08

Allocate budget

How much to spend, and where?

7 tools 6 law, 1 frame, 0 folklore, of 7

8.1 Evidence tier: Law

60/40 Brand vs Activation

A budget split, roughly 60% to broad-reach brand building and 40% to short-term activation, associated with the strongest long-term business effect.

Breaks when The ratio moves by category — the B2B figure is about 46/54, drawn from fewer than 50 cases, and the authors themselves call it tentative and warn against following it precisely. The database skews to large, mature, well-funded brands; a product starting from zero is not in it.

8.2 Evidence tier: Law

Excess Share of Voice

The gap between a brand's share of category advertising voice and its share of market, which predicts the direction and rate of share change.

Breaks when Share-of-voice measurement gets less reliable as media fragments, and the model ignores creative quality entirely — excess voice for a bad ad buys nothing.

8.3 Evidence tier: Law

Adstock & Diminishing Returns

The modelled carry-over of advertising effect after exposure, combined with the falling return on each additional unit of spend.

Breaks when Decay half-life and saturation point are estimated from data. With thin data they are effectively invented, and the model then confirms its own assumption.

8.4 Evidence tier: Frame

Marketing Mix Modeling

A regression on aggregate historical data that estimates each marketing input's contribution to sales.

Breaks when Correlational. Uncalibrated by experiment it moves budget systematically to the wrong channel — and whoever builds the model can largely choose the answer.

8.5 Evidence tier: Law

Incrementality / Geo-Lift Testing

A randomised experiment that withholds spend from matched markets or audiences in order to measure what that spend actually caused.

Breaks when Needs sample, time and patience. The statistical power to detect a small effect is absent from most budgets, so “no effect” usually means “we could not measure it”.

8.6 Evidence tier: Law

Advertising Elasticity

The percentage change in sales produced by a 1% change in advertising spend, generalised across studies into a single magnitude.

Breaks when It is an average, and it has been falling. Elasticity is higher for durables than non-durables, higher early in the life cycle than at maturity, and higher when advertising is measured in gross rating points than in money — so the headline figure describes no actual brand. Used as a planning input it also silently assumes average-quality advertising, which is the variable most under a team's control and precisely the one the meta-analysis averages away.

8.7 Evidence tier: Law

Split-Cable Experiments

Randomised in-market tests that deliver different advertising weight or copy to matched halves of a cable television audience and read the sales difference from the same households' purchase panel.

Breaks when It is the finding that is uncomfortable, not the method. Across 389 tests, increasing advertising budgets relative to competitors did not increase sales in general, and standard recall and persuasion copy-test measures showed no strong relationship to sales effect — the two things most advertisers optimise failed to predict the outcome. A later analysis of 241 tests run between 1989 and 2003 found the weight effect significantly above zero for established products, driven by the more recent tests, so the 1995 result is partly a finding about a period. It also only ever covered packaged goods on television.