Les Binet on the cost of small thinking

Advertising is becoming more efficient, but less effective

Marketing has become fascinated by small things: granular data, tightly defined audiences, short-term results and clever one-off executions. According to Les Binet, that mindset is not simply limiting the ambition of advertising. It is limiting its commercial contribution, it’s harming our industry, it's harming agencies and it's harming brands.

The paradox is visible in the IPA Databank. Since Covid, average media ROI from advertising has risen by 4%. That’s the good news. We are becoming more efficient. Over the same period, however, the incremental profit generated by campaigns has fallen by 11%. Advertising has become more efficient, but less effective.

Profit = ROI × Budget

But how can ROI go up and profit go down? The explanation is simple. Profit is the product of ROI and budget. So if ROI rises while budget falls, profit can still decline. This exposes a fundamental problem. Marketers tend to look at the return on each euro (the efficiency metric), while the business ultimately cares about the total return (the effectiveness metric). An impressive efficiency figure can therefore conceal underinvestment.

The budget matters more than marketers think

When Binet asked 500 CMOs what drives advertising profit, they attributed roughly two-thirds of the result to ROI and one-third to budget. So if that's true, it makes really good sense to focus on the efficiency. But the data tells us a different story: nearly 90% of the variation in profit was explained by changes in the budget level, not changes in the ROI. So, marketers are putting their attention on the ROI. But in fact the real action is in the budget. If you don't get the budget right, nothing else works.

In his words, budget is eight times more important than ROI. That makes budget-setting the single most important marketing decision. Yet when Binet polled the audience at UBA Media Date, only a minority felt responsible for deciding how much to spend. Most said they were simply given a number.

The problem is compounded by the way budgets are often determined. Companies often rely on marketing metrics rather than business outcomes. Few model how different budget levels will affect sales, margin or profit, or use experiments to test the expected results. Without hard commercial evidence, marketing remains vulnerable when costs are reviewed.

Binet’s message to marketers is therefore clear: budget-setting cannot be delegated or treated as an annual constraint. Marketing must work with finance and leadership to model the investment required to achieve the company’s growth ambitions.

How brands fall into a death spiral

This results in what Binet calls small thinking: tight budgets and an emphasis on efficiency over effectiveness mean “doing more with less”. A brand first selects a socio-demographic target, then focuses on the 5% share of that group currently in-market, and finally reaches them through a limited set of performance channels. What began as the whole category may end as only a few percent of its potential buyers.

Binet illustrates the cost of narrow targeting: brands often ignore over-45s, who account for half of consumer spending, then focus only on the 5% currently in-market. This can reduce the addressable audience to just 2.5%, improving apparent efficiency while leaving substantial demand untouched.

Narrow targeting raises ROI but limits sales and profit. Weaker sales and profit then trigger further budget cuts, which force plans to become even smaller. Binet describes this as a marketing death spiral: when brands keep thinking small, they eventually become small. His call to marketers is to break that cycle by remembering that effectiveness is fundamentally about scale: the size of the budget, the reach of the media and the level of exposure.

Growth starts with scientific budget-setting

‘Go big’ does not mean that every brand needs an enormous budget, it's about looking bigger than you are. It means investing at a level that is ambitious relative to the brand’s size and objectives. Share-of-voice modelling offers a practical starting point: brands whose share of voice exceeds their share of market tend to grow, while those that underspend relative to their position tend to shrink. A brand with 8% market share and 9% share of voice is already punching above its weight.

At the most advanced level, econometric or marketing-mix modelling can show not only the typical uplift from advertising, but also how different budget levels affect the incremental profit it generates. Crucially, that point is not where ROI is highest. ROI typically peaks at very low budgets. Optimising for it alone can reward the smallest possible plan rather than the most profitable one. This is one of the reasons why ROI on its own is a dangerous metric.

The long and the short

Once the total budget is right, it must be allocated between short- and long-term objectives. Performance marketing works at the bottom of the funnel. It targets the 5% of people who are ready to buy, provides relevant information and converts existing demand quickly. The results are immediate and efficient, but relatively small in the long term.

Brand advertising works at the top of the funnel, reaching the 95% who are not currently in-market but may buy the category in the future. It shapes how people think and feel about the brand, builds lasting memories, increases consideration and makes customers more likely to seek out the brand when they enter the market. It can also improve conversion and reduce price sensitivity.

For B2C brands, the familiar 60:40 budget split, around 60% brand building and 40% activation, remains a useful average, but not a fixed prescription. The optimum varies by sector, maturity and price position. New brands often need more activation; mature and premium brands generally need relatively more brand investment.

Brand and activation need different media strategies

Activation can be tightly targeted at current buyers and built around useful product or price information that will help them to finalize their choice. Brand building needs broad reach among everyone who may enter the category over the next two or three years, or longer in categories with extended purchase cycles.

It also needs a different creative philosophy. Binet argued that brand advertising is not primarily a system for communicating messages or explaining product features. Its job is to shape future choice by making people feel something and linking that feeling to the brand. Asked for the optimum number of messages in a brand ad, his answer was deliberately provocative: probably zero.

Emotion and memory are deeply connected, which helps explain the enduring power of video. In Binet’s formulation, video combines sight, sound, motion and emotion. But exposure alone is not enough. Creative work must earn attention and remain memorable.

From disposable ads to compound creativity

Budget and media create the opportunity for growth. Creativity turns that opportunity into attention, emotion and memory. But here too, Binet sees an industry trapped by small thinking: too many brands produce isolated executions, abandon them and start again.

Effective advertising needs campaigns that stretch across media and endure for years. That is the logic of compound creativity: consistent elements reinforce one another and build coherent brand memories. Peter Field and James Hurman’s creative commitment score (The Effectiveness Code, Field & Hurman, Cannes Lions & WARC 2020) captures the same principle by combining three key factors: the budget, the number of media used and the campaign duration.

Binet’s closing challenge was a call for ambition across the entire system: budgets large enough to matter, media plans broad enough to reach the market and creative campaigns strong enough to build lasting brand memories.

The conclusion is uncomfortable, but difficult to ignore. Marketing will not restore growth by making every plan smaller, tighter and easier to defend on a dashboard.

In Binet’s words: go big, go broad… or go home.