside the usual performance metrics.

Performance metrics, like click-through rate, cost per acquisition, return on ad spend, conversion rate, and attribution, capture short-term, transactional impact. They are essential for optimizing spend in real time, but alone they reward what is easiest to measure, not what compounds.

Brand metrics, awareness, sentiment, share of voice, customer lifetime value, and net promoter score, capture the slower signals of trust and preference. Tracked consistently, they act as leading indicators of future sales, not just a record of past campaigns.

A strategy that measures only clicks will always look more efficient than one that measures conviction. That is exactly why both belong on the same dashboard.

Applying the 60/40 Framework

Rebalancing a marketing mix does not require a blank slate. It requires a deliberate audit and a handful of disciplined moves.

1. Audit the mix. Most teams are over-indexed on bottom-funnel tactics without realizing it. Quantify the actual split between brand and activation spend before deciding what to change.
2. Recenter brand purpose. Clarify the core promise in a way that is culturally relevant, emotionally resonant, and simple enough to guide every channel.
3. Build full-funnel journeys. Map the customer path so storytelling drives awareness at the top while performance triggers convert at the bottom, under one creative platform.
4. Measure both sides. Pair ROAS and CPA with brand health metrics like awareness, NPS, and share of voice, and tie both to business outcomes.
5. Test, learn, and partner. Pilot different brand-to-performance ratios by region or product line using brand lift studies, not just performance dashboards. Work with a partner who can orchestrate both disciplines under one strategy.

The Growth Engine Marketers Can’t Afford to Ignore

The question was never whether brand or performance marketing matters more. It is how they work together. Performance marketing says, act now. Brand marketing says, come with us. Growth requires both, told through the same story, in the right proportion.

Brands that get the balance right will not just outspend competitors. They will outlast them.

Want the full data, framework, and audit checklist behind the 60/40 approach? Download Mindshape’s whitepaper, Rethinking Performance Advertising.

By David Brown

President CEO