Let's Split the Funnel

June 10, 2015 - Newsroom


Let’s Split the Funnel

My semiannual lectures about data-driven marketing at Cornell’s Johnson Graduate School of Management are just as much an education for me as for the students because they help me stay in touch with the evolving mindset of next-generation marketers. As you’d expect, students typically get exposed to the traditional marketing funnel. What they often don’t learn, however, is that our fast-evolving digital world has rendered it obsolete. It’s time for a change.


An iconic model

The traditional conversion funnel—the iconic model guiding marketing decisions—was first introduced in 1925, just a handful of years after the earliest radio stations were built. Television was in the distant future, and computers and digital breakthroughs weren’t even a figment of anyone’s imagination.

The marketing funnel provided a graphical model of a linear process with a limited number of channels to engage and persuade a consumer. At the wide end of the funnel, brands competed for the attention of prospective customers, and the conversion occurred at the narrow bottom. Of the larger universe of consumers who were introduced to a brand, it suggested—quite accurately—that only a few were likely to purchase. To its credit, the traditional marketing funnel offered us a serviceable model for developing strategies and allocating investments across the marketing mix to drive conversions for many decades.

Fast-forward to our digital world with an ever-growing number of marketing channels, digital platforms and media. The danger of using the traditional marketing funnel to guide planning and actions is that it’s no longer accurate. Consumers no longer follow a linear path from awareness to action. The customer journey inevitably involves online digital engagement, along with offline interaction in stores or call centers. We only have to watch our own behavior when a product or service catches our attention: We begin to research brands across platforms, peruse comments and complaints on Facebook or Twitter, and finally make a purchase online, through a call center or by visiting a store. What is needed is a model that mirrors this increasing complexity.


Split-funnel attribution for the digital world

The proliferation of digital platforms has forever changed consumer engagement with businesses, and the emerging models, tools and methodologies make it possible to most effectively take advantage of the new engagement media.

Let’s start with attribution. Making good marketing decisions requires an understanding of what marketing actions trigger, which results in the continuum stretching from capturing someone’s attention all the way to a decision to purchase. That’s the science of attribution: You need to recognize the combined value of the marketing mix—across data silos, at every digital touch point and throughout the customer lifecycle. This is essential to driving smarter marketing programs that yield higher ROI.

The split-funnel attribution model gives marketers better insight into how each channel contributes to conversions by linking it to impression, click and conversion data. This approach literally splits the funnel between “prospecting” and “retargeting” activities to deliver better insights into the effectiveness of each stage.

Let’s take the example of someone shopping for new hiking gear. In browsing websites, he may click on banner ads for new boots that trigger a process of retargeting as the brand gathers browsing information. Under old models of attribution, the importance of awareness activities higher in the funnel (like clicks on a banner ad) rarely received the credit needed to give marketers insight into strategy. Rather, the tendency was to give disproportionate “credit” for customer conversions to “last click” activities, ignoring the prospecting activities going on in advance.

In addition, the customer journey is made even more complex because of the number of vendors touching your brand’s data. Your search agency, for example, has one view of your data while your display agency has another. It can be difficult to get a true picture of the customer journey when different agencies and partners are buying media for you.

The split-funnel attribution provides a model for organizing the data and insights required to trigger retargeting so that your brand can engage a consumer more effectively at the later stages to further the buying process, and it gives marketers solutions to a number of problems, such as:

  • Avoiding paying duplicate vendor credits
  • Accurately giving credit for consumer activities and purchases
  • Identifying the best channels or marketing strategies to invest in
  • Gaining insight into the combinations of influences leading to a sale

This is exactly why it is time to revisit the traditional marketing funnel. It’s still all about determining the best marketing mix that delivers the right offers, at the right time, on the right platform, and to the right audience to achieve desired conversion rates. We simply need to re-examine the models and tools to ensure that they reflect the reality of today’s complex customer journey. Not surprisingly, my students agree.