If Brand Is the Moat, Why Does Demand Get the Budget?
Why 70% of your budget is chasing pipeline and 73% of leaders know it’s wrong.
We’re living through a marketing reset.
AI is compressing product differentiation. Barriers to entry are collapsing. Entire categories are flooding with lookalike competitors. In this environment, one idea keeps surfacing:
Brand is the moat.
And yet the average B2B company still allocates roughly 70% of its marketing budget to demand generation and only about 25% to brand.
Even more paradoxical?
73% of leaders say brand makes demand more efficient.
So if we believe brand fuels performance, why are we overwhelmingly funding demand?
That was the tension at the center of my conversation this week with Bill Macaitis — former CMO of Slack, Zendesk, and Salesforce — and now advisor to a new generation of AI-native companies.
Here were my five biggest takeaways.
1. We Know the Budget Mix Is Wrong — But We Keep Funding Demand
“What people want to do versus what they actually do — there’s this massive disconnect.”
The benchmark data makes that disconnect visible.
Across 168 B2B technology companies, the median allocation today is 70% to demand and 25% to brand. But when leaders were asked what the ideal mix should be, the answer shifted to roughly 50% demand and 40% brand.
That’s a 20-point swing.
Marketing leaders don’t believe the current balance is optimal. They believe brand deserves materially more investment. And yet when budget season arrives, short-term revenue pressure wins.
The paradox isn’t philosophical. It’s operational.
We believe in brand.
We budget for demand.
who can grow with the moment and not just replicate the past.
Check out my full conversation with Bill on YouTube or wherever you get your podcasts.
2. Brand Loses Because It Isn’t Measured Like Demand
“When you are not tracking brand… you just can’t defend brand investments. They just get slaughtered in the budgeting season.”
Only 45% of companies report actively measuring brand metrics, and just 28% say they can directly tie brand investment to pipeline.
By contrast, demand performance is rigorously tracked. The top reported ROI metrics are:
Pipeline dollars (79%)
Number of opportunities (70%)
Brand’s most common metric? Website traffic.
That asymmetry explains why 55% of leaders say they would protect demand budgets during cuts — and only 11% would protect brand.
Demand has daily dashboards tied to revenue.
Brand often has lagging or superficial indicators.
In a capital allocation conversation, what can’t be defended gets deprioritized.
3. Leaders Believe Brand Drives Efficiency — The Data Supports It
“The cities that we ran these brand campaigns in — all funnel metrics also improved. The pipeline, the leads, everything else.” 
According to the benchmark data:
63% of leaders say brand directly fuels demand generation.
73% say brand makes demand more efficient.
The belief is already there.
But Bill’s experience at Slack adds operating proof. When they ran brand-heavy campaigns in controlled markets, they didn’t just see higher aided recall — they saw measurable lift in pipeline, leads, and deal performance.
Brand wasn’t separate from demand.
It amplified it.
The gap isn’t conviction. It’s instrumentation.
4. We’re Spending “Demand” Dollars Without Knowing Who’s In-Market
“There is incredible level of targeting now… you can target down to the individual.”
Another revealing finding:
Only 39% of companies know how much of their budget is focused on in-market buyers versus future buyers.
That means the majority are allocating 70% to “demand” without clarity on whether those dollars are truly capturing active buyers — or simply generating noise.
This challenges an outdated assumption that brand equals broad, untargeted spend.
Modern targeting allows you to saturate specific buying committees, run precise brand campaigns, and layer demand messaging on top. The technical capability exists.
The constraint isn’t targeting.
It’s segmentation clarity and measurement discipline.
5. We’re Underinvesting in the Most Efficient Growth Lever: Expansion
“The biggest metric for marketing teams is leads… so everything past the lead, they don’t spend time on.”
The report highlights a structural imbalance:
Roughly 40% of SaaS growth comes from existing customer expansion.
Only 10% of marketing budget is allocated to expansion ARR.
That gap is enormous.
When marketing’s primary KPI is MQLs, behavior concentrates at the top of the funnel. Expansion, cross-sell, and retention become secondary priorities — even though they often carry faster sales cycles, higher win rates, and lower acquisition costs.
Brand doesn’t stop at acquisition. It compounds through loyalty and expansion.
Ignoring that is leaving capital-efficient growth untapped.
Closing Thoughts
My biggest takeaway from this conversation with Bill is this:
Brand and demand aren’t competing strategies.
They’re compounding forces.
The data shows we believe brand makes demand more efficient. We know the current mix is off. We see expansion is underfunded. And yet we still instrument and optimize demand far more rigorously than we do brand.
In an AI era where products are replicated quickly and categories saturate overnight, performance alone won’t be the moat.
Preference will.
That’s why I believe brand — and specifically brand humanity — is the last durable advantage. Not awareness for awareness’ sake. Not pipeline at all costs. But building emotional connection and differentiated experiences that make demand more efficient over time.
If you want to go deeper into the data behind this conversation, Bill and his co-authors published a 62-page Brand vs. Demand Benchmark Report based on conversations with 168 B2B leaders. It’s an incredibly useful resource heading into planning season.
And on a programming note — this episode closes Season One of our podcast, the Brand Humanity Show.
Season One was about exploring the tension in this new era. Season Two is about building what comes next.
I can’t wait to tell you more.