From Growth at Any Cost to Profitability
The context for marketing has changed. For a decade, startups could lean on performance ads and cheap capital to chase growth at any cost. That era is gone. Investors now demand profitable growth.
Performance marketing still matters, but every team eventually faces the same plateau. CAC rises, ROAS flattens, and incremental spend produces diminishing returns. Boards ask the same question: where does growth come from next?
The answer is brand marketing. Not because it’s easy, but because it’s the only lever that compounds performance efficiency over time. Strong brands see lower acquisition costs, higher conversion at the same spend, and more pricing power.
The Limits of Paid Brand Ads
Here’s the uncomfortable truth: few breakout brands of the last decade went to the next level purely because of paid brand advertising.
Warby Parker scaled through its free try-on program and retail footprint before layering on broad brand ads.
Peloton built network effects and a cult-like instructor community, then amplified with TV.
Glossier grew from community and UGC long before running heavy brand campaigns.
Dove’s Real Beauty campaign sustained equity for a global incumbent — it didn’t create it.
Paid brand ads rarely create breakout scale. They can reinforce and sustain a position, but without product-market fit, community, or distribution advantages, they risk becoming expensive noise.
That’s why measurement matters. If leadership can’t distinguish compounding effects from waste, brand spend is the first budget cut.
Defining Brand vs. Performance Spend
The first problem is definitional. Too often, “brand” and “performance” blur into one bucket — leading to misattribution and misaligned expectations.
We separate them by six criteria:
Optimization goal: reach vs. conversion.
Channels: TV, OOH, podcasts, sponsorships vs. paid social, search, affiliates.
Creative style: emotional stories vs. rational benefits.
Product strategy: broad lifestyle vs. specific SKUs.
Campaign duration: months-long drumbeats vs. weeks-long bursts.
Audience targeting: broad reach vs. efficiency segments.
Without this line, brand campaigns get held to performance dashboards and killed too early.
Why Brand Is Different (and Higher Risk)
Brand campaigns operate on a different curve — and carry more risk:
Different Payback Curve: Performance ads can be judged in days. Brand ads need 6–12 months.
Different Creative Standard: Performance assets can be refreshed frequently. Brand assets must be memorable enough to endure a year.
Different Risk Profile: Performance spend can be dialed up or down. Brand buys (TV, OOH) lock you in.
These differences explain why so few teams succeed with brand ads — and why a disciplined system is needed.
Our Measurement Playbook for Brand
To evaluate brand on its own terms, we use a layered framework:
1. Clear Definitions
Classify brand vs. performance spend upfront using the six criteria above.
This prevents muddied CAC/ROAS debates.
2. Creative Confidence
Pre-launch: focus groups or surveys to test resonance.
Post-launch: ad recall surveys to confirm whether campaigns are memorable and tied to the brand.
If the creative doesn’t land, no amount of spend or measurement will save it.
3. Leading Indicators (0–3 months)
Impressions and earned media value.
Branded search volume and share of search.
Direct traffic lift.
Organic buzz and mentions.
4. Long-Term Outcomes (6–12 months)
Aided awareness.
Trait and perception shifts (e.g. “timeless,” “craftsmanship”).
Blended CAC and ROAS — assessed on a quarterly, not monthly, basis.
Marketing as % of revenue, to maintain profitability discipline.
5. Tie-Back to Growth
Use MMM and geo-tests as causal anchors.
Layer on first-party user journeys to see how brand lift translates into conversions and quality shifts.
Creative Confidence Still Matters
Even the best framework won’t rescue bad creative. Emotion-led campaigns need to be distinct, memorable, and perception-shifting. And because brand requires a year-long drumbeat, you must trust the asset enough to commit for 12 months.
Les Binet and Peter Field’s Media in Focus reminds us: brand effects compound slowly but deliver the largest gains. Byron Sharp’s How Brands Grow shows that mental availability — being remembered at the moment of choice — is the real driver. And Kantar’s research highlights that being seen as different is the single most important contributor to brand returns.
Together, these sources reinforce the same point: brand campaigns only work if you stick with them long enough, and if the creative is strong enough to shift memory and perception.
The Takeaway
Brand marketing is no longer optional. It’s the lever when performance maxes out, and the only way to lower blended CAC and strengthen pricing power over time. But it needs its own rules:
Clear definitions to separate brand from performance.
Leading indicators for early confidence.
Long-term outcomes measured over 6–12 months.
Creative confidence as the gate before spend.
Without this framework, brand ads risk becoming expensive noise. With it, they can compound performance efficiency and drive profitable growth.
If your leadership still expects brand spend to prove itself in four weeks, the campaign isn’t set up to succeed. The real question isn’t should we invest in brand? — it’s do we have the system to measure it on its own terms?
References
Marketing Metrics: The Definitive Guide to Measuring Marketing Performance
Byron Sharp How Brands Grow + Part 2
Counter argument to Byron Sharp
Reshaping the marketing and market research scene: Byron Sharp’s “How Brands Grow”
Being seen as different is the most important factor for brand returns
Media in Focus. Les Binet, Peter Field
Kantar: Reviewing the Top 10 Drivers of Advertising Profitability
Balancing Short and Long-Term Marketing Strategies. Les Binet. Peter Field.
NCS Consumer Sentiment Survey: 5 Keys to Advertising Effectiveness
Recast: The Brand-Direct Response Spectrum: Why All Marketing Should Be Performance Marketing
What is performance marketing?
The uncomfortable tension between brand and performance marketing on mobile
Brand Key Model, Graham Robertson
