Performance-Brand Budget Split

A discussion on how companies split their marketing budgets between performance and brand marketing, with insights from successful DTC brands.

Performance vs Brand Marketing Split

• Hims & Hers separated marketing budget from launch
  • Got board approval for specific performance/brand allocation
  • Majority still went to performance marketing
  • Used creative brand channels like bar coasters and above-urinal advertising

Different Company Approaches

• Native & Hint (Performance-focused)

  • Almost entirely performance marketing
  • Built brand equity through working media dollars
  • Simplified messaging to enhance performance
  • Never spent on pure brand marketing

• Companies with Heavy Brand Investment

  • Outdoor Voices - struggled to maintain valuation
  • Away - faced challenges (particularly during COVID)
  • Casper - beautiful brand marketing but challenging financials
    • $100M valuation after raising $400M

Success Factors for Performance-Based Brands

• Product characteristics that support performance marketing:

  • Functional benefits
  • Clear consumer outcomes
  • Convenience factor
  • Consumable nature

• Key to scaling:

  • Need performance marketing to reach $500M revenue
  • Brand marketing alone might not get past $50M
  • Performance marketing provides initial "takeoff energy"
  • Can build brand through performance ("performance branding")

Key Insights

• No universal path works for all brands
• Some companies may pivot to brand focus due to lack of performance marketing expertise
• Performance marketing crucial for initial growth
• Brand building can be achieved through performance channels
• Success depends on product type and company capabilities