Brand or Performance? How to Split a Local Ad Budget

Article · By Launch Point · Media

Every local business eventually asks the same two budget questions. How much should we spend? And how much of it should go to the ads that ask for the sale right now?

The second question is where most money gets lost.

The pull toward the short term is measurable

This isn’t a hunch. In The CMO Survey’s spring 2026 edition, 70.6% of marketers said pressure to prove marketing’s value pushed them to focus on short-term impact over long-run gains ^[1].

You can see why. Performance ads report back. Brand ads don’t hand you a tidy number on Monday morning. So budget drifts toward whatever the dashboard can measure, and the dashboard measures clicks.

Here’s the problem with that logic: the dashboard is wrong about its own importance. Analytic Partners found that last-click and similar attribution overstate the role of clickable activity by two to ten times, and that roughly 30% of paid search performance is actually driven by brand and upper-funnel marketing ^[2]. Your search campaign is taking credit for demand your other advertising created.

What the split should look like

The most durable answer comes from Les Binet and Peter Field, who analyzed the IPA’s databank of campaign results. Their finding was a roughly 60/40 split between brand building and short-term activation. When they re-tested it in 2018, it came out at 62/38 ^[3].

That research is UK-based and skews to larger brands, so treat it as a compass, not a prescription. But the direction is confirmed elsewhere. Analytic Partners reports brand marketing outperforms performance marketing 80% of the time, that upper-funnel tactics are 60% more effective over the long term, and that they’re only 25% less effective in the short term ^[2]. Their recommendation is blunt: no less than half the budget to brand ^[2].

The bigger prize isn’t the ratio. It’s the integration. WARC’s Multiplier Effect research found that moving from a performance-heavy approach to a balanced one can lift total revenue return from advertising by 25% to 100%, with the best results when brand and performance are planned together rather than run by separate teams ^[4].

The cost of going quiet

If you need one number to settle an argument about cutting the ad budget, use this one.

Researchers at the Ehrenberg-Bass Institute tracked 365 US consumer brands that stopped advertising. On average, market share fell about 10% after one year, 20% after two and 28% after three ^[5]. Smaller brands and already-declining brands slid faster.

Going dark is not a pause. It’s a slow, compounding withdrawal from a memory account you spent years funding.

So how much should you spend?

There’s no universal percentage, and anyone who gives you one without asking about your margins is guessing. But two reference points help.

The CMO Survey puts marketing at a median of 5% of company revenue, with a mean of about 9% pulled up by big spenders ^[1]. And at the local end, LocaliQ’s 2026 survey of small business owners found 52% have monthly marketing budgets under $1,000 ^[6].

A more useful way to get to a number:

1. Start with the goal. How many new customers do you need in the next 12 months?
2. Know what one is worth. Average first purchase, plus what they spend over the relationship.
3. Work backward. What can you afford to pay to acquire one and still make money?
4. Check it against reach. Does that budget buy enough frequency against the right households to be remembered? If not, narrow the audience rather than thinning the spend.
5. Then split it. Fund brand at roughly half or better, keep performance funded enough to catch the demand brand creates, and hold a small test budget.

The practical version

Fund the ads that make people know you, and fund the ads that make it easy to buy from you. Judge them together, on total leads, calls, booked jobs and branded search, not on which one got the last click.

That’s how a local budget stops being a monthly argument and starts compounding.

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Want a second opinion on your split? Schedule a Conversation with the Launch Point media team, or read the full Local Media Playbook.

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Sources

1. The CMO Survey (Duke Fuqua, Deloitte and the AMA), Spring 2026, 35th edition, fielded January 2026. https://cmosurvey.org/wp-content/uploads/2026/04/The_CMO_Survey-Highlights_and_Insights_Report-2026.pdf
2. Analytic Partners, ROI Genome (updated July 2025). https://analyticpartners.com/knowledge-hub/roi-genome/brand-marketing-drives-sales-roi-and-even-performance-campaigns-dont-cut-it/
3. IPA, on Les Binet and Peter Field's The Long and the Short of It (2013) and Effectiveness in Context (2018), Sept. 13, 2023. https://ipa.co.uk/knowledge/ipa-blog/the-next-chapter-for-the-long-and-the-short-of-it
4. WARC, The Multiplier Effect, Jan. 24, 2025. https://www.warc.com/en/analysis/in-focus/the-multiplier-effect
5. Phua, Hartnett, Beal, Kennedy and Trinh (Ehrenberg-Bass Institute), When Brands Go Dark: A Replication and Extension, Journal of Advertising Research, 2023. https://thearf.org/access-knowledge-2/publications/journal-of-advertising-research/when-brands-go-dark-a-replication-and-extension-examining-market-share-of-brands-that-stop-advertising-for-a-year-or-longer/
6. LocaliQ, The Big Small Business Marketing Trends Report for 2026, Feb. 2026. https://localiq.com/blog/small-business-marketing-trends-report-2026/