This is a 4-part written series exploring Brandformance and how it can become the propulsion engine for your business’s growth and longevity.
Every business on the planet wants to grow, whether by generating a higher volume of transactions or by generating business with better quality financial returns. This brings up the million-dollar question: “How can we sell more?”
At this exact moment, a silent malaise is circulating the corridors of companies, especially high-growth ones. This malaise doesn’t immediately show up in the month’s results or the annual balance sheet, but it screams in meetings where teams sit down to analyze the conversion funnel.
The problem is usually first perceived by marketing and growth teams, who understand well the difference between renting and retaining audience attention. The former (i.e., “attention rental”), while neither spoken nor known in corporate corridors, has very much underpinned the standard growth model of recent decades.
That growth model is now collapsing, placing even more pressure on the teams responsible for revenue generation.
The illusion of ROAS and the “Holy Grail”
The last decade was marked by the “grow at any cost” mindset. Executives and founders were seduced by a metric that promised total control over the company’s destiny: return on ad spend (ROAS). Easy to understand and justify, the premise seemed to be the new Holy Grail with a simple equation: for every dollar invested, there should be two in return. Meta and Google showed dashboards on their panels that looked like perfect compasses. At any sign of deviation, a segmentation adjustment or creative swap was enough for growth to continue.
I lived this story. Everything seemed so easy, simple, and precise that it caused seasoned marketers discomfort. But, for senior leadership and investors, this seemed to be the perfect scenario. It suggested that the customer acquisition cost (CAC) was under control via paid media—even when cutting media seemed to be the only solution to reduce CAC.
Investing in “awareness” campaigns was the forbidden topic in these moments. Investing in brand building, reputation reinforcement, and remembrance? It was a foreign dialect.
The awakening brought on by digital maturity
But digital maturity arrived, and the macroeconomic scenario changed. What we’re witnessing now is the saturation of this model and a growing anguish. (Let’s name the emotion for what it is!)
What seemed certain and guaranteed suddenly became uncertain and unstable. But the writing was already on the wall.
In the aftermath, those skeptical and experienced specialists have finally had the space to be heard. Since 2020, the cost of attention acquisition has inflated. Algorithms have never been so saturated. Everywhere we look we see strangled sales funnels.
Companies that neglected the construction of proprietary brand assets are discovering that they never owned their customers. They were merely tenants of an audience that is today bombarded from all sides. As they say: attention is the new oil, and it’s a vanishing resource.
But what’s the alternative?
This is the first article in a series that prompts us to better reflect on the value of a mindset focused entirely on performance. It presents Brandformance as a financial protection system for businesses that wish to prosper in the next decade. It’s an invitation to remember that brands that support awareness building will always win, in the long term, the marathon that is producing wealth.
Why think of simple interest when you can enjoy compound interest?
Marketing isn’t an isolated discipline; it works in partnership with other departments. But the economic impact a business experiences is born in marketing. Therefore, to understand the long-term inefficiency of performance, we need to invite microeconomics into this reflection.
Every market has low-hanging fruit—potential buyers who are already aware of their need to buy. This is where performance marketing operates. With each new campaign, the brand captures existing demand (in-market audience), which practically generates a low CAC and high conversion. This is where the illusion holds firm.
The problem is that low-hanging fruit isn’t scalable. As the brand only uses this criterion to define sales increase, it exhausts this bottom-of-the-funnel audience, creating an ever-larger gap.
What’s worse, it stops investing in the education and engagement of potential buyers who are not yet ready for the spend. It leaves them out in the cold.
When this happens, the performance equation breaks: the click-through rate (CTR) drops, the cost per click (CPC) rises, and the conversion rate plummets. Pressured growth teams attempt shortcuts, tactical improvements such as creative optimization, new channels, automation. But without solving the structural issue, the vicious cycle continues.
The central issue? While it can capture existing demand, performance marketing cannot create new demand.
A growth strategy can’t depend only on Instagram ads. It needs to be holistic. As paradoxical as it may seem, performance is a consequence, not a cause. The more known and recognized a brand is, the more revenue it harvests.
Theory in practice: Follow the 60/40 rule
The precursors of modern advertising, Les Binet and Peter Field, have already warned about this with empirical data from the Institute of Practitioners in Advertising. The “60/40 Rule” suggests that, for sustainable growth, about 60% of the budget should go to brand building (long term) and 40% to sales activation (short term).
Although startups are pressured by the runway, what I see is a dangerous inversion: 90% performance and 10% brand (usually a mandatory check disguised as “Corporate Ads”).
Binet and Field demonstrate that leveraging performance marketing to activate sales generates immediate revenue peaks that immediately turn into valleys when the investment stops. Why? Because performance doesn’t build memory. Brand building, on the other hand, creates an ascending demand curve. It may be medium- or long-term growth, but it’s what produces the benefits of compound interest.
Every brand will reap the future it builds today.
By opting for total focus on performance, companies operate without this foundation, forcing themselves to “buy” each sale, daily, from scratch. This compresses their margins and increases their risks of reduced customer lifetime value (LTV) and increased churn.
One thing is certain: every brand will reap the future it builds today. If the focus is entirely on performance, it will live in rented accommodation forever. If it strikes the right balance, it will build a beautiful home of its own.
Brandformance: The fusion of efficiency with effectiveness
The corporate world created an artificial wall between branding (seen as art, expense, intangible) and performance (seen as science, investment, control). Brandformance demolishes that wall.
It’s the management methodology that uses brand value construction as the main driver of performance efficiency and shifts the function of the brand to being economic rather than aesthetic. There are two key principles of brandformance:
- Mental availability (Byron Sharp)—the brand ensures it’s remembered when customers are in a buying situation.
- Friction reduction—the brand ensures that, when customers find themselves at the receiving end of performance marketing, they trust the brand enough to click.
The equation is simple: A strong brand commands a higher CTR plus a higher conversion rate, resulting in a lower CAC. A weak brand commands a lower CTR plus a lower conversion, resulting in a higher CAC.
Investing in brand isn’t “taking money away from performance.” It’s subsidizing its future efficiency. It’s building equity—brand equity, to be specific. Which means that brandformance isn’t a buzzword; it’s the passing of the baton that makes the relay race between marketing, sales, and customer service winnable.
How to measure brandformance
The biggest barrier to adopting a brandformance approach has always been measurement. For this, we need to look at metrics that correlate brand health with financial health:
- Share of search—the volume of organic searches for your brand is an indicator of future demand. If you increase your performance investment and your share of search stagnates, then you’re buying sales, not creating demand.
- Organic CAC—observe the cost of acquisition filtered by organic delivery. The brand’s objective is to ensure that the percentage of sales that arrive without a paid click grows over time.
- Price sensitivity—strong brands have price inelasticity. The ability to increase margin without losing market share is one of the biggest returns of branding.
Building legacy is what a strong brand does.
We’re entering a new era of corporate sobriety. Growth at any cost has been replaced by the demand for efficient growth.
In this new scenario, the brand ceases to be the “colors department” and assumes its place as the main human and intellectual capital asset of the company. Brandformance is the sophistication of our thinking and metrics. It’s an opportunity to stop evaluating our results by yesterday’s ROAS and start looking at tomorrow’s equity.
During your next strategic planning session, ask yourself: Do I want to continue being a tenant in the large ecosystem of brands, paying rent that goes up every year? Or do I want to start building our brand’s own territory in the minds of its customers?
Cover image: Mihaela