What you'll learn
How to decide the right split between brand (long-term demand creation) and performance (short-term demand capture), measure it with the right metrics, avoid common traps, and communicate a defendable plan.
Why this matters
- Quarterly planning: propose how much budget goes to brand vs performance.
- Channel mix: choose where to increase or cut spend without killing future demand.
- Reporting: explain rising CAC or flat ROAS and how brand investment stabilizes it.
- Experiments: design simple tests to prove incrementality.
Concept explained simply
Brand marketing makes more people want you later. Performance marketing helps ready buyers convert now.
- Brand: reach, memory, preference. Metrics: reach, ad recall, aided awareness, share of voice (SOV), share of search, direct traffic, branded search.
- Performance: targeting, intent capture, conversion. Metrics: CAC, CPA, ROAS, MER (total revenue / total ad spend), conversion rate, LTV:CAC.
Mental model: reservoir and tap
Brand fills the reservoir with future demand. Performance opens the tap to capture it. If you only open the tap (performance) and never fill the reservoir (brand), the flow dries up and CAC rises. If you only fill the reservoir, you miss near-term revenue.
How to set your split (step-by-step)
- Define goals and time horizon: revenue target, profitability limits (e.g., min ROAS or max CAC), and growth priorities.
- Estimate base demand: expected organic and repeat revenue without paid growth.
- Map diminishing returns: identify performance spend levels where ROAS/CAC worsen sharply.
- Choose brand objective: maintain or grow future demand (e.g., aim SOV ≥ SOM to gain share).
- Draft split scenarios: performance-heavy for short-term gaps; brand-heavy to build the next quarters.
- Set KPIs: performance (CAC, ROAS, MER) and brand (reach, share of search, branded search, ad recall).
- Review risk: seasonality, cash constraints, and ramp times (brand effects often need 6–12 weeks+).
Useful starting points (adjust to your context)
- Early-stage or aggressive target: 70–80% performance, 20–30% brand.
- Stable growth: 60/40 or 50/50 (brand/performance).
- Long sales cycles or low purchase frequency: skew more toward brand.
These are heuristics, not rules. Validate with your data.
Worked examples
Example 1: DTC apparel, need fast revenue
Goal: +$200k revenue this month. Base demand: $250k. Performance ROAS: 3.5 at $100k, 2.5 at $200k, 1.8 at $300k. Brand lift is slow (branded search reacts in ~8–12 weeks).
- Plan: prioritize performance now to close the gap. Spend $180k performance (expected blended ROAS ≈ 2.7–3.0 across the curve) and $40k brand to keep future demand from eroding.
- Split: ~18% brand / 82% performance.
- KPIs: CAC at or below target; monitor direct and branded search as leading indicators.
Example 2: B2B SaaS, 90-day cycle
Goal: pipeline for next quarter with CAC discipline. Performance (search, retargeting) saturates quickly; ROAS flattens beyond $120k.
- Plan: 50% brand (video, content amplification, thought leadership), 50% performance (high-intent search, demos).
- Reason: long consideration period; brand warms the market now for performance to convert later.
- KPIs: SQLs from high-intent keywords, direct/demo requests, brand search volume, LTV:CAC trend.
Example 3: Regional launch
Goal: capture mindshare in two cities over 3 months. Need reach and memory quickly.
- Plan: 65% brand (high-reach video, OOH-equivalents, broad social), 35% performance (search, store visits, promo capture).
- KPI: reach and frequency, store visits, share of search in target cities, branded queries.
Measurement that actually works
- Short term: blended CAC, MER, last-click and data-driven ROAS with diminishing returns curves.
- Medium term: leading indicators — direct traffic trend, branded search, share of search, repeat rate.
- Incrementality: geo split or holdout tests for brand, audience holdouts for retargeting.
- Attribution sanity checks: compare platform-reported ROAS vs blended MER; use experiments to resolve conflicts.
Simple geo test blueprint
- Select 2–4 matched regions.
- Increase brand spend in test regions only.
- Hold performance budgets flat across all regions.
- Track 6–12 weeks: branded search, direct traffic, organic conversions, and assisted conversions.
- Compare deltas vs control; compute incremental revenue per brand dollar.
Choosing metrics
- Brand: reach, frequency, ad recall, aided awareness, share of voice, share of search, branded search volume, direct traffic.
- Performance: CAC, CPA, ROAS, MER, conversion rate, LTV:CAC, lead-to-close rate.
Common mistakes and self-check
- Cutting brand spend first: short-term ROAS may look better but CAC climbs over time. Self-check: is branded search or direct traffic falling?
- Chasing platform ROAS only: ignores blended MER and saturation. Self-check: does total revenue grow with spend?
- Assuming brand equals vanity: brand drives future performance efficiency. Self-check: when brand spend paused, did future CAC rise?
- Ignoring ramp time: brand needs weeks. Self-check: are you evaluating brand within days?
Practice exercises
Do the exercise below. The quick test is available to everyone; only logged-in users get saved progress.
Exercise 1 (mirrors the graded task):
You have a monthly budget of $220k for a DTC brand. Current base demand is $250k/month. At $150k performance spend, blended ROAS is ~2.6; pushing to $200k drops to ~2.2. Prior small brand bursts lifted branded search by ~12% over 8–10 weeks. Propose a brand vs performance split for Month 1, list 3–5 KPIs, and write a 3–4 sentence rationale.
You have a monthly budget of $220k for a DTC brand. Current base demand is $250k/month. At $150k performance spend, blended ROAS is ~2.6; pushing to $200k drops to ~2.2. Prior small brand bursts lifted branded search by ~12% over 8–10 weeks. Propose a brand vs performance split for Month 1, list 3–5 KPIs, and write a 3–4 sentence rationale.
- Checklist: quantify the revenue gap, note diminishing returns, allocate enough brand to protect future demand, list KPIs for both streams, add a risk note and mitigation.
Mini challenge
Pick one channel you consider “brand” and redesign it to serve a measurable performance goal without losing reach. For example: add geo lift measurement, unique offer codes, and frequency caps. Write 5 bullet points and one testable hypothesis.
Practical projects
- Build a diminishing returns curve: plot spend vs ROAS for the last 12 weeks and mark the knee point.
- Create a brand leading-indicator dashboard: branded search, share of search, direct traffic, and aided recall survey results.
- Design a 2-region geo lift test plan for brand video with metrics, sample sizes, and a 10-week timeline.
Who this is for
- Marketing analysts and channel owners planning budgets or explaining CAC/ROAS trends.
- Growth and brand marketers aligning on near-term targets and long-term equity.
Prerequisites
- Comfort with basic channel metrics (CAC, ROAS, MER, conversion rate).
- Ability to read time-series trends and compare regions or cohorts.
Learning path
- 1) Core channel metrics refresh
- 2) Brand vs performance split (this lesson)
- 3) Incrementality testing (geo and audience)
- 4) Attribution sanity checks and MMM basics
Next steps
- Complete Exercise 1 and save your notes.
- Take the Quick Test to check understanding.
- Draft a 1-page recommendation for your current company or a sample brand.