In today’s fast-paced marketing landscape, the debate between brand building and performance marketing has been ongoing. However, according to James Hurman, co-founder of Tracksuit, these two strategies shouldn’t be in conflict but rather work together to drive sustainable business growth.
Hurman sat down with B&T to share critical insights from Tracksuit’s collaboration with TikTok on their latest study, The Awareness Advantage. The study reveals how higher brand awareness significantly enhances the efficiency of performance marketing on platforms like TikTok.
Tracksuit’s approach is based on a concept Hurman calls “future demand.” He explained: “In any market, there are two types of demand. There’s what we call existing demand, which are people who are in the category and ready to buy now, and there is what we call future demand, which is people that aren’t in the category [and] ready to buy now, but will be in the future.” He added, “Marketing has two jobs to do. One is to convert the demand that’s in the market right now, and the other job is to build future demand”.
A core finding of the Tracksuit and TikTok study is the impact of brand awareness on conversion rates. Hurman said that brands with higher awareness levels convert more efficiently. “If you’ve got 40% brand awareness, you’re one and a half times as likely to convert as if you’ve got 20%. If you’ve got 60% brand awareness, you’re three times as likely to convert”. This correlation between awareness and conversion highlights the importance of building a strong brand to support performance marketing efforts.
Hurman elaborated on how companies often hit a “performance plateau,” where early success with performance marketing leads to diminishing returns. He noted that many young brands start with a heavy focus on performance marketing, enjoying strong early results with low customer acquisition costs and high ROI. However, “they get to what we kind of call a performance plateau, which is that spend in those performance media stops working quite as well.” To continue growing efficiently, Hurman said that companies must “build brand awareness in a way that supports that efficient performance over time”.
To maintain long-term growth, Hurman advocates for a balanced approach, suggesting marketers should aim to split their budgets roughly 50/50 between brand building and performance marketing. “What the data suggests is that… about half of our marketing budget [should go] into doing the things that build our brand… and about half our budget [should be spent] converting those who are in the category,” Hurman explained.
However, he also acknowledged that this ratio can vary depending on the industry and stage of a company. For instance, newer brands might need to spend more on performance initially, while established brands in sectors like banking may need to focus more on brand building.
Hurman also reflected on the evolving nature of digital platforms like TikTok and their role in both brand and performance marketing. While the fundamental principles of marketing remain unchanged—”one part of marketing works over the long term to build awareness, and one part… converts the sale of people that are in the market”—Hurman noted that digital platforms will continue to introduce new tools to help marketers achieve both goals. “Everyone’s going to want to try and be full funnel,” he said.
Hurman stressed the importance of measurement in marketing success, noting that marketers need “two dashboards side by side”. One should focus on short-term performance metrics like ROI and customer acquisition costs, while the other measures long-term brand health indicators such as awareness and consideration. “It’s important to be measuring in the right way to make sure we’re balancing those two things,” Hurman said.
For marketers looking to drive sustainable growth, Hurman’s advice is clear: invest in both brand and performance marketing. As demonstrated by The Awareness Advantage study, the more familiar your brand is to consumers, the more efficient your performance marketing becomes. Brands that embrace this holistic approach will be well-positioned for long-term success in an increasingly competitive digital world.
