Back in 2023, I walked away from a role at an DTC startup. The core reason: I couldn't get behind the direction on brand vs. performance marketing. The founder wanted to go full performance. I believed the brand needed room to breathe.

We parted on good terms, but that moment stuck with me.

Now Nike is going through the same thing. At a slightly different scale.

$28 billion in market cap, gone. Digital sales down 9%. Gross margin contracting for 7 straight quarters. SEVEN quarters, that’s insane.

The Swoosh bet everything on DTC and performance marketing: cut wholesale partners, cranked up digital, optimized every dollar for shortterm ROAS. CEO Elliott Hill now calls fiscal 2026 a "transition year" while spending $5 billion on demand creation to bring the brand back.

That sounds far away. It isn't.

You're a DTC founder doing 1-5M. Or maybe you lead marketing for a corporate. Your CAC is climbing (25-40% higher than 3 years ago, depending on your category). So you optimize. Every euro goes to Meta, Google, whatever converts.

Working on brand equity is just too easy to be pushed back.

"We'll do that when we're bigger.". I hear that sentence probably 3 times a month. And I get it. When cash is tight, spending money on things you can't attribute feels irresponsible. You look at your analytics dashboard and think: this has return, this doesn't. Everything without a measurable return feels like play money. That's human. And that's exactly the trap.

The brands that skip brand building don't get bigger. They get stuck. CAC rises, first to second order rate stays flat, and they spend more to stand still. (Fun, right?)

1. Set a brand floor, not a brand budget.
Commit to spending at least 10-15% of your total marketing costs on things that don't convert this week. That's not a scientific threshold but it's the minimum below which I haven't seen sustainable growth at any brand I've worked with.

Organic social that tells your story. Partnerships with like minded brands. Creator content that builds recognition. The brand stuff is what gets customers to come back without a discount code.

2. Treat brand as a CAC hedge.
When CPMs spike (every Q4, plus whenever Meta changes something), brands with recognition get cheaper clicks. Nike's digital sales cratered partly because, without wholesale presence and cultural relevance, their performance ads had to carry everything alone.

Same principle applies at 2M revenue. If nobody knows your name, you're paying full price for every single time someone taps on your ad.

3. Measure it, even roughly.
You don't need a $200k brand tracking study. Open Google Search Console and watch your branded search volume over time. Track direct traffic. Monitor your repeat purchase rate religiously.

If direct traffic is flat while paid spend grows, your brand isn't building. That signal matters more than your fancy attribution model.

4. Don't separate the budgets in your head or in your team.
Maybe you don’t have a big team. But you have mental buckets: "This is performance money, this isn't." That's where the mistake happens. If you have a team, don’t split it up between brand and performance. Biggest nonsense i have seen in my 14 years at adidas.

The best creative I've seen at brands doing 2-5M works as brand building AND converts. When the person or team creating has both in mind at once, the work does both jobs. The moment those get separated mentally, you win one metric and lose the other.

5. Use your founder story now.
You have something no corporate brand can buy: real accessibility. Founders who show up, explain why the product exists, and talk about what went wrong last month are building a recognition moat that no paid media strategy can replicate.

That window is open now. Use it.

Let's be honest: brand building is slow. Hard to measure. And if your unit economics are broken, no amount of brand spend fixes that. Fix your product, fix your margins, then invest in the brand.

But if your product works and growth feels harder every quarter despite more ad spend, the answer probably isn't "more ad spend."

Nike is paying $28 billion in tuition. You don't have to.

What's your current split between brand and performance? Reply with your rough percentage, i'm genuinely curious where most founders land.

Philipp

P.S. If you're working through this balance right now and want a sparring partner, just reply.