RIP: The Marketing Funnel: 1898 - 2023?
Credit: MidJourney

RIP: The Marketing Funnel: 1898 - 2023?

The traditional marketing funnel was first developed in 1898 by E. St. Elmo Lewis and is based on the AIDA model. Does anyone feel a model from 1898 in such a fast paced environment such as advertising may be classed as outdated?!

The marketing funnel, once lauded as the singular approach to how marketers develop marketing campaigns and consumer engagement, is facing its demise (and has been for some time now!) In the wake of rapidly advancing and evolving consumer behavior, notably in Gen Z, who (combined with the Millennial generation) account for 32% of retail purchasing power in the US , marketers must now consider the immediacy with how this consumer base operates. Marketers have long relied on this linear model, which divided the consumer journey into neat stages of awareness, consideration, and purchase. However, with the evolution of consumer behavior and the fusion of digital and physical experiences, the marketing funnel is no longer an effective framework in today's world. In this article, we will explore how the legacy model of brand and performance is an outdated approach, examine the shifting consumer landscape, and unpack what is the potential future for marketing


Salience not Silo’s

Traditionally, marketers have allocated separate budgets for brand-building efforts and performance-driven initiatives, creating a divide that reinforced the concept of the marketing funnel. Brand media aimed to generate awareness, while performance media focused on conversion. However, this division fails to acknowledge the interconnectedness of brand and performance in today's consumer journey.

Whilst this approach allowed marketers to neatly put budget into buckets and create marketing campaigns based on these buckets, it has always created an artificial wall which consumers are simply not confined by. Now I will caveat straight away and admit that some categories, such as a high ticket value items like automotive and luxury retail, and the way consumers navigate these categories (longer sales cycles) may still have a need to leverage “the funnel”. But the way these marketers define the funnel and how they develop marketing campaigns still needs to evolve in the wake of rapidly changing consumer behavior.

By operating in this manner, you literally suffocate yourself from providing immersive brand experiences which encompass all your brand has to offer, as well as experiences which allow you to buy then and there! For the sake of what, allowing your marketing teams to have nice neat (and separate) KPIs? Why do I need go to Google to search for the product I just saw on Hulu to buy? Why are you making me jump through another hoop! You had me at “Croc Headlights”! See that’s the thing, consumers no longer want to see an ad, think about it, go into store to touch and view it, go home and research it and then decide to buy it (on or offline) over the course of 7 days. FOMO, YOLO and all the other acronyms define a generational shift into how consumers purchase goods now, and for lower cost impulse type purchases, that window is no longer 7 days, more like 7 seconds!

There is a steady rise in example of work which break down these silo’s and provide integrated experiences, putting the consumer at the center of the campaign. Nike is the king of this type of work and leverages its heritage and athlete partnerships to bring stories to life in an immersive and 360 degree experience (W+K are the queens to Nike on all these executions!) But I wanted to focus on a brand which is scaling this ideology globally and localizing at the same time. This brand is Spotify. Whilst Spotify is “simply” an audio streaming service, they understand the key to their ongoing growth and success is to not only through localized scale and diversification of services (Podcasts and Audio Books) but critically within that scaling and diversification to support and empower local creators. Spotfiy’s mission statement is to “to unlock the potential of human creativity” and they put this philosophy at the heart of their approach to media. Fast forward to the collapsing of the funnel example where, in the Philippines, Spotify wanted to better integrate into the local music scene to help grow its footprint in the Philippines. They knew the importance of local culture and the immense talent Filipinos have for their home grown artists so Spotify tapped into this passion by partnering with up and coming artists from The Philippines. They created offline and online integrated experiences, focused around the launch of a local artists album drop, SB19. From custom Jeepney wraps (the national ride), using local artists to tell their story, streaming SB19’s music within the Jeepneys. In addition, they created a gamified digital content to unlock hidden tracks on the Spotify platform. None of the above had a “performance” element to the campaign, but the end goal was always to drive more users to Spotfiy, to sign up, ideally to the premium service. The campaign delivered 14MM streams + 4% consideration uplift, all done by creating an immersive experience without a single “sign up to Spotify” creative in sight! ?

Speed Not Structure

The reason why brand and performance should now be viewed as an outdated approach isn’t to do with consumer needs changing, they still go from seeking new brands, to buying and being loyal to them, much like the aforementioned marketing funnel, but they do this now in a blink of an eye. 11% of consumers go from being unaware of a brand to purchasing within the first engagement. The legacy marketing department structure was simply not setup to meet this radical change and speed in how consumers move from awareness to purchase! In place of the outdated marketing funnel, marketers must adopt a new framework that embraces the dynamic nature of consumer engagement. The focus should shift from rigid stages to a more fluid and customer-centric approach that encompasses consideration and commerce. For example, direct-to-consumer brand Glossier successfully built a community around its products, leveraging user-generated content, social media, and influencer partnerships . By creating a seamless integration of content, commerce, and community, Glossier has blurred the lines between consideration and commerce, proving that the marketing funnel is no longer the best model for success. Beauty, Retail, CPG, Electronics, Gaming are impulse purchase categories which have been impacted by this shift in consumer behavior, and are at the tip of the spear when it comes to an agile approach to marketing to tap into this evolution. If you want to see progressive brands which are leading the charge in this type of change, your best bet is to start in those categories. Why? When we look at Brands who resonate most with Gen Z there is a clear reason why the categories and brands which stand out for Gen Z vs Gen Pop have gained such a cultural hold on this consumer base. These include brands such as Discord (#2 + 28.66% vs Gen Pop), ?Trolli (#2 + 21.17% vs Gen Pop) and Doordash (#11 + 18.73% vs Gen Pop). I want to quickly dive into Doordash ,as for me this is exceptionally insightful!

Doordash is technically a commodity service, delivering F&B to customers much like GrubHub and UberEats, so why does this brand have such a greater resonance with Gen Z vs competition? What Doordash has done is tap into the 2 core motivator drivers for Gen Z audiences. Firstly, they are a business built on values and who invest behind these values. This isn’t linked to the marketing funnel so I will skim through this quickly, but linking your business and marketing to your core values is a powerful connector to the Gen Z audience. In the case of Doordash they have heavily invested in their approaches to local communities. From Restaurants, where DoorDash offers access to Drive, its unique customer insights app to give local, smaller restaurants access to extensive customer and brand insights on their own. To Customers: focusing on areas with less competition — mainly the suburbs and smaller cities but still with need and provided value to a largely ignored segment of the population, And finally its Workers: where the gig economy has always a hot topic on employment standards. Doordash has introduced a guaranteed hourly minimum rate instead of being paid per delivery as well as programs such as “dash along the way” which allows workers to select where they want to start fulfilling orders — perhaps along their regular commute.

Now back to the funnel! In relation to the marketing funnel, they may well still operate sign up media, linked to performance, but there has been a substantial shift in investment and structure to enable greater integrated experiences, connecting brand to commerce. ?From this, a key area of focus emerged for Doordash, which is within the esports space. As the industry continues to gain momentum, brands across the globe are increasingly viewing competitive gaming as a great way to gain exposure among younger consumers. In many cases, brands take the simpler route of sponsoring a popular esports org like FaZe Clan or Team Liquid, but another marketing avenue that’s been gaining traction is to create and host esports events. DoorDash held its first-ever gaming tournament on Twitch, Battle of the Snacks, which featured leading snack brands including Twix, Oreo, and Sour Patch Kids. DoorDash worked with top content creators such as Jericho, Aydan, Atomic Twins, and MuteX to make sure the tournament had high-profile gamer appeal . Keeping to the food theme, eight teams competed in the cooking party game Overcooked 2. According to Interpret’s New Media Measure, the esports push is beginning to work, as DoorDash customers now over-index on esports viewership compared to the general US population. Currently, about 17% of DoorDash users are Gen Z, but this figure could climb in the future as the service grows its esports presence.

As a result of these efforts, Doordash overtook Uber to be the #1 food delivery service in 2020 and drove $42bn in gross order volume in 2021

Conclusion

As consumer behavior continues to evolve, the marketing funnel is becoming increasingly irrelevant. Marketers must adapt their strategies to meet the demands of today's empowered consumers. By embracing a more holistic and customer-centric approach, brands can foster meaningful connections, deliver personalized experiences, and bridge the gap between consideration and commerce.

A.J. Storinge

Brand Builder | Growth Driver | Team Leader | Investor

1 年

It’s as dated as the Ebbinghaus Forgetting Curve (https://en.m.wikipedia.org/wiki/Forgetting_curve) from about the same time….

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