Brand Investment: Why Most Businesses Underspend on the Wrong Things

Brand investment is the allocation of budget, time, and organisational energy toward building how a business is perceived, remembered, and preferred. Done well, it compounds over time, reducing the cost of every sale you make and every customer you try to keep. Done poorly, it drains budget with nothing to show for it except a new logo and a brand guidelines PDF nobody reads.

The problem is not that businesses refuse to invest in brand. Most do, in some form. The problem is that they invest in the wrong things, at the wrong time, for the wrong reasons, and then measure the results in ways that make it impossible to know whether any of it worked.

What Does Brand Investment Actually Mean?

When most marketing teams talk about brand investment, they mean the money spent on brand awareness campaigns, creative production, and brand identity work. That is a reasonable starting point, but it is too narrow to be useful as a strategic frame.

Brand investment, properly understood, includes anything that shapes how a business is perceived by the people it wants to reach. That includes advertising, yes, but it also includes customer experience design, the quality of your content, how your sales team presents the company, how you handle complaints publicly, and whether your product does what you say it does. All of these things contribute to brand equity. Most of them sit outside the marketing budget.

This matters because it changes how you think about return. If brand investment is just the media spend on awareness campaigns, you can model reach and frequency and call it done. If brand investment includes every touchpoint that shapes perception, you are dealing with something much harder to isolate but much more commercially significant. BCG’s research on what shapes customer experience makes exactly this point: the drivers of perception are distributed across the business, not concentrated in the marketing function.

I spent several years running an agency that grew from around 20 people to close to 100. One of the clearest lessons from that period was that our brand was built more by delivery quality and internal network reputation than by any external marketing we did. Clients referred us. Partners recommended us. That compounding effect came from consistently doing the work well, not from a campaign. It was brand investment, just not the kind that shows up on a media plan.

If you want to go deeper on how brand strategy connects to positioning, audience understanding, and competitive differentiation, the full picture is covered in the brand positioning and archetypes hub on The Marketing Juice.

Why Businesses Systematically Underspend on Brand

There is a structural reason why brand investment gets cut first and funded last. It is not irrationality. It is measurement.

Performance channels give you a number. Click-through rate, cost per acquisition, return on ad spend. You can see the output of every pound you put in, or at least you think you can. Brand investment gives you something much harder to quantify: a shift in how people think about you. That shift is real and commercially significant, but it does not show up cleanly in a dashboard the week after you run the campaign.

So when budget pressure arrives, which it always does, the performance channels look defensible and the brand budget looks like overhead. Finance teams cut overhead. Marketing leaders, under pressure to justify spend, let it happen. Over time, the business becomes entirely activation-led: good at capturing demand that already exists, poor at creating the conditions for demand to form in the first place.

I have seen this pattern repeatedly across the agency clients I have worked with. A business cuts brand spend to hit a quarterly target. Performance metrics hold up for two or three quarters because there is residual equity in the market. Then the cost per acquisition starts creeping up. Conversion rates soften. The sales team starts reporting that prospects need more convincing. By the time anyone connects the dots back to the brand investment decision made eighteen months earlier, the instinct is to run more performance activity, not to rebuild what was eroded.

Wistia’s analysis of why brand building strategies fail points to a related dynamic: most businesses do not have a clear enough brand position to make their investment work, regardless of the budget. Spending more on a poorly defined brand does not fix the positioning problem. It just makes the noise louder.

The Brand Versus Performance Balance: What the Evidence Suggests

The marketing effectiveness debate has produced a reasonably consistent picture over the past decade. The broad finding, drawn from large-scale analysis of advertising effectiveness, is that brand and performance investment work best in combination, and that cutting brand to fund short-term activation tends to deliver a short-term gain at the cost of long-term market share.

The specific ratios that get cited vary by category, business model, and competitive context. Anyone who gives you a universal number is selling you a framework, not a finding. What is more defensible is the directional principle: most businesses that have been running for more than a few years are likely over-indexed on performance and under-indexed on brand, because the measurement environment incentivises that imbalance.

The practical implication is not to flip the ratio overnight. It is to be honest about what your current investment mix is actually doing. Performance spend captures demand. Brand spend creates it. If you are spending heavily on capturing demand and lightly on creating it, you are essentially harvesting a field you stopped planting.

BCG’s work on brand advocacy adds another dimension here. Strong brands generate word-of-mouth at a rate that weak brands cannot match, and word-of-mouth is effectively free demand generation. The return on brand investment is partly captured in paid channels and partly in the organic demand that a well-regarded brand creates without spending anything.

What Brand Investment Should Actually Fund

If you accept that brand investment is broader than awareness advertising, the question becomes: where should the money go? The answer depends on where you are in your brand’s development and what your commercial priorities are.

For businesses with unclear or undifferentiated positioning, the most important investment is strategic: getting the positioning right before spending on visibility. There is no point in running brand campaigns if you cannot articulate clearly why someone should choose you over the alternatives. The spend just amplifies a message that does not land.

For businesses with a clear position but inconsistent execution, the investment priority is usually systems and standards: brand identity toolkits, tone of voice guidelines, training for the people who represent the brand in customer-facing roles. This MarketingProfs piece on building a flexible brand identity toolkit covers the practical mechanics of making brand standards usable across a distributed team, which is harder than it sounds when you are operating across multiple markets or channels.

For businesses with a clear position and consistent execution, brand investment should be focused on reach and frequency: getting the right message in front of the right people often enough that it sticks. This is where media spend becomes the primary lever, and where the brand versus performance balance question becomes most relevant.

One thing I would push back on is the assumption that brand investment is always about advertising. When I was building out the SEO practice at the agency, we treated content quality and editorial standards as a brand investment. The work we produced reflected on the agency. It shaped how clients and prospects perceived our capability. It was not a brand campaign, but it was absolutely a brand investment, and it had a measurable commercial return in the form of inbound enquiries and client retention.

How to Measure Brand Investment Without Lying to Yourself

Brand measurement is genuinely difficult. Anyone who tells you otherwise is either working with a very simple model or not being straight with you. But difficult does not mean impossible, and the answer is not to stop measuring. It is to measure the right things and be honest about what the numbers can and cannot tell you.

The most useful metrics for brand investment tend to fall into three categories. First, awareness and consideration: do people in your target market know you exist, and do they think of you when they are in the market for what you sell? This requires survey-based measurement, which is not cheap, but it is the only way to track the thing that actually matters. Sprout Social’s brand awareness tools offer one entry point for businesses that want to start tracking this systematically.

Second, commercial proxies: metrics that correlate with brand health without directly measuring it. Branded search volume is a reasonable proxy for awareness and preference. Direct traffic is another. Net promoter score, if tracked consistently over time, tells you something about the quality of the brand experience. None of these are perfect, but together they give you a directional read on whether brand equity is building or eroding.

Third, downstream commercial outcomes: pricing power, retention rates, cost per acquisition over time. These are the things brand investment is supposed to affect, and tracking them over a multi-year horizon gives you the most honest picture of whether the investment is working. The challenge is that the signal is slow and noisy, which is exactly why short-term reporting environments tend to undervalue brand.

Wistia’s piece on the problem with focusing purely on brand awareness makes a point worth sitting with: awareness is a necessary condition for brand success, but it is not sufficient. A brand can be well-known and still not be chosen. Measurement frameworks that stop at awareness miss the part of the picture that actually drives revenue.

I judged the Effie Awards for a period, and one of the things that struck me most about the entries that won was how clearly the teams behind them had defined what success looked like before the work ran. They were not measuring brand investment retrospectively and hoping something correlated. They had hypotheses, they tested them, and they reported honestly on what moved and what did not. That discipline is rare, and it is worth building.

The Risk of AI and Automation on Brand Equity

There is a newer dimension to brand investment that did not exist in the same form five years ago: the risk that automation and AI-generated content erodes brand equity by producing output that is technically competent but distinctively nobody’s.

This is not an argument against using AI in marketing. It is an argument for being deliberate about where brand distinctiveness comes from and making sure that the investment in that distinctiveness is protected, not quietly defunded in the name of efficiency. Moz has written clearly on the risks that AI poses to brand equity when it is deployed without sufficient editorial control or brand standards.

The practical risk is this: if your brand voice, your editorial standards, and your creative quality are what differentiate you in the market, and you automate those functions without maintaining the standards that made them valuable, you are not saving money on brand investment. You are spending it, just in the wrong direction.

Brand Investment as Infrastructure, Not Campaign Budget

The businesses that build the most durable brand equity tend to share one characteristic: they treat brand as infrastructure rather than as a campaign line. Infrastructure gets maintained even when budgets are tight, because cutting it has consequences that are expensive to reverse. Campaign budgets get cut when the quarter looks difficult, because the consequences are easier to defer.

Shifting that mental model requires two things. First, a clear articulation of what your brand investment is actually building toward, in commercial terms. Not “we want to be the most trusted brand in our category” but “we want to reduce our cost per acquisition by 15% over three years by building sufficient market awareness that fewer prospects need to be convinced from cold.” Specific, commercial, time-bound.

Second, a reporting cadence that is long enough to capture the signal. Brand investment does not pay back in thirty days. If you are reporting on it monthly against short-term metrics, you will always find a reason to cut it. Quarterly brand tracking, with annual reviews of the commercial proxies, gives you a more honest picture of whether the investment is compounding.

For a case study in how brand investment can transform commercial outcomes even from a standing start, this MarketingProfs account of a B2B company building brand awareness from zero is worth reading. The mechanics are specific to their context, but the underlying logic, that deliberate brand investment produces measurable commercial outcomes, is transferable.

Brand investment decisions do not sit in isolation. They connect directly to how clearly you have defined your positioning, how well you understand your audience, and how honestly you have mapped the competitive landscape. All of that groundwork is covered in the brand strategy section of The Marketing Juice, if you want to work through the foundations before deciding where to put the budget.

About the Author

Keith Lacy is a marketing strategist and former agency CEO with 20+ years of experience across agency leadership, performance marketing, and commercial strategy. He writes The Marketing Juice to cut through the noise and share what works.

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