What 40 years of IPA data say
about long-term brand building
about long-term brand building
On 7 October 2026, the IPA (the UK’s Institute of Practitioners in Advertising) and the Financial Times published “The Short Book of Long-Term Growth”. It collects co-branded FT advertisements, each backed by evidence from the IPA Effectiveness Databank, which holds more than 1,600 case studies from over four decades of the IPA Effectiveness Awards.
The booklet is written for business leaders. Its argument is that brand building contributes to profit, pricing power and growth, and that companies focused only on short-term sales put their future growth at risk.
The booklet is written for business leaders. Its argument is that brand building contributes to profit, pricing power and growth, and that companies focused only on short-term sales put their future growth at risk.
Seven findings on brand building and business growth
- About 60% brand, 40% activation in FMCG. This split has often produced the best results in FMCG. In other categories, the best split is different (see below).
- Strong brand effects are associated with very large profit increases. Among campaigns reporting four or more very large brand effects, 47.9% also reported very large profit increases, compared with 15.6% of campaigns reporting none.
- Trust-building campaigns deliver bigger business effects. The strongest trust-building campaigns are 41% more likely than other campaigns to report a very large business effect, such as growth in sales, profit or market share.
- Emotional ads are more often very profitable. Emotionally led campaigns are more likely than primarily rational campaigns to report very large profit increases. They also perform better on brand differentiation and memorability.
- Analysts look at brand strength. 79% of surveyed financial analysts consider the strength of a company’s brand and marketing when assessing it. No other factor in the survey was cited as often.
- Recessions can reward brands that maintain advertising investment. Brands with an extra share of voice (ESOV) of more than 8 percentage points during the 2008-2009 recession were significantly more likely to report very large profit growth afterwards. ESOV is the difference between a brand’s share of advertising spend in its category and its market share. In a recession, total advertising spend tends to fall and media rates get cheaper, so a brand that keeps its budget can gain ESOV while competitors cut theirs.
- McCain cut price elasticity by 47%. Under pressure from own-label products and discount retailers in the UK, McCain moved from price promotions to consistent brand advertising. Between 2014 and 2023, its price elasticity fell by 47% and base sales grew by 44%
How the 60/40 budget split varies by category
The 60/40 ratio is based on FMCG cases. An IPA analysis of for-profit cases from the 1998-2016 Effectiveness Awards (“Effectiveness in Context”, 2018) found a different optimal share for brand building in each category:
The IPA presents these figures as guidelines that marketers should adapt to their own market.
- Other services: 51%
- Durables: 58%
- FMCG: 60%
- Retail: 64%
- Financial services: 80%
The IPA presents these figures as guidelines that marketers should adapt to their own market.
Vanguard and Xero: shifting budget from activation to brand building
Vanguard: from 100% activation to 75% brand building
For three years after launching its UK personal investor platform, Vanguard spent its marketing budget on digital activation. Research then showed that the brand needed to be better known: financial intermediaries worried that their clients had never heard of Vanguard. The company also wanted a broader customer base and a more emotional connection with the public.
Vanguard moved into TV, radio, outdoor and video on demand, and kept display, social and search to bring visitors to its site and convert them. By 2023, 75% of the budget went to brand building. Its share of new accounts rose from 5.5% before the campaign to 13.1% in 2023, and assets under management grew by 700%.
Vanguard moved into TV, radio, outdoor and video on demand, and kept display, social and search to bring visitors to its site and convert them. By 2023, 75% of the budget went to brand building. Its share of new accounts rose from 5.5% before the campaign to 13.1% in 2023, and assets under management grew by 700%.
Xero: brand building in B2B
B2B marketing budgets usually lean towards activation. Accounting software company Xero went the other way: its “Healthy Business” campaign used humorous ads about the chaos of running a small business, and around 77% of the budget went to brand building. After the campaign launched in 2021, Xero reached its goal of 1 million subscribers seven months early and grew market share by 85%.
The IPA’s reading of both cases is that the mix should fit the audience, and that brands spending 100% on either activation or brand building risk limiting their growth.
The IPA’s reading of both cases is that the mix should fit the audience, and that brands spending 100% on either activation or brand building risk limiting their growth.
The boardroom gap in brand knowledge
The IPA chose the FT as a partner because of its readership among senior business leaders, the people who set marketing objectives and approve budgets. In an FT/IPA survey, 52% of C-suite executives rated their board’s knowledge of brand building as average to very poor.
The IPA found that organisations without brand expertise at the top were more likely to rely on short-term marketing strategies that underperform commercially. Among companies with low brand understanding, only 49% said their boards saw balancing short- and long-term marketing as a route to better results. In companies with high brand understanding, the figure was 83%.
For marketers, the practical step is to argue for brand budgets in the measures that boards and analysts already use. The cases in the booklet report their results this way: McCain in price elasticity and base sales, Vanguard in share of new accounts and assets under management, Xero in subscribers and market share.
Source: IPA and Financial Times, The Short Book of Long-Term Growth (October 2026)
The IPA found that organisations without brand expertise at the top were more likely to rely on short-term marketing strategies that underperform commercially. Among companies with low brand understanding, only 49% said their boards saw balancing short- and long-term marketing as a route to better results. In companies with high brand understanding, the figure was 83%.
For marketers, the practical step is to argue for brand budgets in the measures that boards and analysts already use. The cases in the booklet report their results this way: McCain in price elasticity and base sales, Vanguard in share of new accounts and assets under management, Xero in subscribers and market share.
Source: IPA and Financial Times, The Short Book of Long-Term Growth (October 2026)