Balancing Brand and Performance

A Strategy for Sustainable Growth in FMCG

Introduction

Senior FMCG executives across Europe are grappling with a core challenge: balancing investment in long-term brand building with short-term performance marketing. This problem is not new but has become more acute in recent years. Digital tools make it easy to measure and manage short-term tactics. As a result, many organisations have tilted too far towards performance marketing, sacrificing brand equity and future growth.

This article summarises a strategic framework designed to help leaders recalibrate their marketing investments. It presents practical actions for setting objectives, allocating budgets, and prioritising marketing activities, drawing on data, expert guidance, and examples from leading European FMCG firms.

The Risk of Overweighting Performance

Marketing teams are constantly under pressure to deliver results fast. Digital platforms offer immediate data on conversions, clicks, and sales, making short-term performance marketing—paid search, display ads, coupons—an attractive option. Yet this focus comes at a cost.

Recent data shows a significant skew towards performance budgets in the FMCG sector. In 2024, the average split among European marketers is approximately 69% to performance versus just 31% to brand. Ironically, when asked what the optimal split should be, many say a balanced 50/50. In practice, they overinvest in performance because it is easier to measure.

The problem is that performance marketing works well in the short term but delivers diminishing returns. It taps into a fixed pool of ready-to-buy customers. Once that demand is exhausted, additional investment yields little incremental sales. In contrast, brand marketing creates future demand. It builds mental availability—awareness, memory, trust—which drives loyalty and supports pricing power. In a category like FMCG, where margins are tight and competition is high, this long-term equity is crucial.

The Case for Rebalancing

There is strong evidence to support rebalancing. Researchers Les Binet and Peter Field advocate for a 60/40 split in favour of brand investment. Their work shows that brand campaigns, especially those that use emotional storytelling and reach broad audiences, are the most effective way to grow market share and profitability over time.

Mark Ritson, another respected voice in marketing strategy, has also warned against what he calls "the ROI obsession." He notes that even companies with iconic brands, like Nike, have seen the downside of cutting brand investment in favour of performance tactics. Initially, thanks to past brand equity, sales may hold up, but eventually they fall away.

There are additional reasons why a long-term view is essential. Brand campaigns make performance channels work harder. A strong brand increases the likelihood of someone clicking on a search ad or responding to a promotion. Data shows up to 30% of conversions attributed to performance spending are driven by earlier brand exposure. In other words, brand builds demand; performance captures it.

Short-term metrics can also be misleading. Sales lifts from promotions often "borrow" demand from the future—people buy now because of the deal, but then hold off buying later. This can lead to a false sense of success and encourage further overspending on tactics that don't build lasting value.

Finally, Europe’s most successful FMCG firms—Unilever, Nestlé, P&G—have grown over decades by building strong brands. In recent years, some of these firms have rediscovered the importance of that approach. Unilever, for instance, now speaks openly about the majority of its growth coming from brand building rather than performance media.

A Five-Pillar Framework

The framework outlined in the report provides a structured approach to finding the right balance. It is built on five pillars: setting objectives, using data for decision-making, allocating budgets with long-term balance, prioritising high-impact activities, and integrating brand and performance planning.

1. Clear Objectives and Balanced KPIS

Start by defining both short-term and long-term success. That means setting goals for immediate sales and brand metrics like awareness, consideration and loyalty. Ensure these KPIS are visible at the leadership level and tied to performance evaluations. Some firms, like Diageo and Unilever, closely track brand equity scores and use them in budget decisions.

2. Using Data and Tools

Marketing mix modelling (MMM) and brand tracking studies are essential. MMM helps understand which activities drive sales and over what time period. Brand tracking helps measure progress on equity and reputation. Use this data not just to prove past performance, but to simulate future scenarios—what happens if we move 10% of the budget from digital to TV? Where is the point of diminishing returns on paid search?

Be cautious with attribution models that focus only on last-click performance. They tend to undervalue brand media. Consider combining multiple tools and ensuring data is integrated into planning cycles.

WARC/Deloitte 2024 Research

3. Budget Allocation: The 60/40 Starting Point

Use the 60/40 rule as a guide, not a rigid formula. The balance will vary by category, brand maturity, and market conditions. For example, a new product might initially need a higher brand spend to build awareness. In a mature category with intense competition, protecting brand share might be more important than pushing short-term deals.

The key is to protect a baseline level of brand investment—ringfencing it if necessary—so it isn’t raided to plug quarterly sales gaps. Leaders should treat brand spending as a strategic investment, not a discretionary cost.

4. Prioritising High-Impact Activities

Not all campaigns are equal. Prioritise those that deliver strong brand or sales outcomes relative to cost. For brand building, TV and digital video remain powerful, particularly when combined with emotionally resonant content. For performance, search advertising and in-store promotions are often effective—but only when supported by brand awareness.

Kill low-impact spend, like excessive retargeting or poorly targeted social ads. Invest in creative development and content, not just media buying. Ensure campaigns have reach and relevance. One high-quality, consistent message across channels often beats a fragmented mix of tactical executions.

5. Integrated Planning

Finally, ensure brand and performance activities work together. Align messaging across channels. Schedule campaigns so that brand ads prime the market before promotional pushes. For example, run an awareness campaign ahead of a major retail promotion to improve lift. Use creative synergy—same visual assets, themes and tone—so each interaction reinforces the last.

This integration increases the total effect of your marketing spend. Firms that separate brand and performance into silos often lose this compounding benefit.

Best Practice from European Leaders

Unilever now emphasises creativity in commerce. It uses retail media not just to convert shoppers, but to reinforce brand messages. Its ads on Tesco.com or Amazon carry the same identity as its TV campaigns. Similarly, its influencer marketing supports both immediate sales and long-term trust.

P&G took a different route—cutting ineffective digital spending and reinvesting in broad-reach channels. The result: higher marketing efficiency. This shows that reach still matters, especially in mass-market categories.

Nestlé takes a portfolio view. It invests heavily in top brands to defend leadership and selectively increases spending on emerging brands to build equity. It uses ROI data to justify spending during zero-based budgeting cycles, ensuring that only effective marketing survives.

Implications for Senior Leaders

If you are leading marketing or P&L in a European FMCG business, the key message is this: long-term brand investment is not optional. It is a requirement for sustainable growth. Short-term performance marketing has a role, but it should be kept in proportion.

To act on this, consider the following next steps. First, assess your current budget split. If a brand is below 40%, you may be underinvesting. Second, ensure that your strategic plans include short-term and long-term KPIS, with clear ownership. Third, embed data tools into planning—not just to report, but to guide decisions. Finally, prioritise integration. Break down silos and align brand and performance teams behind shared objectives.

In a market where consumer loyalty is fragile, price pressure is high, and digital noise is constant, brands that maintain visibility, relevance, and trust will win. That requires discipline in allocating budgets, creativity in executing campaigns, and a commitment to measuring what really drives growth—not just what is easy to track.

References

Binet, L. & Field, P. – Effectiveness in Context / The Long and Short of It (IPA research) – on the 60/40 rule for brand vs activation.

Marketing Week (2024), Les Binet: Avoid pushing brand and performance at the same time – highlights the importance of separating objectives and balancing spend (Les Binet: Avoid pushing brand and performance at the same time).

WARC/Deloitte CMO Survey (2024) – data on budget splits shifting to ~70% short-term vs 30% long-term, vs ideal 50/50 (Performance budgets rise at expense of brand | WARC | The Feed).

Analytic Partners ROI Genome (2022) – finding that brand marketing outperforms performance 80% of the time and is essential for ROI (Brand Marketing Drives Sales, ROI and Even Performance Campaigns. Don’t Cut It! | Analytic Partners).

Marketing Week (2024), Grace Kite – Don’t blow your 2025 media budget on ‘renting’ retail media – argument that strong brand is needed to make retail media and other performance spend pay off (How will marketers manage marcom spend in 2025?).

WARC (2023), Unilever looks to creative commerce – Conny Braams on integrating brand-building into commerce channels (Unilever looks to creative commerce | WARC | The Feed).

WARC/Stephen Whiteside (2024), Mark Ritson on brand/performance debate – Nike case study (over-focus on performance hurt long-term growth) (Mark Ritson takes on the brand/performance debate | WARC).

Northern Insight Magazine (2024), Marketing Reflections – notes resurgence of brand focus, 60/40 rule attention, comments by Mark Ritson (Marketing Reflections and Expectations - Northern Insight Magazine).

McKinsey (2024), Rescuing the decade: dual agenda for consumer goods – emphasizes investing in growth (brands) while driving efficiency; historical success came from brand building (CPG industry trends in 2024: Rescuing the decade | McKinsey).

WARC (2010s), Long-term profitability: Advertising vs promotion – showing advertising correlated with market share gains, promotions not so (Long-term Profitability: Advertising versus Sales Promotion - WARC).