For a decade, the marketing budget has been a zero-sum line item. Brand on one side, demand on the other. Demand won, because demand could be measured. Brand starved, because brand could not. By 2024, most B2B marketing functions were running on a budget shape that allocated heavily to the bottom of the funnel and treated upper-funnel investment as unaccountable brand overhead.
That era is ending. Three structural forces are dismantling the trade-off at once. The measurement model that justified demand’s dominance has thinned. The optimisation work that made performance marketing a competitive advantage has commoditised. And the share of any market that is actually in active buying mode at any moment has reasserted itself as the data point that should be governing every capital allocation decision.
The CFO who opens the pipeline review and sees sixty per cent of the quarter’s strongest deals trace back to “self-reported,” “other,” or “unknown” is encountering the consequence. The dark funnel has matured from a tracking anomaly into the primary surface of buyer conviction. Demand efficiency, by every honest measure, is now a depreciating asset. And the budget that for a decade was withheld from brand is the budget about to be redirected back into it.
“It is not just so much about finding out the source of how someone learned about Adverity. It is about finding out what was most memorable for them. So the metric for me is not so much a number, but it is a story.”
Mark Debenham · Chief Marketing Officer, Adverity
A category error, not a budget choice
The structural problem with the brand-versus-demand framing is that it was always a category error. Brand and demand are not competing line items. They are sequential investments against the same buyer pool, separated by time horizon. Demand captures the small share of the market that is in active buying mode now. Brand prepares the much larger share that will be in buying mode later. Funding one without the other does not save money. It compounds inefficiency in both.
Paul Anderson, Co-Founder and Global Executive Creative Director at Gravity Global, points to the data point that should be reframing every B2B budget conversation. Industry research from the LinkedIn B2B Institute and Ehrenberg-Bass consistently shows that approximately five per cent of any addressable market is in active buying mode at any given time. The other ninety-five per cent is not. They are not in the CRM. They are not on the retargeting list. By every conventional measure, they are invisible. Performance marketing, by design, optimises for the five. Brand investment, by design, prepares the ninety-five.
Fig 01 The Capital Allocation Across the Buyer Pool
Performance marketing optimises for the five. Brand prepares the ninety-five. Defunding either compounds inefficiency in both.
Anderson puts the consequence plainly. The vendor that wins a competitive shortlist was already on the shortlist before the shortlist was drawn up. The shortlist itself is a memory output. Defunding the work that builds memory does not save budget. It guarantees that when the ninety-five enter market, the brand that funded the wait is the brand they remember. The brand that did not, is not.
Commercial Implication
The brand-versus-demand budget framing is a measurement artefact, not a strategic choice. Treating them as competing line items guarantees that demand efficiency declines over time, because demand efficiency depends on preference already formed in the ninety-five per cent before the buyer ever appears in a CRM record.
Why the budget shape has to move
Force one: signal loss
Cookies have decayed. Walled gardens have absorbed the journey. Buying committees have moved into closed channels. AI assistants are absorbing the discovery layer. Buyers are completing most of the journey before any tracked touchpoint can register them. Jen Brown, Director at Engaging Interactions and a former analytics leader, frames the issue precisely. Attribution as it has been practised is about credit and recognition, not about what the next best action should be for the buyer. It rewards the platform that closed the file, not the channel that built the conviction. When the trackable surface shrinks, the model does not just become incomplete. It becomes misleading.
Force two: AI parity
Dawn Miley, who leads growth marketing at Adobe across brand, performance, engagement, and retention, has observed it from inside one of the world’s largest marketing organisations. Performance optimisation, she argues, is heading toward parity. The platforms are converging. The tactics are becoming common knowledge. AI is consuming the optimisation work at an industrial pace. When every competitor uses the same LLM-driven bidding strategy, the marginal return on optimisation drops toward zero. What was a competitive advantage in 2018 is becoming table stakes in 2026.
Jason Warnes, who has led work with brands including Volvo and Shell across the long arc of brand investment, draws the same conclusion from the agency side. The fixation on optimisation has been a sustained detraction from real brand investment. With AI, that optimisation work becomes commodity. What is left, when the commodity layer is stripped out, is brand.
Force three: the ninety-five per cent reasserts itself
As performance optimisation flattens and attribution thins, the only remaining differentiator is preference, formed in the long arc, before the buyer enters market. Preference is built by long-form content, sponsored editorial, sustained category presence, and unhurried thought leadership. None of it shows up in a quarterly attribution report. All of it shows up in the shortlist when the ninety-five become buyers.
“The fixation with optimisation and performance marketing has been a sort of detraction from really investing in the brand. With AI, a lot of that optimisation becomes table stakes. When you take that out of the equation, what is left is branding.”
Jason Warnes · Brand and Experience Strategist
Commercial Implication
As AI parity flattens performance marketing yields, brand investment is reclassified from creative overhead to the primary driver of competitive asymmetry. The only durable margin available to a B2B marketing function in 2026 is the preference that was built when the rest of the market was still optimising bid strategies.
What the rebalanced budget actually looks like
The rebalanced position is straightforward to describe and difficult to fund in a quarterly business review. Brand and demand are a single capital allocation against the full one hundred per cent of the buyer pool, separated by time horizon, not a budget trade-off between two competing line items. Demand investment captures the in-market five per cent in the current quarter. Brand investment compounds preference across the inactive ninety-five per cent who will be in-market across the next three to five years.
What ties the two halves together is a circular economic dependency. The demand half is starved of warm buyers when the brand half is defunded, because the consideration set the demand team is paying to convert was built by the brand team in the years prior. Without preference already formed, every demand pound pays a higher cost to capture a less-warm buyer, and every quarter of underperformance is met with a request for more demand budget. The cycle compounds until the brand position is gone and the demand budget is the only lever left.
Ruslan Tovbulatov, Chief Marketing Officer at Gloat, names the discipline in fiduciary terms. His framework, brand-demand-expand, treats the three as parts of a single allocation, with expand compounding the value of existing customers. The eighteen-month CMO, Tovbulatov notes, only funds demand, because demand pays out inside the eighteen-month tenure. The demand-only posture is a byproduct of transient CMO tenure. Funding demand buys short-term survival. Funding the full allocation buys enterprise longevity.
Table 01 Demand-only posture vs Brand-and-demand posture
| Allocation discipline | Demand-only posture | Brand-and-demand posture |
|---|---|---|
| Capital framing | Brand and demand as competing line items | Brand and demand as one allocation against one buyer pool |
| Buyer pool addressed | The in-market five per cent | The full one hundred per cent across overlapping time horizons |
| Measurement lens | Last-click and platform-attributed conversion | Self-reported attribution paired with brand health and citation share |
| AI strategy | Optimisation efficiency inside paid channels | Citation visibility and category authority across owned, earned, and machine-mediated surfaces |
| Capital horizon | Quarterly campaign return | Multi-year compounding asset on the balance of mind |
| Career risk profile | Eighteen-month tenure rewarded by short-term pipeline | Multi-cycle tenure rewarded by durable preference and pricing power |
What rebalancing looks like in practice
Lindsay Boyajian Hagan, Vice President of Marketing and Co-Head of Revenue at Conductor, has already made the move. She redirected approximately half of her demand budget into long-form content, original research, customer evidence, and influence programmes. The investment will not return a million marketing-qualified leads next month. It is structured to return preference, citation, and consideration set inclusion across the next three to five years. The leaders who win the argument internally are the ones who can show that demand efficiency itself depends on the brand work the budget has been withholding.
This is the move the quietly-shifting-budget-back-to-brand class has been making. It looks unfashionable in a 2024 quarterly business review. It will look prescient in the 2027 one.
The honest line on the dashboard
A small but growing number of senior marketing operators have stopped trying to fix attribution and started asking buyers directly. The discipline is called self-reported attribution, and it is becoming the most honest line on the dashboard.
Mark Debenham has built it into nearly every form and touchpoint at Adverity. The output is not a clean source code. It is a set of stories. Buyers recall the podcast they heard six months ago, the article a colleague forwarded, the conversation at an event, the LinkedIn post they read at eleven in the evening. There is a specific commercial irony in the pattern: the activities buyers cite as the ones that shaped their decision are precisely the activities the demand-side dashboard cannot see, and the absence from the dashboard is the reason finance has been quietly draining their budget.
John Piccone, Regional Vice President for the Americas at Adform, frames the underlying truth in language a board can recognise. People are not rational. If they were, they would vote for economists, and instead they vote for storytellers. Mental availability and physical availability, the two assets Byron Sharp and the Ehrenberg-Bass Institute identified as the foundations of brand equity, are the two assets a brand actually owns. Neither shows up in last-click. Both are funded by the half of the budget that demand-only thinking treats as discretionary.
Where the next budget cycle goes first
The CFO who asked where sixty per cent of pipeline came from has not encountered a measurement failure. The CFO has encountered the consequence of a decade of budget concentration on the demand half of a capital allocation that was always meant to be both.
The board-level question follows.
The question every CMO should bring to the next board meeting
“If the brand half of the budget is what makes the demand half work, and demand efficiency is now declining quarter on quarter, what is the next budget cycle funding first?”
Reference
Frequently asked questions
How does brand investment fund demand efficiency?
Brand and demand are two halves of the same allocation against the same buyer pool, divided by when the buyer becomes active. The demand half closes deals in the current quarter from buyers already in market, roughly five per cent of the pool. The brand half compounds preference across the other ninety-five per cent across a three-to-five-year horizon. The dependency runs in one direction: warm buyers do not appear in the demand pipeline by accident, they arrive there because brand work shaped the consideration set in advance. Defund the brand half and demand cost per acquisition rises, the rise prompts a request for more demand budget, and the cycle compounds until the brand position is gone and the demand lever is the only one left to pull.
What is the 95/5 rule and why does it matter?
The 95/5 rule, established by the LinkedIn B2B Institute and Ehrenberg-Bass research, holds that approximately five per cent of any addressable B2B market is in active buying mode at any given moment. The other ninety-five per cent is not. Performance marketing, by design, optimises only for the five. Brand investment prepares the ninety-five for when they enter market. Defunding brand does not save budget; it guarantees that when the ninety-five become active buyers, the brands that funded the wait are remembered and the brands that did not are not.
Why is performance marketing efficiency declining?
Three structural forces are reducing the marginal return on performance optimisation. First, signal loss: cookies have decayed, walled gardens absorb the journey, and AI assistants intercept discovery. Buyers complete most of their journey before any tracked touchpoint registers. Second, AI parity: when every competitor uses similar LLM-driven bidding strategies, the marginal return on optimisation drops toward zero. Third, the ninety-five per cent reality: as the trackable surface shrinks and tactics commoditise, the only remaining differentiator is preference, formed in the long arc before the buyer enters market.
What is self-reported attribution?
Self-reported attribution is the practice of asking buyers directly what activities they credit with shaping their decision, rather than relying on platform-attributed conversion data. The output is not a clean source code but a set of stories: buyers recall the podcast they heard months earlier, the article forwarded by a colleague, the conversation at an event, the LinkedIn post read late at night. The activities buyers report as memorable are almost exactly the activities the demand-side measurement model under-credits, and that finance, reading the dashboard, has been steadily defunding.
How should CMOs respond to declining demand efficiency?
The strategic response is to treat brand and demand as a single capital allocation rather than competing line items. Lindsay Boyajian Hagan of Conductor has redirected approximately half of her demand budget into long-form content, original research, customer evidence, and influence programmes. The investment will not return marketing-qualified leads next month; it returns preference, citation, and consideration set inclusion across the next three to five years. The argument that wins internally is that demand efficiency itself depends on the brand work the budget has been withholding.
What is the difference between mental availability and last-click attribution?
Mental availability, established by Byron Sharp and the Ehrenberg-Bass Institute, refers to the propensity of a brand to come to mind in buying situations. It is the cognitive prior that determines which brands enter the consideration set before any digital journey begins. Last-click attribution measures only the final touchpoint that closed the file. The two operate at different layers: mental availability is the foundation that makes any subsequent demand activity efficient; last-click is a measurement output that systematically under-credits the work that built the foundation.
Contributing Practitioners
The voices behind this piece
This analysis draws on long-form interviews conducted on The Business of Marketing podcast with eight senior operators reshaping how brand and demand are funded across the marketing function.
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