It’s Time We Flip the Funnel

by Jo Joslin , Senior Media Planner at The Variable

Advertising’s addiction to bottom-funnel performance is a problem. The ability to measure, track and attribute real-time conversions has made marketing more accountable than ever, but it has led to an absolute fixation on immediate ROI. This fixation on sales immediacy has come at the expense of valuable brand-building and necessary top-of-mind recall. Tightening budgets continue to shift focus towards chasing the most efficient sale, leading to chronic underspending and abandonment of brand health.?

But some companies are doing it right. Take Warby Parker, for example - what started as an online D2C giant now has over 175 retail stores nationwide. As Steve Miller, Warby Parker’s CFO, explains , “Our stores serve as billboards and don’t need as much marketing support.” While the impact of COVID-19 forced many brands to reevaluate their marketing budgets, Warby Parker is refining their marketing strategy to increase reach beyond online activation and immediate ROI to focus investments in upper-funnel awareness exposure with brick-and-mortar retail stores.?

There is a reality that most brands choose to ignore: Focusing on the highest efficiency conversions doesn’t usually translate to long-term sales growth. Growing a customer base requires both time and investment. As Econsultancy has reported , 82% of consumers only click on ads from brands they are already familiar with. That only leaves a pool of 18% of people – people who brands are attempting to turn into customers – who are open to trying brands they don’t know. But brands cannot convert new audiences without building brand awareness first. Immediate profitability without foundational brand investment is only a mirage, and neglecting the fundamental metrics of awareness and trust puts businesses on shaky ground. Cheap does not mean valuable.?

It is also fundamentally inaccurate that upper-funnel marketing doesn’t deliver ROI.? Marketing was driving sales long before performance tracking became a possibility. And while measurement is certainly harder, we do know the impacts of brand building on sales. In a recent 2021 media modeling study , Nielsen found that adding upper-funnel media tactics into a marketing strategy can actually increase ROI by as much as 70%.?

However, all of that is easy to forget with the allure of immediate and attributable performance marketing efforts. Knowing brands must drive performance, it's time we, as an industry, redefine performance success and make the entire funnel performance-oriented. We aren’t truly measuring performance if we are only measuring conversions. The secret to long-term growth is adding new customer interest, and that value needs to be measured. Marketers and advertisers need to create better measurement options for return on awareness. This can include a focus on measuring consideration in an actionable way: incremental website and/or retail foot traffic, increased search volume interest and growth in 1st and Zero Party Data. It’s time to fix our conversion addiction and deliver higher overall value. It’s time to flip the funnel and to refocus on building strong future earning potential for much healthier marketing outcomes.

About The Variable

Headquartered in?Winston-Salem, N.C., The Variable combines an advertising agency that drives growth for today with an innovation consultancy that designs growth for tomorrow. Through an integrated offering that includes strategy, design, product innovation, advertising, social, community building, and more, The Variable helps globally-recognized brands including Electrolux, Scotts, Char-Broil, NAPA, BASF, Nestlé, P&G and others accelerate business transformation in the relentless fight against consumer indifference. In addition to the impact made on the overall business of The Variable's clients, the agency's unique combination of creativity and innovation has garnered kind praise and impressive awards from leading publications. The Variable has been an Ad Age Small Agency of the Year three times since 2015; Was named one of Adweek's Fastest Growing Agencies in 2021; Earned a spot on Fast Company's Best Workplaces for Innovators in each of the past three years, and was selected by Forbes as one of America's Best Startup Employers in 2021. For more information on The Variable, visit?https://thevariable.com/ .