Why is everyone talking about Full Funnel as the replacement of Performance Marketing?
Full Funnel is often seen as a buzzword in digital marketing, and many e-commerce businesses and other industries remain heavily reliant on Performance Marketing. This reliance is partly driven by the belief in endless scaling and low marketing costs from the "glory days," but also by the complexity of evaluating—and thereby justifying—activations higher up in the traditional marketing funnel. The goal of this article is to provide you with a clear understanding of why you should get started, along with recommendations for measuring the impact of your marketing efforts.
Changes in the digital landscape
A few years ago, marketing managers operated in a very different reality than they do today. Attribution was accurate, and major tech companies had vast amounts of data to efficiently identify users relevant to the marketing manager’s business. Additionally, marketing costs were significantly lower. The main challenge was dealing with attribution issues when multiple channels claimed credit for the same conversion. Let’s call it The Glory Days. But, as with all good things, they had to come to an end. Legal actions addressing how users were tracked online led to restrictions that limited how companies and tech platforms could track and use information.
To put it simply, the platforms we use for digital marketing rely on two types of data: first-party data, generated when people use their platforms, and third-party data, which companies send back. This data is essential for training algorithms and identifying user intent. However, as these data volumes decrease, the systems naturally have less information to optimize your marketing spend effectively.
The limitations in today’s Performance Marketing
The simple conclusion is that tech platforms face greater challenges in identifying in-market users and attributing sales driven by their platforms. Implementing a Full Funnel strategy won’t solve the attribution problem, but it will significantly enhance your ability to scale.
For push channels, such as social media, your audience can typically be divided into three categories:
Existing Intent: People who are currently in-market to buy your products or services.
Predicted Intent: People who are likely to be interested in buying your products or services.
Priming Intent: People who may not yet be aware of your products but are relevant to your business.
The first category, existing intent, represents a limited number of users but is highly relevant for achieving objectives like driving purchases on your website. This is the audience you focus on when running performance marketing. The reality is straightforward—you can only convert the users you reach. Failing to engage with predicted intent- or priming intent audiences will restrict your potential to scale.
When implementing a Full Funnel setup, you will notice a higher incremental reach within the first month. This isn’t surprising—it’s more cost-effective to buy impressions than to buy direct sales. The real value lies in tracking the progress over time through a Reach Saturation Analysis. In the example below, we compare 12 months of Performance Marketing with 12 months of a Full Funnel approach, revealing two key takeaways:
The Full Funnel setup reaches more unique users over time, while the Performance Marketing setup stagnates.
The Full Funnel setup maintains a steady flow of new unique users, whereas the Performance Marketing setup relies on increasing frequency and struggles to find new users.
This is one of the biggest eye-openers for stakeholders on the client side, as it clearly demonstrates why they are experiencing diminishing returns on their digital marketing investments.
What results do we see from transitioning to a Full Funnel setup?
Bluebird has conducted statistical studies measuring both brand and performance metrics, comparing Performance Marketing alone to a Full Funnel setup. Different companies have different needs, so budget allocation and strategy may vary to align with their specific opportunities and goals. However, the common finding is that a Full Funnel setup is statistically proven to be the most effective way to drive business growth.
Advertisers reach 300% more unique users over 12 months.
In-market audiences grew by 50% over 12 months.
The incremental uplift in sales is 100% higher than Performance marketing alone.
Implement an advanced measurement framework to measure success
Measuring success requires a longer time frame than the day-to-day optimization that many companies are accustomed to.
Multi-touch attribution focuses on day-to-day optimizations and is valuable for evaluating in-channel elements such as content and campaigns.
Lift studies help you understand the incrementality of your marketing efforts. These should be conducted quarterly to assess the health of your setup, test hypotheses, and calibrate your MMM.
MMM (Marketing Mix Modeling) allows you to evaluate and identify opportunities for improvement in your marketing mix on a semi-annual basis.
Bluebird’s role in the transition
We consider our mission in the digital marketing world to be the partner of choice for brands who want to reduce their marketing waste and maximize the outcome of their investments. With extensive experience from these kinds of transitions, we are the partner who can be a strategic and operational resource throughout the process:
Developing and maintaining an advanced measurement framework.
Driving a Test & Learn agenda based on your business goals and challenges.
Setting holistic- and channel strategies to build a 360 marketing experience.
Driving the creative development across marketing channels and objectives.
Building automation to minimize operational work and make room for what’s important – strategic work.