Brandformance: How to Split the Budget Between Sales Today and Brand for Tomorrow

Most small companies invest in advertising based on the principle of "what will pay off faster." Money goes into search ads and retargeting because results are visible as early as tomorrow. The logic is understandable — but over time, this exact approach drives the business into a dead end.

Why Pure Performance is a Trap

Performance advertising does not create demand; it captures existing demand — those who are already looking for a solution. When you exhaust this limited audience, each subsequent customer costs more: auction bids rise, return on ad spend (ROAS) drops, and you endlessly change creatives without any return. This phenomenon is called the "performance ceiling."

According to the WARC study "The Multiplier Effect," over-investing purely in performance reduces the overall return on advertising by 20–50%. A business overpays for the same narrow audience without having anything to distinguish it from competitors.

Brand as a Multiplier, Not a Logo Expense

The main conclusion of the same study is that brand and performance do not work by the formula "brand + performance," but rather "brand × performance." A strong brand makes every performance campaign more effective. Companies that transitioned from pure performance to a hybrid approach recorded a median return (ROI) growth of 90%.

There is also a clear explanation. Analytic Partners found that about 30% of clicks in paid search are actually triggered by other brand activities: a person saw you elsewhere and then entered a search query. Last-click attribution fails to see this and underestimates the brand. The key condition: for the multiplier to work, at least 30% of the marketing budget must go toward brand building.

How Much to Allocate: An Adaptive Model for Small Businesses

The classic rule by Les Binet and Peter Field suggests 60% for brand and 40% for sales. But this is a benchmark for mature companies, not a dogma for everyone. It is wiser for a small business to move in phases:

Good news for smaller players: to grow, a small brand just needs to invest slightly above the category average. According to Binet and Field, every 10 points of "excess share of voice" (ESOV — when you are heard louder than your market share) yields about a 0.5% increase in market share per year.

How to Measure a Brand Without a Research Budget

The biggest barrier for SMEs is the perception that brand effect is impossible to measure. In reality, there are simple and free tools available.

The first is Share of Search: the ratio of branded searches for you compared to searches for your competitors. It can be tracked via Google Trends, and it often leads changes in market share by months. The second is a single question on the post-purchase thank-you page: "How did you hear about us?". The customers' own answers are more accurate than automated attribution and reveal channels that build interest but remain invisible in reports. The third indicator is the growth of direct traffic: when people arrive by typing the company name rather than clicking an ad, the brand is working.

Why the Brand is Cut First During a Crisis — and Why It's a Mistake

The instinct during a downturn is to slash everything that doesn't yield immediate results, meaning the brand. Historically, this is a losing strategy: despite the ongoing war, Ukraine's advertising market grew by 12–13% in 2025, reaching 33.4 billion UAH, and those who remained visible gained the most.

A prime example is Airbnb. During the pandemic, the company practically cut its performance budget to zero, yet traffic barely dropped: the brand was already strong. Today, about 90% of its visitors come directly, without paid advertising. Performance is a laser: precise but narrow. Brand is the light that fills the entire room.

Conclusion

Brandformance is not a choice between branding and sales, but rather their conscious proportion that evolves alongside the business. For a small company, the main thing is not to sink the entire budget into instant payback, but also not to leave the brand completely ignored. Balancing these two horizons within a single media planning framework, where brand and performance channels reinforce each other, is a separate, systematic task — and this is exactly what the online advertising services by MAS Agency are built upon.

Sources: WARC "The Multiplier Effect" (2025); Les Binet and Peter Field, IPA data; Analytic Partners (ROI Genome); All-Ukrainian Advertising Coalition (2025 results); Airbnb financial reports for 2022.