Brand is profitable once more. Or, why your CFO should defend the brand budget?

For a decade, marketing has been measured by whatever was fastest or simplest. Clicks, leads, customer acquisition costs, the week's ROAS... everything that fit on a dashboard on Monday morning. And what did not fit (the brand) has often been treated as an image expense, a luxury for large companies with budget to spare.

That idea for some of what a brand is seems to be finally crumbling. Not out of nostalgia, but because the numbers demand it.

Before moving on, a definition so we do not lose our thread. Brand equity is the value that your brand has on its own. What your name sells without you having to open your mouth. It is the difference between a customer looking for you and you having to go and look for them, paying along the way. That value is back on the board of directors' table because the brand is what sustains your sales when you turn off the advertising. And that, now that acquiring new customers is undisputedly more expensive every year, is no longer a marketing debate. It is a bottom-line debate.

The brand is what sells when you are not selling

There are two types of sales in any business. Those you generate today with a promotion, an ad, an email or a salesperson. And those that happen without you doing anything specific on that day, because someone already had you in mind when the need arose.

The latter are what distinguish a company that is truly growing from one that lives day-to-day, waiting for the next campaign to make ends meet.

Brand equity is, in practical terms, the size of that growth. The Ehrenberg-Bass Institute, one of the centres that has most studied how brands grow, summarises it in two very concrete things: mental availability and physical availability. Mental availability is the ease with which your brand comes to the buyer's mind just as the need arises. Physical availability is how easy it is to find and buy from you. When both go up, the sales base goes up with them. And it stays there, year after year, even if the team dedicated to customer acquisition has a bad quarter.

Let us use Apple as an example to understand this better. As of June 2026, the brand is valued on the stock market at around $4,400,000 million (4.4 trillion in US/UK terms), but its factories, equipment and stores (the physical assets) add up to barely about 50,000 million: 1% of what the company is worth. And the brand alone? Interbrand values it at 470,900 million and Brand Finance, even higher in its Global 500 2026. The name "Apple" is worth, on its own, about ten times more than all its factories combined. Between 11% and 14% of everything the company is worth is, quite simply, an idea we call a brand.

There is a second effect, less visible but equally profitable. Price. The power to set prices is born from mental availability. Brands that do not have it end up competing with the only resource they have left, which is lowering the price. Without a brand, the only lever is price. And competing on price is a race where, with few exceptions, all companies end up losing.

The short and the long term are not the same. And mixing them costs you money

Here is the misunderstanding that does the most damage. Many people assume that the marketing that sells today and the marketing that builds a brand are the same thing with a different wrapping. They are not. They behave differently, they are measured differently, and they fade at different rates.

The work of Les Binet and Peter Field, two of the most cited advertising effectiveness analysts in the world, is the best radiograph that exists of this. After reviewing nearly a thousand real campaigns collected in the IPA Databank (more than 700 brands, more than 80 categories and more than 30 years of data), they found two curves with very different shapes.

Let us call "activation" the advertising that seeks a sale today. The promotion, the conversion ad, the discount. Short-term activation produces spikes. Large, immediate, easy to attribute. You launch the campaign, sales go up, and after six months the effect has evaporated and you are back to square one. It is commercial adrenaline, it works, but it does not accumulate.

Building a brand, with strategy, in a coherent and consistent way over time, does the exact opposite. Its short-term effect is modest, almost disappointing many times on a dashboard. But it does not evaporate and, exposure after exposure, it lifts the base level of sales. It is an upward shift of the sales curve, slow but sustained. It is the foundation on which everything makes sense.

The mistake of the last decade has been measuring both curves with the same ruler. On a six-month horizon, the brand always loses, because its work has not fully started to appear yet. And by losing on the spreadsheet, its budget has been cut. The vast majority of companies have optimised their way of shrinking. And this cut comes at the worst possible moment. The border between the human and the technological is blurring, products are copied in months and differentiation by features… well, there is none anymore.

Creativity remains an undervalued lever

If the brand is the engine, creativity is the fuel, and few put in the petrol it deserves.

The study The Five Keys to Advertising Effectiveness by NCSolutions (2023 update, on 450 consumer goods campaigns) tells us that creativity explains about 49% of the extra sales generated by advertising. In other words, of everything an ad manages to sell, half depends on the idea, not on the media budget. 

The same study detects another relevant shift: the weight of the brand in the sales generated by an ad has risen from 15% to 21% in a few years. The brand carries more weight, not less, in the direct commercial result. Which makes sense. Without strategy, creativity does not build in the right direction.

This does not mean spending more on production. It means deciding better. A good idea, repeated consistently across the touchpoints that your customer actually uses, generates results for years. Your website, the packaging, the sales team, customer service... they build equity if they tell the same story. When everyone improvises their own, there is no brand. There is just noise spending budget.

Optimising is not choosing between brand and results. It is splitting.

The right question is not "brand or immediate results?". It is, "in what proportion do I split the budget between the two?", and we have had the answer for years, so there is no excuse.

Binet and Field already tested different splits against total profit (short plus long term) and found a point that maximises it. Around 60% on brand building and 40% on activation, on average, for an established brand. It is not a dogma or a sacred number, it varies with your category, your maturity and your sales cycle. A young brand that still has to generate demand needs more brand weight, and a business with very high recurrence can live with less. The value of the figure is not in the exact 60, but in what it is telling us: the majority of companies are far below their optimal level in brand building.

The reason is understandable. Activation justifies itself in a meeting. You show the ROAS and no one argues. You play it safe and justify your job. Good. However, brand requires sustaining an investment whose full return you will not see in the same quarter in which you approve it. It requires stamina and, therefore, is a decision that can be seen as riskier.

But the maths is clear. If you optimise only for what you can attribute this week, you are optimising for the wrong curve. You maximise the peak and erode the foundation. And a year later, you find yourself paying more for each sale, quarter after quarter, because you have stopped building the only thing that makes the next one cheaper, getting the customer to know you before you even speak to them.

Future demand is built or destroyed in the present

Brand equity matters again because the easy money of performance advertising has finally died. Geopolitical instability has driven a restrictive optimisation in marketing budget items, investors have stopped funding growth at all costs and now demand demonstrable profitability, and the end of third-party cookies and Apple's tracking restrictions have made advertising that previously seemed infallible more expensive and even less reliable. When acquiring customers was cheap (we can barely remember it), you could "afford" to ignore the brand and buy growth. Now that growth costs more every quarter, and the only way to lower the structural cost of selling is to have a brand that sells for you before you open your mouth.

This is not about spending more. It is about splitting differently and measuring with the right horizon. The companies that understand this are going to capture demand that their competitors do not even know they are giving away. Those that continue to treat the brand as an image expense will remain trapped running faster month by month just to stay in the same place.