The secret to a well-balanced marketing budget

How to balance your spending between brand and direct marketing?

Marketing expert Rory Sutherland has been a favorite source of marketing wisdom since I first  discovered his Ted talk back in 2009. He’s funny, engaging and correct about so many things.

I decided to summarize here some of his views on spending because it resonated with how I’ve always believed it should be done but couldn't justify it with figures.

Finally, I can, and I hope it helps marketing directors to make more confident decisions in the future.

I focus on the watch market because it’s my passion, but the points below apply to practically all other categories.

The question:

Should brands spend more on customer engagement and loyalty, or conversion?

Analysis shows that too many brands spend on conversions and sales, not because it’s more effective there, but because it’s easier to measure and quantify.

The trend has been exaggerated over the last decade because of the increased ability of analytical reporting that digital channels offer.

The problem:

Basically, it’s easy to measure surface level engagement like impressions, likes and click-throughs on all your channels, but it’s hard to measure loyalty.

Ironically, it’s that loyalty, or first time engagement which brought your customers in the first place.

Rory estimates that roughly 97% of the customers you’re targeting are not in the market at the time of promotion. That’s staggering!

Meaning that, if you release a new watch for example, you have to draw in people who were not necessarily in the market for a watch in the first place. Even if they’re watch enthusiasts, there might be many other, personal reasons holding them back from an immediate purchase.

Ideal marketing scenario:

I’ve always seen the ideal marketing process as this:

  1. Surprise or seduce people who are not thinking of a brand.
  2. Create the confidence to purchase.
  3. Establish the groundwork for brand loyalty.

The idea is that when you capture someone’s attention, even if they're not ready to purchase immediately, at least you’re preparing them to think of you the next time they’re able to.

So going back to analytics, tracking converting sales is not creating sales. So on the surface, it’s indeed easier for marketing directors to focus on tracking sales, but let’s be clear, it’s not creating sales.

So what’s the answer?

Research conducted by Peter Field & Les Burnett reveals that the sweet spot lies around spending 60% on Brand marketing - through combined mass media - and 40% on Direct marketing - predominantly digital, and in-store sales drivers.

That’s not all.

It’s recommended to start spending on what needs to be optimized first, and then alternate between the two, improving each incrementally.

For example, there’s no point in spending on brand work if your sales team, boutique staff, online shop or production line isn’t ready. And it’s equally pointless to spend on the conversion experience when you’re not creating enough awareness to get customers there in the first place.

Rory’s point goes further to specify that in fact the priority on spending should start with maintaining repeat purchasers first, since the brand has already invested in that customer acquisition, and then approach new audiences second.


Having learnt my trade from some of the best creative and marketing minds in the industry, I feel that a lot of this thinking was infused in my approach from the beginning. It's become my intuition.

It’s why I focus on storytelling, and building a meaningful brand personality that customers can relate to, because that way brands can further count on capturing that fleeting moment when their customers are ready to purchase, whether now, or in the future. That’s a win-win.