Marketing

How Funded Startups Should Split Brand and Performance Spend in 2026

Abstract cover art for the article: How Funded Startups Should Split Brand and Performance Spend in 2026

Most funded startups should spend the majority of their early marketing money on performance, and still start building the brand far earlier than feels comfortable. The famous 60:40 brand-to-activation ratio comes from mature brands with years of history. It describes where you are heading, and it is a poor description of where a Series A company should begin. What the research does support, without much ambiguity, is that a company running on pure activation eventually stalls, and that the brand work you skip in year one is the work you pay for, at a premium, in year three.

The research is old enough that people assume it has expired. Its core mechanism, that most buyers are not in the market at any moment and choose brands they already remember, does not depend on any particular ad platform or attribution tool. The rest of this post covers what the evidence actually says, why it bends for young companies, and how to sequence the spend so you get pipeline now without mortgaging growth later.

What the evidence actually says

The Long and the Short of It

In 2013, Les Binet and Peter Field published The Long and the Short of It for the IPA, the UK advertising industry body. It was a meta-analysis of the IPA Effectiveness Databank covering 996 campaigns, 700 brands and 83 categories. The headline finding was a curve: the number of very large business effects peaked when roughly 40% of the budget went to sales activation and the rest to brand building. That became the 60:40 rule.

The more useful findings sit underneath the ratio. In the same analysis, direct response campaigns were more efficient over one to two years, while brand campaigns overtook them over three years and beyond. Campaigns that combined brand and activation channels doubled the ESOV efficiency of brand-only campaigns (0.6 against 0.3). Their slide on measurement said it bluntly: short-term metrics alone can be misleading.

The ratio also held up when they revisited it. Their 2018 follow-up, Effectiveness in Context, put the sweet spot at 62:38 in favor of brand building. The same report listed six factors that move the optimum, including the brand’s sector, how it is priced, how innovative it is, the life stage of the category and the size of the brand, as Campaign reported at launch. Size and life stage are exactly the variables on which a startup differs from the brands in the databank.

The B2B version

B2B founders often assume this is consumer-brand thinking that does not transfer. In 2019, the LinkedIn-funded B2B Institute commissioned Binet and Field to cut the IPA data for B2B cases. In The 5 Principles of Growth in B2B Marketing, they found the B2B optimum closer to even: around 46% brand and 54% activation. They were explicit that the sample was small, under 50 cases, and that the figure is a guiding principle and should not be followed precisely.

Two other findings from that report matter for a startup. B2B brands responded to extra share of voice almost exactly as consumer brands did, gaining about 0.7 points of market share per year for every 10 points of share of voice above their share of market (the consumer figure was 0.6). And acquisition and broad-reach strategies beat loyalty strategies, which scored zero on the report’s measure of very large business effects. The same report cites LinkedIn survey data showing only 4% of B2B marketers measured impact beyond six months, which goes a long way toward explaining why so few of them act on any of this.

The 95-5 rule

The clearest explanation of why brand spend matters in B2B came in 2021 from Professor John Dawes of the Ehrenberg-Bass Institute, in a paper for the B2B Institute. His example: companies change providers like their main bank or law firm about once every five years. That puts 20% of buyers in the market over a year, something like 5% in a given quarter, and 95% out of it.

Dawes calls the 95% a heuristic and does not present it as a precise rule. You can compute your own number from your category’s purchase cycle. A two-year cycle means about half your buyers enter the market in a year, and around 13% in any quarter. Either way, most of the people your ads reach are not buying soon, so the ads work mainly by building memory that pays out when they are. His warning to performance-only teams is direct: target only the in-market buyers and your brand is unknown to them when they search, and lesser-known brands get considered less often.

Why a startup should not copy 60:40

The databank is mostly established brands with meaningful budgets. The B2B report says as much, noting its cases tend to have relatively big budgets. A company with eighteen months of runway and a board asking about pipeline coverage is a different animal, and three things change for you.

First, you need cash-generating demand now. Brand effects compound over years, and a company that runs out of money in month fourteen never collects them. Second, your share of market is close to zero, so every dollar you spend is technically excess share of voice. The arithmetic is on your side, but it only works if the spend reaches enough of the category to register. A few thousand dollars spread across five channels registers with nobody. Third, you may not yet know who your buyer is. Brand building for the wrong audience is expensive in a way that a misfired search campaign is not, because you find out much later.

Binet and Field themselves say that in their early years, businesses can do extremely well without brand-building advertising, growing through word of mouth and a strong sales team. Their point is that this phase ends. Growth slows when the pool of easy prospects runs dry, and the companies that planned for that moment handle it better than the ones that discover it in a quarterly review.

A sequence that respects both

The splits below are working judgment rather than research findings, anchored to what the evidence says about direction. Treat them as starting positions to argue with.

Stage Rough brand share of paid budget What the brand money buys What to watch
Pre-product-market fit Close to zero in media; invest in the identity itself Positioning, a name people can say, distinctive visual assets, a site that converts Conversion rates, sales cycle length, win rate
Repeatable pipeline (often Series A to B) Roughly 20% to 35% Consistent creative in the channels your buyers already use, aimed at the whole category Branded search volume, direct traffic, aided awareness among target accounts
Paid channels plateauing Moving toward the 46:54 B2B or 60:40 consumer benchmarks Broad reach, emotional work, fame Share of search, pricing power, cost per acquisition trend

Before you have product-market fit

Spend almost nothing on brand media. Spend real time and some money on the brand itself: a clear position, a name that survives being said aloud on a call, and a visual system distinctive enough that people recognize it without the logo. Distinctive assets are what memory attaches to. Generic ones give later brand spend nothing to build on, and they make your performance ads interchangeable with a competitor’s. This is also the cheapest moment you will ever have to get the identity right. Changing it after Series B means changing it across the product and every sales deck in circulation.

Once pipeline is repeatable

Start a steady brand line and protect it from quarterly cuts. The Binet and Field data on integration argues for running brand and activation together, with shared creative codes, so activation cashes in the memory the brand work builds. Aim the brand work at the whole buying committee in your category, including people who are not in market. The B2B report suggests thinking about people whose careers will put them in a buying role soon, which for many startups means the managers who will be directors in two years.

Consistency beats volume here. Dawes points out that building mental availability is a multi-year task, and that many well-established brands reach no more than 20% to 30% of respondents linking them to a buying situation. A startup that changes its message every quarter resets that clock each time.

When paid channels start to plateau

This is the inflection the research describes. Cost per acquisition rises and the sales team says the leads feel colder. The instinct is to cut brand and pour money into the channels that used to work. The evidence says the opposite: this is the point to move toward the benchmark ratios, because the in-market pool you have been harvesting is small and mostly already reached.

Measuring it without fooling yourself

Brand spend fails the attribution test by design. Its effects arrive months later, through channels that will claim the credit, usually branded search and direct. If your only dashboard is last-click, brand will always look like waste and you will always cut it.

Set up a few slower measures before you spend. Track branded search volume against competitors, direct and organic traffic, and win rates on deals where the buyer had heard of you before the first call. Ask sales to log how inbound prospects first encountered the company. Where budget allows, run geographic or account-based holdout tests. Agree with your board in advance on the time horizon, because the IPA data suggests brand payback shows up over years, and a six-month review will kill it before it has a chance to work.

When this advice does not apply

If your category has a very short purchase cycle and buyers search with clear intent, performance can carry you further before it plateaus. If you sell to a market of a few hundred named accounts, account-based sales and events may do the job brand advertising does elsewhere, although the logic of reaching buyers before they are in market still holds. If you have less than a year of runway, survive first. And if your product does not yet retain customers, no amount of brand will fix it; spend the money on the product.

The reverse case matters too. Heavily funded companies sometimes buy brand campaigns before they have a position worth amplifying. Spending at the 60:40 ratio does not help much if the message is interchangeable with three competitors.

A next step for this quarter

Work out your category’s purchase cycle and calculate what share of your buyers are in market in a given quarter. Put that number in front of the leadership team next to your current brand spend. Then pick one brand measure, most likely branded search volume or aided awareness among target accounts, record its level today, and commit to reviewing it after twelve months, not three. That single decision on time horizon does more for the brand-versus-performance debate than any ratio.

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