The budget allocation question every CMO gets wrong
Most brands are either too top-of-funnel or too bottom. The fastest-growing have cracked a specific ratio between awareness, consideration and conversion. Your attribution is quietly choosing the wrong one for you.
The split that feels rigorous and isn't
Dividing the budget evenly across channels looks disciplined in a board pack. It is usually the fastest way to underfund the one thing actually moving the number. The market has drifted hard toward the ends of the funnel: 62.6 percent of total media spend now goes to awareness plus conversion, up more than ten points since 2024, while loyalty and retention spend fell 29 percent, according to Gartner. The middle, where consideration is won, is being starved.
Set against that, the evidence on the right long-run split has not moved. The classic finding still holds: around 60 percent to brand and 40 percent to activation for most B2C, and closer to 46/54 for B2B. Brands that skew too far toward conversion buy short-term efficiency and long-term decline.
Why most attribution points you the wrong way
The trap is that last-click attribution rewards the bottom of the funnel because that is the only place it can see. It cannot measure the awareness that made the click cheap in the first place, so it recommends cutting the very spend that was working. AI-driven optimisation makes this worse, not better, because it optimises toward the measurable conversion by default.
The correction is to measure differently. Incrementality testing is now used by 52 percent of US marketers, and open-source marketing mix modelling has become genuinely accessible, with Google Meridian and PyMC-Marketing the current leaders. These see the whole funnel, not just the last touch.
The number under all of it
One rule reframes the entire budget debate: only about 5 percent of buyers are in-market at any given time. Spend built only to convert is fishing in that 5 percent and ignoring the 95 percent who will buy later and are forming their view now. Excess share of voice, spending a larger share than your market share, drives roughly 0.5 to 0.6 percent of growth for each point of excess. That growth compounds. Cutting brand to feed conversion spends the compounding to flatter this quarter.
Splitting the budget by channel feels like rigour. It is the fastest way to underfund the thing that actually moves the number. Fix the ratio before you touch the channels.
Key research
- 62.6 percent of total media spend now goes to awareness plus conversion, up ten-plus points since 2024; loyalty and retention spend fell 29 percent. Gartner, 8 June 2026
- Marketing budgets sit at roughly 7.8 percent of company revenue in 2026. Gartner 2026 CMO Spend Survey
- Only about 5 percent of B2B buyers are in-market at any time. Ehrenberg-Bass Institute / John Dawes
- Optimal split is around 60/40 brand to activation for B2C, closer to 46/54 for B2B. Binet and Field / LinkedIn B2B Institute
- Incrementality testing is now used by 52 percent of US marketers. eMarketer with TransUnion, 2025
Questions senior buyers ask
How do we know if we are over-invested in conversion?
If last-click is your primary measure and your cost per acquisition is creeping up while volume is flat, you are likely starving the top and middle of the funnel. The tell is that scaling conversion spend stops producing more conversions. That is the point where more brand investment, not more activation, unlocks the next tier of growth.
What ratio should we actually use?
As a starting point, roughly 60 percent brand and 40 percent activation for B2C, and closer to 46/54 for B2B. Treat it as a direction, not a rule. The right number depends on how considered your purchase is and how far ahead of demand you are building. The mistake is having no deliberate ratio at all.
Is marketing mix modelling only for big budgets?
No longer. Open-source tools like Google Meridian and PyMC-Marketing have made mix modelling accessible without a six-figure vendor contract. For most mid-sized brands, a simple incrementality test on one channel is the fastest way to see what last-click is hiding.
Won't cutting conversion spend hurt this quarter?
It can, slightly, which is exactly why the trap persists. The compounding growth from brand investment shows up over quarters, not weeks, so the short-term optimiser always wins the argument. The brands that hold the line are the ones that report on the whole funnel, not just the last click.