Binet and Field’s 60/40 Marketing Rule: What It Is, and What It Means for Your Company
The tension between long and short term investment has been at the very center of business strategy since the concept of business first emerged. These days, Binet and Field’s extensive findings in the art of marketing seem almost as fundamental—and for good reason. Their well-known 60/40 investment rule-of-thumb has become standard precisely because it adheres to those principles of investment which have held true since time immemorial.
Things which are standardized, however, are soon at risk of being overlooked and under-considered. The most profound ideas can become so familiar that they lose their meaning, and thereby their utility. What little public conversation does take place around the 60/40 rule today has become overly concerned with debates about the specific numbers and proportions, losing sight of the principles which underlie them. For that reason, a slightly more in-depth discussion on the topic is very much due—and that is the purpose of this post.
What Is the 60/40 Rule?
The 60/40 rule, in a sentence, states that 60% of a company’s marketing budget should be invested toward long-term brand building, while 40% of that budget should go toward short-term activation. Those terms require unpacking, naturally. First, brand building refers to creating a lasting presence within the minds of potential consumers. And, second, activation means realizing that potential with an immediate call to action. Each of these support the other, as a well-developed brand increases the likelihood of immediate action, and apt calls to action allow brand potential to be realized.
Why, and How, Should They Be Split?
How come, if these two aspects of marketing are so closely intertwined, should they be split up at all? Couldn’t a business just market in a way that incorporates both goals in every effort? Yes and no, according to Les Binet himself. Most marketing efforts do indeed progress both sides at least a little. A sponsorship is likely to result in a few short-term sales, even if its primary function is generating brand awareness. Likewise a well-designed point-of-sale, intended for short-term activation, could increase brand perception at the same time. In either case, however, one function overshadows the other. The caveat is that brand and activation efforts differ on two integral fronts: audience and content.
This difference is informative not only as to why these facets should be separated, but also how. First, consider brand building. Brand building efforts are, and ought to be, focussed on a general audience which consists of any and everybody who might enter the buying market within the span of a year, give or take, but remain outside the market for the time being. Since that audience is not yet interested in buying, the content of these efforts should be generally interesting, appealing to basic human needs and desires without being overly specific—and it should be memorable. Now consider activation. Consumers who are already in the market for your product constitute this audience; they are an action away from buying, so to speak. As such, content should be detailed, informative, and useful, providing specific reasons why they should purchase your product right now.
Is it Really 60/40?
The question remains: should a company’s marketing budget really always be divided into precisely 60% for brand and 40% for activation? No, of course not. As with any rule of thumb, 60/40 is merely a tangible handle for a deeper principle, the one discussed above. Actual numbers will vary from industry to industry, and then from company to company. Some situations—like breakout technology—will call for more brand, while others—like commodities—tend to call for more activation. It is the part of the company to work backward from the underlying purposes toward a balance which is appropriate for their circumstance.
Bottom Line
Binet and Field’s 60/40 rule applies to marketing one of, if not the most important principles in business: short term investment must be kept in proportion to long term investment. To understand the rhyme and reason behind the rule—rather than fixating upon the particulars—is to equip one’s company for the often uncertain and always dynamic nature of the market. With a firm grasp on what both brand and activation actually are, as well as why and how to utilize them, businesses can market with boldness regardless of circumstance.
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