The budget round plays out the same way almost everywhere. Sales wants more leads for next quarter. The board asks why nobody in the market knows you. And you have one number that has to cover both. With a team of three and a budget that does not grow with the ambition, 'let's just do both' is not an answer. It is a disguised decision to do both halfway.
The choice between brand and performance is mostly an agency choice. A performance agency sees channels to optimise. A brand agency sees positioning that does not hold up. Both have a point, and both have an interest in their own answer. The question that matters to you is different: which split fits where your company stands right now, and how long can you sustain it?
Why rules of thumb only get you halfway
The best-known starting point is the 60/40 split from the work of Les Binet and Peter Field: roughly sixty percent of your budget to brand building, forty percent to activation. That is not made up, but it rests on a dataset with many large advertisers and a lot of B2C. If you close fifty deals a year in a niche market of two hundred relevant companies, different mechanics apply than for a brand reaching millions of consumers.
So use a ratio like that as a starting point for the discussion, not as a standard you have to meet. The underlying logic matters more than the number: performance harvests demand that already exists, brand makes sure there is something to harvest next year. Harvest only, and you pay more each quarter for the same return.
Four factors that determine your split
In the conversations we have, the same variables keep coming back. They say more about the right split than any benchmark.
- Awareness in your category. If buyers do not know you before they search, you pay in performance for a click you then have to convince from zero. Low awareness argues for more brand budget, not more ad budget.
- Length of the buying cycle. In a B2B subscription with a six to eighteen month cycle, only a small share of your market is in-market at any given moment. You can only reach the rest with something that sticks.
- Saturation of your performance channels. Have your costs per lead risen for three quarters while volume stayed flat? Then you are no longer buying growth, you are buying the same demand at a higher price. Extra euros there do little.
- Retention and expansion. In subscription models, much of the value sits in renewals and upsell. That is partly brand work: trust, recognition, the sense of being with the right partner. Count that value before you cut brand budget.
- Life stage. A new proposition in an existing market calls for a different split than an established player defending market share.
How to set the split in four steps
We work in four phases: foundation, direction, execution, recalibration. Not a model to fill the calendar, but a sequence that stops you from picking a split on gut feel.
- 1Foundation: put the facts on the table. Where did last year's revenue come from? What share of your inbound arrives through branded search or direct traffic? What does a customer cost now, and what do they return over the contract term? Without these numbers, any split is an opinion.
- 2Direction: state a hypothesis with a time frame. For example: 'For one year we move to 40 percent brand and 60 percent performance, because our cost per lead has risen two quarters in a row and our awareness in the target group is low.' A split without reasoning dies in the first disappointing month.
- 3Execution: separate the budgets and the yardstick. Keep brand and performance spend apart in your books and judge them over different time frames. Performance monthly, brand over two to four quarters. Measuring them together always leads to the same conclusion: brand 'does not work'.
- 4Recalibration: one moment per quarter, not per week. Look at the direction of your indicators, not at the noise. Shift no more than ten to fifteen percent at a time, so you can attribute the effect.
—Performance harvests what brand has sown. Stop sowing and you notice two quarters later — and pay for it for four.
Measuring brand without a research budget
A representative awareness study costs more than most small teams spend on brand in a year. That is no reason to measure nothing. There are signals you can track for free or close to it.
- Search volume on your brand name and on brand name plus category, month over month.
- The share of direct traffic and the share of sessions arriving without an ad.
- Win rate on new deals, and whether it rises while your channel mix stays the same.
- Deal cycle length. Shorter often means you were already known before the conversation started.
- One fixed question in every first sales call: how did you hear about us? Log the answer in your CRM. After a hundred conversations you have a picture no dashboard gives you.
What this does not give you is hard causal proof. That needs saying honestly. It does give you a direction, and that is enough to run a budget discussion on numbers instead of convictions.
When to shift — and when not to
Shift towards brand if your cost per lead is structurally rising while volume stalls, if your sales calls start with explaining who you are, or if you keep losing to a better-known party with a weaker offer. Shift towards performance if branded search is growing but you do not see it back in enquiries, if your site conversion lags badly, or if there is a concrete moment when demand peaks.
Do not shift because one month disappoints. And do not shift because a new channel sounds interesting. With a small team, fragmentation is the biggest risk: five channels done halfway return less than two done well. That holds on the brand side just as firmly as on the performance side.
From split to next week
Start small and concrete. This week, put on a single page where last year's revenue came from, split your current spend into brand and performance, and check whether that split matches the four factors above. Usually it turns out no explicit choice was ever made: the split grew out of habit and out of what was easy to justify. That is a fine starting point, as long as you make it deliberate from here. If you want to run that analysis with someone who has done it before in B2B and subscription models, that is exactly the conversation we start with at REX.digital.