Amidst mounting trade disputes, shifting tariff policies, and a consumer base that’s worried about the future and pulling back on spending, marketing budgets are projected to remain flat this year. And as those budgets come under increased scrutiny, marketing leaders will once again come face to face with that age old conundrum: How to allocate spending between brand awareness and performance.
As marketers rethink their media budgets (and consider how to justify them to stakeholders), the ideal balance between brand and performance often gives way to performance-centric spending that favors short-term gains. But when brand building is sidelined for too long, it can weaken overall performance—in both the short and long-term. By adopting a more integrated “brandformance” approach, marketers can significantly amplify their impact and maximize their ROAS.
Here are six considerations marketing leaders should keep in mind as they strategize around their brand and performance media investments amidst economic volatility:
Marketing leaders have indicated that, ideally, they’d split their budgets equally between long-term brand building and short-term brand performance. Of course, this is a general rule rather than a universal one. “There’s not a one-size-fits-all approach to brand versus performance investment that fits every single type of business,” notes Dan Wilson, Group VP of Integrated Client Solutions at Basis.
But despite widespread agreement on the value of balance, budgets continue to lean heavily toward performance: In 2024, 69% of marketing budgets were allocated to short-term brand performance, while just 31% went to long-term brand building (compared to a 60/40 split in 2023).
With marketing budgets disproportionately favoring performance even before economic volatility took hold, increased pressure to prove out ROI amidst economic concerns threatens to further disrupt the balance.
Advertisers tend to focus more on performance marketing during times of economic volatility because it offers fast, measurable results. “When revenue is down, performance marketing can help brands to quickly dial it back up,” says Wilson.
Performance marketing also often provides marketers with stronger footing for justifying budgets to stakeholders. “When consumers pull back on spending, budgets are questioned more,” says Kelly Boyle, Group VP of Strategic Business Outcomes at Basis. “In this context, the measurability and short-term wins offered by performance marketing channels make it easier for marketers to justify their spend.”
But just because performance spend is easier to justify doesn’t make it more impactful than brand building. In fact, attribution-based measurement has been shown to overestimate the impact of lower-funnel channels, giving marketers a skewed view of the impact of their spend.
At the same time, effective branding and revenue are “intrinsically linked”—when brand awareness efforts are decreased, revenue inevitably takes a hit.
It’s understandable for brands to focus more on performance when consumers pull back on spending for extended periods of time. However, marketers will likely see that performance suffer when they move away from brand building for more than a few months. “If a brand is only focusing on capitalizing on existing demand without generating demand via brand awareness,” says Boyle, “existing demand is eventually going to run out.”
Beyond balancing media spending between brand and performance, economic volatility can provide key opportunities for brands to capture new levels of visibility and brand affinity amidst broader slowdowns.
“If all your competitors are pulling back spend, maintaining your brand awareness efforts can be an easy way to build up your share of voice without having to spend incrementally,” says Boyle.
Underlying all of these considerations is the fact that treating brand awareness and performance as disparate approaches to marketing is an industry-wide problem that negatively impacts marketers’ ability to drive impact. Balancing the two with an integrated approach has been shown to increase revenue returns by a median of 90%. Conversely, overinvesting in performance can actually decrease revenue returns by 20% to 50%.
To drive revenue effectively and sustainably, advertisers must approach brand -building and performance as interdependent, integrated aspects of their core strategy—even during times when budgets are tight.
As marketing budgets are scrutinized by stakeholders during economic upheaval, reporting becomes an even more critical tool for guiding strategic spend and proving value.
“Measurement across channels and across objectives is a complex task,” says Wilson. “It’s important for advertisers to find the tools that allow them to successfully measure the impact of their investments.”
Robust, comprehensive data and reporting frameworks can help marketing teams clearly demonstrate the impact of their media investments—and craft the compelling, unified stories that are key to earning stakeholder buy-in.
While economic uncertainty and tighter consumer spending may prompt a shift towards performance marketing as stakeholders demand clear ROI, overlooking brand-building for too long is likely to undermine performance. At the same time, advertising leaders aiming for long-term, sustainable growth must treat brand and performance as complementary forces working toward the same goal—regardless of economic conditions.
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Looking for more strategic insights around adapting to economic uncertainty? Check out Tariffs, Cutbacks, and Economic Volatility: 5 Ways Advertising Leaders Can Stay Ahead in 2025 for five essential moves leaders should be making now.
