Top of Funnel Marketing: Why You Can’t Cut Spend on Ads That Don’t Immediately Convert

Emily Lutz
September 23, 2022

How do you measure digital marketing success? By conversions, of course—those qualified leads, purchases, applications, enrollments, and other actions that make your business money. However, measuring exactly where those conversions come from is much harder than it looks. Which of your marketing efforts are contributing to each conversion? Which campaigns are inefficient and should be paused?

Many measurement platforms give the credit for the conversion to the last touch before the action. This is why search ads, brand ads, brand organic searches, and direct channels get credit for most of the conversions. However, according to Salesforce, it takes 6-8 marketing touches to generate a viable sales lead. This means that if you pause campaigns that target people before they are ready to convert, you might actually be shrinking your audience and hurting your conversions without knowing it. 

So, what do you do instead? Stop making the mistake of cutting spend to ad campaigns that target the earlier stages in the marketing funnel. Read on to learn why it’s imperative for marketers from any industry to invest in top of funnel marketing.

What Is the Marketing Funnel?

The marketing funnel consists of three sections: awareness, consideration, and conversion.

Many last-touch marketing analytics tools only look at the conversion section of the funnel. This includes Google Analytics and many CRMs (including Hubspot and Salesforce) which track using UTM parameters. These conversions tend to come from brand searches, product searches, email marketing, and direct visits. 

But how did these users hear about your brand or website in the first place? How did they get on your email list and how many emails did they read and click on before converting? When they saw your ad or organic listing in the search results, how did they know that you were a good company and they could trust your products or services?

That’s why it’s so important to consider the big picture.

Measuring the Entire User Journey

There are some measurement platforms that try to understand the entire user journey, from the first touch to the last touch. However, most rely on cookies, which are easy to block and don’t transfer between devices–meaning that if someone searches on their mobile phone and then switches to a computer, it can’t track them.

Many ad platforms will track users’ actions after they click on an ad for 7-90 days to see if they later convert and then take credit for the conversion. For instance, Google Ads will put a cookie on a user after they click on an ad and it will see if they convert sometime in the next 90 days—if they go to the website through an organic search after a week and convert, Google Ads will take credit for the conversion since they clicked on an ad at some point in their journey, even though Google Analytics and the CRM will both say that the conversion came from organic search. 

However, this can cause double or even triple counting if you just rely on the ad platform measurement. If a user clicks on a Google Ad, Facebook Ad, and LinkedIn Ad and then converts through an organic search, Google, Facebook, and LinkedIn Ads will all report one conversion each but Google Analytics and the CRM will say the conversion came from organic search. That one conversion could be counted four or more times depending on the user’s journey.

Google Analytics 4, the newest generation of GA, looks to solve this problem. GA4 has a cross-channel model of attribution, meaning that it will attribute conversions to multiple channels, not just the last click like Universal Analytics did previously. It can also look back up to 30 days for touches that lead to Acquisition events (like the first visit to a website) and up to 90 days for touches that lead to Conversions. This may make it easier to identify how awareness and consideration campaigns contribute to the final conversion without the double-counting issue in the ad platforms.

Why You Need to Establish a Full-Funnel Marketing Strategy

Even if you have a hard time measuring the effectiveness of top of funnel marketing campaigns, it is important to have a full-funnel marketing strategy in place. Different types of marketing efforts target people at different points in their journey, and hopefully they’ll all work together to move them down the funnel. 

If you are only targeting the bottom of the funnel—the very end of the decision journey—you will likely have a difficult time scaling results and cause your campaigns to have a lower conversion rate, since decision-makers will not be exposed to your business before that end decision.

That’s where top of funnel marketing comes into play. Yes, this means spending on ads that don’t immediately convert—and yes, it’s a key component of any comprehensive digital marketing strategy. 

So, how do you plan a comprehensive strategy that maps onto the full marketing funnel? Read on.

1) Awareness Marketing

This covers the very beginning of the funnel. Awareness marketing focuses on letting your audience know that your brand exists and is trustworthy, whether they need your product or service right now or not. This type of marketing can improve your conversion rates farther down the funnel because people are more likely to click on and convert with companies that they are already familiar with.

Awareness marketing can include things like creating and marketing broad content that your audience would be interested in, advertising using display banners that show on websites and apps that your audience is viewing, and social media posting and advertising.

These types of marketing are relatively cheap and can be very effective if done correctly. However, they rarely lead to direct conversions–even in 90-day models like in Google Analytics 4 and the ad platforms. And gating content at this stage does not usually work well—if people don’t know and trust your business yet, they are not likely to want to give you their email address or personal information for content of unknown quality. That’s important to keep in mind. 

Effectiveness in awareness advertising can be measured in impressions, clicks, engagement, and downloads. It can also cause a “brand lift” effect—which means you might see an increased volume of brand searches, as well as increasing click-through rate and conversion rates in other marketing campaigns overall.

2) Consideration Marketing

Consideration marketing focuses on people who are searching for your product or service but are comparing different options. They may or may not have encountered your brand or your competitors before and are deciding which to choose. At this stage, they are interested in what sets you apart from competitors, pricing, reviews, and ease of use. They want to learn as much as possible about your product without a lot of hurdles to get the information they need.

Consideration marketing can include things like creating and marketing specific product content, non-branded and competitor search ads, social media interest ads, review website advertising and listings, and product demonstrations. 

At this stage, users are more likely to leave their information to access gated content, if they feel that it will be useful for their search. However, they often do not want to have to schedule a demo or sales pitch with a human until they have enough information to narrow their search to the top two to three choices. That means there needs to be enough information available for them to compare to competitors that is not tied to a sales meeting.

Consideration marketing will sometimes lead to conversions but the cost per conversion is higher than the bottom of the funnel. Using a longer conversion lookback window, like Google Analytics 4 or the ad platforms, is likely to give more insight into the effectiveness of consideration marketing than last click platforms. 

However, consideration is an essential step of the marketing funnel and cutting this type of marketing can have major impacts on the final conversion volume. 

Effectiveness in consideration marketing can be measured by website visits, downloads, time on site, pages visited, engagement, video views, and conversions.

3) Conversion Marketing

Conversion marketing focuses on people who are ready to convert—in other words, ready to purchase your product or service. They have done their research, decided they need your product, and decided that you are the company for them. They may have other options in mind if they reach a hurdle in purchasing from you but they are ready to purchase in the next day or two.

Conversion marketing can include things like remarketing ads (search, display, and social media) targeted at people who have visited your website before or taken certain actions on your site (like add to cart), brand search ads, organic brand search optimization, and conversion rate optimization on your website. Basically, anything that makes it easier for a person to come to your site and purchase.

Conversion marketing campaigns often account for a large percentage of your final conversions, especially in last-click measurement models like Google Analytics and CRMs. In ads, they often have the cheapest cost per conversion and highest click-through rates and conversion rates. 

As discussed, that isn’t because they are the most effective type of ads by far. That’s because these campaigns ride the backs of other marketing efforts earlier in the funnel. If you cut off most of your awareness and consideration marketing, your conversion campaigns will falter over time and you will never be able to scale and grow your business.

Planning Your Full-Funnel Marketing Budget

When it comes to a marketing budget, many marketing directors want to focus their money on the campaigns that are the most efficient, or have the cheapest cost per conversion. In the short-term, with a very limited marketing budget, that may make sense. But, in the long term, you will kill any chance of growth and hurt your end click-through rates and conversion rates, causing the cost per conversion to continue to rise over time.

Here’s a hot take: most of your marketing budget (at least 50%!) should go to the consideration phase of the marketing funnel. That is where people are making decisions about the product or service that you offer and whether to go with you or your competitors. This will include things like creating product guides, long-form, detailed gated content about your products and services, video demonstrations of your software, review listings, non-branded and competitor search ads, social media interest and lookalike ads, and email marketing that links to product guides and demos.

Smaller proportions of your budget should go toward both awareness and conversion marketing (around 20% each). 

As for the awareness stage, building awareness of your brand with your audience is important for your company’s long-term success and growth, and can significantly help your campaigns later in the funnel. Since awareness ads are relatively inexpensive, it is important to have some budget to support display prospecting ads, social media audience ads, and broad content marketing to introduce your audience to your brand before they are even looking for your product.

As for conversion marketing, people in the conversion stage are already likely to sign up with you, but you want to make sure that a competitor cannot swoop in and steal them at the last minute, and that you are not making it too difficult for them to purchase that they just give up. This is why some budget should go to brand search ads, remarketing ads, and conversion rate optimization on the website.

What’s Next?

Of course, these numbers are all just estimates. Each company is going to have a different audience, and different strengths and weaknesses that require different budget balances between the three parts of the funnel. 

For instance, if you are the major brand in your field, you may not need to spend a lot of money on awareness marketing and can focus on consideration and conversion. However, as competitors pop up in your field or a new generation steps into leadership in your target audience, you may need to shift back to more awareness marketing as you find your consideration and conversion campaigns faltering over time or getting decreasing volumes of sales. 

Another company may be confident that once their audience gets to the conversion stage, they almost always convert so they don’t want to spend their marketing budget on brand searches. Again, if a competitor starts spending heavily on their brand searches and starts stealing some of those customers, it may be smart to restart those brand campaigns. 

No matter what, in the long term, you should never completely stop spending marketing budget and working on strategy for all three parts of the funnel or you can severely decrease your company’s long-term growth.

Do you need a partner that focuses on awareness, consideration, and conversion marketing strategy? Connect with us for a comprehensive audit and the opportunity to learn more about our services.

On a kick to optimize your digital marketing? Discover how to evaluate your agency or in-house team for better results.

Emily Lutz
Director of Strategy

Emily Lutz is from Kalispell, Montana and has been camping more times than she can count. She geeks out over musicals and the TV show Firefly (yes, she’s on some chat sites). Before joining Perfect Search, Emily was a zookeeper for ten years.

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